Clear Spring Life Preserve – Predictable Growth with Long-Term Stability

The Market Value Adjustment (MVA) is a contractual mechanism that adjusts the surrender value of the Preserve MYGA when amounts exceeding the free withdrawal provision are withdrawn during the guarantee period. The MVA formula compares the interest rate environment at the time of the withdrawal against the interest rate environment at the time the contract was issued — and adjusts the surrender value in inverse proportion to how rates have moved. When interest rates have risen since the Preserve MYGA was issued: the MVA produces a negative adjustment, reducing the surrender value below the accumulated account value. The economic logic is that the carrier’s fixed-income investment backing the guaranteed rate is now worth less in the current higher-rate environment, and the MVA passes some of that mark-to-market effect to the policyholder who exits early. When interest rates have fallen since issuance: the MVA produces a positive adjustment, increasing the surrender value above the accumulated account value. The carrier’s underlying fixed-income investments are worth more in the lower-rate environment, and the MVA allows the exiting policyholder to benefit from that gain. Critical planning points: the MVA applies on top of the surrender charge — meaning an early exit in a rising rate environment faces both the standard declining surrender charge and a negative MVA adjustment simultaneously, which can make the combined exit cost substantially larger than the surrender charge alone. The Preserve MYGA’s guaranteed death benefit is not subject to the MVA — beneficiaries receive the full accumulation value at death without the MVA adjustment, which is a meaningful distinction from surrender. Understanding how surrender charges and MVA work together — and how to model the combined exit cost across different interest rate scenarios during the guarantee period — is the most important product-level due diligence for any buyer who anticipates any possibility of needing the full contract value before the guarantee period concludes.

The Preserve MYGA’s 3, 5, 7, and 10-year term options make it well-suited as multiple rungs within a laddered MYGA allocation — a strategy where a buyer splits their fixed-rate allocation across several annuity contracts with staggered maturity dates, creating regular access points while maintaining competitive declared rates across the full allocation horizon. A practical four-rung ladder using only Preserve MYGA terms: allocate equal portions to the 3-year, 5-year, 7-year, and 10-year Preserve MYGA options simultaneously. The 3-year rung matures first, providing full penalty-free access (and the option to reinvest at then-current rates) at year 3; the 5-year rung follows at year 5; the 7-year at year 7; and the 10-year at year 10. This structure gives the buyer an access point every two to three years throughout the full decade without any portion of the allocation being locked for the entire 10-year period without a reinvestment opportunity. The rate dynamic across the ladder: typically, longer-term Preserve MYGA rates are higher than shorter-term rates (a normal yield curve relationship), meaning the 10-year rung earns more than the 3-year rung at the same carrier. Staggering the maturities captures the higher long-term rates on the longer rungs while preserving the flexibility and optionality of the shorter-term rungs. Comparing 3-year MYGA rates and 7-year MYGA rates across the full marketplace — not just within the Preserve product — ensures each rung of the ladder is optimally placed with the most competitive carrier at that specific term length, which may or may not be Clear Spring Life at the time of purchase.

Clear Spring Life and Annuity Company’s AM Best A- (Excellent) rating with positive outlook — the positive outlook revised from stable as part of AM Best’s Group 1001 review — provides a two-layer carrier evaluation signal. The A- itself: within the A-rated tier that most financial planners apply as the minimum threshold for conservative annuity placements, placing Clear Spring alongside carriers like Delaware Life, F&G, and other A-rated MYGA competitors. The positive outlook: when AM Best assigns a positive outlook, it signals that the factors supporting a potential upgrade to the next rating tier (A in this case) are building — typically reflecting strong risk-adjusted capitalization trends, improving operating performance consistency, or strategic execution quality that AM Best expects to continue. A positive outlook is not a guarantee of an upgrade, but it does indicate AM Best’s assessment that the financial trajectory is improving, not deteriorating. For Preserve MYGA buyers committing to a 5, 7, or 10-year guarantee period, this trajectory matters: a carrier that enters the commitment period at A- with a positive outlook may achieve an A upgrade during the guarantee period, which would represent a strengthening of the financial backing for the guarantee rather than a weakening. The Group 1001 parent context: Clear Spring Life is part of Group 1001 Insurance Holdings, which has approximately $73 billion in assets under management and also owns Delaware Life — another annuity carrier within the same AM Best rating unit. AM Best’s Group 1001 review applies to both companies together, and the positive outlook reflects the group-level financial strength assessment that benefits both Delaware Life and Clear Spring Life collectively. Reviewing the full Clear Spring Life carrier profile provides the complete detail on rating history, NAIC complaint data, and Group 1001 parent relationship for buyers conducting thorough due diligence before any multi-year commitment.

Yes — the Preserve MYGA can be funded with a direct rollover from a 401(k), 403(b), or traditional IRA through a trustee-to-trustee transfer, creating no current tax event and avoiding the mandatory 20% withholding that applies to indirect rollover distributions. Our resource on transferring a 401(k) to an annuity covers the mechanics, procedural steps, and tax treatment of qualified rollovers in detail. The critical RMD coordination issue for IRA-qualified Preserve MYGA contracts: Required Minimum Distributions must be taken beginning at the required beginning date (age 73 under SECURE 2.0 for most buyers), and the Preserve MYGA’s 10% annual free withdrawal provision — which begins in year two — must cover the RMD amount calculated from this specific IRA contract. If the RMD percentage from the IRS Uniform Lifetime Table exceeds 10% in any year, the excess above the free withdrawal triggers both the surrender charge and the MVA adjustment. The IRA aggregation rule provides the primary solution: if the buyer holds other traditional IRA accounts outside the Preserve MYGA, the total RMD across all traditional IRAs can be satisfied from any one or combination of accounts — meaning the Preserve MYGA’s RMD can be funded from a separate IRA account that is not subject to a surrender charge, leaving the MYGA’s free withdrawal provision intact for the MYGA contract itself. Confirming that the RMD strategy is structured appropriately before any large qualified rollover commitment — specifically modeling the expected RMD amounts against the 10% free withdrawal provision across each year of the guarantee period — prevents unplanned surrender charges and MVA adjustments from reducing the effective return on the qualified allocation.

The CD-to-MYGA comparison is one of the most common decision points for conservative savers, particularly when a CD matures and the buyer is evaluating whether to renew the CD, place the proceeds in a new CD at a different bank, or reposition into a MYGA like the Preserve product. The key dimensions where the Preserve MYGA differs from a CD in the buyer’s favor: tax deferral is the most impactful. A CD credits interest annually and generates a 1099 for each tax year regardless of whether the interest is withdrawn. The Preserve MYGA credits the same declared rate without annual taxation — the full declared rate compounds on the complete accumulated base each year without any reduction for annual tax payments. Understanding how MYGA taxation compares to CD taxation across a 5-year period at the same declared rate illustrates this advantage numerically: for a buyer in the 24% federal bracket, the MYGA’s after-tax accumulation advantage versus the CD at the same nominal rate is meaningful over 5 years and compounding. Term availability is the second advantage: the Preserve MYGA offers a 10-year declared rate guarantee that bank CDs typically cannot match; the longest bank CD term is usually 5 years, while the Preserve MYGA’s 7- and 10-year options allow rate lock-in across longer horizons. The key dimension where the CD has an advantage: FDIC insurance. Bank CDs are insured up to $250,000 per depositor per institution by the FDIC — a federal backstop that does not depend on the issuing bank’s financial strength. The Preserve MYGA’s guarantee depends on Clear Spring Life’s A- rated financial strength and state guaranty association protections (which vary by state and are typically $250,000 for annuities). For buyers whose reposition is below the FDIC threshold, the CD’s guarantee structure is simpler. For buyers whose reposition exceeds the FDIC threshold or who want rates available beyond the 5-year CD maximum, the Preserve MYGA provides meaningful comparative advantages at the A- carrier strength level.