Annuity Contract Renewal: What Happens When Your MYGA Term Ends

When a multi-year guaranteed annuity (MYGA) reaches the end of its term, you generally have three moves: renew into a new guaranteed period with the same insurer, transfer the money to a different annuity through a 1035 exchange, or take the cash out. Most contracts give you a short decision window, and doing nothing usually triggers an automatic renewal.

A MYGA maturity works a lot like a lease coming up for renewal. Somewhere around 30 to 60 days out, a letter arrives. It tells you the term is ending, offers you terms for staying, and quietly explains what happens if you never respond. Most people skim it, put it on the counter, and forget about it.

That letter is the most valuable piece of mail your annuity will ever send you. It is the one moment in the contract’s life when your money is fully free: no surrender charge, no market value adjustment, no surrender penalty for walking. That freedom does not last long, and in many contracts it closes on its own.

This guide walks through what actually happens at maturity, what each of the three moves costs and buys you, and the small handful of mistakes that turn a good contract into a mediocre one. If you are still learning the product itself, start with our MYGA product page and come back.

What happens when a MYGA matures?

At maturity, the guaranteed rate period ends and your contract moves into whatever the fine print says comes next. The accumulated value (your original premium plus the interest credited over the term) becomes available, and the surrender schedule that governed the term has typically run out, which is what makes this window different from every other day you owned the contract.

Here is the usual sequence.

Step 5 is the one people miss. A renewal is not “leaving the money where it is.” In many contracts it is a brand new lock-up with a brand new exit schedule, which is exactly why the decision deserves an hour of your attention rather than a shrug. Our surrender periods explainer covers how those schedules are built.

What are your three MYGA maturity options?

You have three real moves at maturity, and each one answers a different question about what this money needs to do next.

The trade-offs line up cleanly side by side.

None of these three is the default good answer. The good answer is whichever one matches the number the insurer actually offers you and the job the money has for the next five years.

How does the renewal rate work?

The renewal rate is set by the insurer at renewal time, and it is not required to match the rate the same company advertises to new buyers. That is the single most important mechanical fact about maturity, and it cuts both ways: a renewal offer can be competitive, and it can be well below what the same carrier is paying for new premium.

The structure varies by contract, so read yours rather than assuming.

Once you have the renewal number, you have a benchmark. Compare it against what the broader market is paying today on our MYGA rate tables, which are refreshed as carriers file changes. As of September 2, 2026, AnnuaLife’s tracked ledger showed top base rates of 6.00% at 3 years (Revol One Financial DirectGrowth 3, AM Best B++), 6.25% at 5 years (Wichita National Security 5, AM Best B+), and 6.35% at 7 years (Aspida Advisory 7, AM Best A-). Those are new-money rates for new contracts, they move, and availability varies by state.

How long is the maturity window, and what happens if you miss it?

The window is short, commonly around 30 days after the term ends, and missing it usually means the contract renews itself. Your contract states the exact number of days, so treat any figure you read online, including this one, as a prompt to check rather than an answer.

• Find the term end date. It is on your annual statement and on the maturity letter.
• Calendar it twice. One reminder 60 days out, one at 30 days out.
• Confirm the window in the contract. Look for language about the renewal or reinvestment period.
• Get the renewal rate in writing. Verbal quotes are not comparable.
• Start any exchange early. Transfers between carriers take time, and the receiving carrier drives the pace.
• Confirm completion. Do not assume a transfer finished. Check both statements.

If you miss the window entirely, you are usually not stranded, but your options narrow. In a contract that auto-renews into a new multi-year term, you may now be inside a fresh surrender period, which means leaving early can trigger a surrender charge and possibly a market value adjustment. Some carriers allow a short grace period after an automatic renewal. Ask, and ask quickly.

When does a 1035 exchange make sense?

A 1035 exchange makes sense when a different contract does the job better and you still want the money inside an annuity. Named for Section 1035 of the Internal Revenue Code, it lets you move non-qualified annuity money directly from one contract to another without triggering tax on the gain, as long as the transfer goes carrier to carrier and never passes through your hands.

• The renewal rate you were offered is meaningfully below current new-money rates for the same term.
• You want a different term length, for example stepping from a 5-year into a 3-year to shorten your horizon.
• You want features the current contract lacks, such as a larger free-withdrawal allowance or a different income rider.
• You want to move to a carrier with a stronger financial strength rating.
• You are building a ladder and this maturity is one rung of it.

Two mechanics matter. First, a 1035 exchange applies to non-qualified money, meaning money that was already taxed before you put it in. Money inside an IRA or another qualified account moves by trustee-to-trustee transfer or rollover instead, which accomplishes a similar thing through different rules. Second, the new contract brings its own surrender schedule, so an exchange restarts the clock. Our 1035 exchange glossary entry has the short version, and the full 1035 exchange guide walks through the paperwork.

When does cashing out make sense?

Cashing out makes sense when the money’s job has changed, or when nothing in the annuity market fits what you now need. Maturity is the cheapest possible exit, since the surrender schedule has typically expired, so if you were ever going to leave, this is the moment that costs the least.

The reason to think it through carefully is tax.

This is general education and not tax advice. A large maturity cashed out in a single tax year can push income into a higher bracket, and spreading a withdrawal across two calendar years is a conversation worth having with a tax professional before you sign anything. Our annuity tax overview and the MYGA tax guide go deeper.

What goes wrong at maturity?

The failures at maturity are almost never dramatic. They are small, quiet, and expensive.

• Sleepwalking into a renewal. The letter goes unopened, the contract renews at a rate nobody compared, and a new surrender period starts.
• Comparing a renewal rate to nothing. Without today’s new-money rates in front of you, the offer has no context.
• Treating a renewal as “no new lock-up.” Many renewals restart the surrender schedule in full.
• Cashing out on autopilot. Taking the money because it is simple, then owing ordinary income tax on years of accumulated gain in one year.
• Breaking a 1035 by touching the money. If the check comes to you, the tax-free transfer treatment is generally lost. It has to move carrier to carrier.
• Starting too late. Exchange paperwork inside a 30-day window is a stressful way to make a five-year decision.

Each one of those is avoidable with a calendar reminder and one phone call. That is the entire skill.

Moving forward

Go back to the lease letter on the counter. The difference between a good outcome and a mediocre one here is not sophistication, it is opening the envelope on time and asking two questions: what exactly are you offering me, and what else is available today.

Answer those two, and all three moves become obvious. If the renewal is competitive and you like the carrier, renew and get on with your life. If the market is paying meaningfully more for the term you want, exchange. If the money is needed elsewhere, this is the cheapest door you will ever have to walk out of.

MYGA guarantees, including any renewal rate, are backed by the claims-paying ability of the issuing insurer. They are not FDIC insured.

Frequently asked questions