Clear Spring Highlander Fixed Indexed Annuity Review

The Clear Spring Highlander is a Fixed Indexed Annuity (FIA) plan that offers the annuitant (annuity investor) the opportunity to earn a portion of a market index-linked return without incurring the risk of market downside. This is a suitable plan for individuals seeking a simple, fixed-indexed annuity that offers tax-deferred growth and downside protection, with a primary focus on an initial premium bonus and an optional lifetime income rider.

Let’s have a look at the high-level fine print of the Clear Spring Highlander Fixed Indexed Annuity, and then we will discuss each point in detail.

How does the Clear Spring Highlander Fixed Indexed Annuity policy work?

Any annuitant (maximum age at the time of policy issue: 80) can purchase the Clear Spring Highlander Fixed Indexed Annuity with a minimum initial purchase amount of $5,000, and in return, they will earn market index returns (calculated through a formula that we will discuss shortly), credited as per the chosen crediting period. Apart from the regular crediting period, various events may trigger earnings credit, including free withdrawals, long-term care events, terminal illness or injury events, or when a death benefit is payable. The annuity offers an initial premium boost and an optional paid rider that helps the annuitant secure lifetime withdrawals they cannot outlive. We will discuss this further in the latter section of this annuity review.

The Clear Spring Highlander Fixed Indexed Annuity allows the annuitant to choose crediting strategies tied to three indexes (S&P 500 Index, S&P MARC 5% Excess Return Index, and S&P 500 Dynamic TCA Index) to determine their earnings crediting formula. The S&P 500 index has 2 crediting strategies, and the other two indexes have one strategy each. The plan also offers a fixed-rate guaranteed interest strategy to choose from, making a total of 5 strategy options. We will discuss each available index briefly:

1. S&P 500 IndexThe S&P 500 index is one of the most popular and oldest indexes in the world. It tracks 500 large-cap publicly traded stocks listed in the United States. It is a reliable index and has often succeeded in the test of time. It is very important to note that, similar to most other annuities, the Clear Spring Highlander Fixed Indexed Annuity offers the S&P 500 index with cap rates, participation rates, and performance-trigger rates in place, meaning that your actual interest credited will be lower compared to the actual index return. These rates are subject to frequent changes; I will discuss them in detail shortly.2. S&P 500 MARC 5% Excess Return IndexThe S&P MARC 5% Excess Return Index is a multi-asset index designed to provide diversification within a risk-weighted framework. It tracks three underlying component indices representing equities (S&P 500), commodities (S&P GSCI Gold), and fixed income (S&P 10-Year U.S. Treasury Note futures). The index dynamically rebalances between these asset classes and cash to target a 5% level of volatility. This approach aims to protect against market downturns, but it also limits the index's upside.3. S&P 500 Dynamic Intraday TCA IndexThe S&P 500 Dynamic Intraday TCA Index is a financial index designed to provide exposure to the S&P 500 through the use of E-mini S&P 500 futures. This index employs a dynamic approach, utilizing 13 observation windows throughout the trading day to adapt to changing market conditions. By doing so, it aims to offer a more stable volatility experience for investors. This approach aims to protect against market downturns, but it also limits the index's upside.

It is very important to note that, like other Fixed Indexed Annuities, the Clear Spring Highlander Fixed Indexed Annuity comes with cap rates, participation rates, etc., for these indexes, meaning that you will be credited only a part of the index return to your annuity. These rates change frequently; I will discuss them more shortly.

Note: In addition to allocating the funds in the following indexes, the annuitant also has the option to allocate funds at a fixed interest. These Fixed Rates change from time to time. The Fixed Rate for the 10-year withdrawal charge period at the time of writing this article was 3.60%

At the time of this review (Feb 2026), this was the published figure. For current rates, see Current Rates ↓.

The earnings crediting formula

The earnings crediting formula is the most important part of this annuity discussion. It is essential to note that we don’t simply receive the index return credited to our annuity. The company has a few rate-limiting mechanisms (in the form of cap rates and participation rates) that affect our earnings. These rates are subject to change over time, and you can check the updated rates with the assistance of your financial advisor or on the company’s website.

Let’s have a look at the Clear Spring Highlander Fixed Indexed Annuity rate sheet (as of January 2026) to understand how the earnings are determined.

From the above rate chart, you will notice five interest crediting options (one fixed and four indexed) along with an initial 10% premium bonus. Let’s take a closer look at the various terms the company uses in the Highlander FIA rate chart:

1. Cap Rates: This refers to the rate at which your interest-earning capacity is capped. For example, if an index returns 12% but the contract’s cap rate is 6%, the annuitant will be eligible for an interest credit of 6% only. It doesn’t matter how much the index goes above the cap rate; the maximum interest that can be earned is the cap rate.
2. Participation Rate (PR): The participation rate describes the annuitant’s participation percentage in the return of an index. For example, suppose the participation rate is 150%, and the index returned 4% over the agreed time. In that case, the annuitant will be eligible for 150% of the return, i.e., 6%.
3. Fixed Rate: If you opt for a fixed account rate, you simply earn the fixed rate for a particular period specified by the company before your policy begins. These rates are usually low/at par as compared to other fixed avenues, such as CDs and MYGAs, so you should avoid fixed rates in a general scenario. The 1-year fixed rate on this policy at the time of writing this article was 3.60%.

At the time of this review (Feb 2026), this was the published figure. For current rates, see Current Rates ↓.

Initial Premium Bonus

In a fixed indexed annuity (FIA), the initial premium bonus is a percentage of the amount you invest, added to your account value at the time of purchase. This bonus is designed to provide a head start on growth, enhancing the initial value of your annuity. The bonus is typically offered as an incentive to choose a particular annuity product and can boost the long-term accumulation potential of your annuity.

For example, if you purchase a fixed indexed annuity with a 10% initial bonus and invest $100,000, the insurance company will add an extra $10,000 to your account. As a result, your account value will immediately be $110,000. This bonus will continue to grow along with your account value based on the performance of the chosen crediting strategies (fixed or indexed), potentially enhancing your future income or withdrawal benefits.

It’s important to review any conditions or restrictions related to the bonus, as there might be limitations on accessing it early or specific withdrawal provisions that could reduce its impact.

However, as with most financial products, there are no free lunches. This bonus is compensated by slightly lower cap and participation rates compared to a product that doesn’t offer a premium bonus, such as the Clear Spring ViStar Fixed Indexed Annuity. The trade-off here is between getting an immediate boost in your account value through the bonus or potentially achieving higher long-term growth with better crediting rates. The decision ultimately depends on your financial goals and whether you prioritize short-term gains or long-term growth potential.

Among these indexes, I prefer the S&P 500 Index with a cap option and the S&P MARC 5% Excess Return Index with a Par rate option. I avoid any S&P 500 strategy with a participation rate because the company offers a low participation rate for the S&P 500 Index. You can also consider allocating a portion of your premium to the fixed account option, as the company is currently offering a decent fixed rate to park a part of your premium in a less risky strategy.

Accessing your Money

Each year, you are entitled to a 10% free withdrawal of your contract value without incurring any charges, fees, or penalties.

Should your needs change unexpectedly, and you need to take an excess withdrawal (a withdrawal that is above the free withdrawal amount available in a given contract year), you may be entitled to access additional monies, although certain charges and penalties may apply. Any amount withdrawn in excess of the remaining free withdrawal amount is subject to a Surrender Charge. Below is the Surrender Charge schedule for the Clear Spring Highlander Fixed Indexed Annuity.

Market Value Adjustments - In case you need to surrender your policy, a Market Value Adjustment (MVA) will be applied to the portion of the withdrawal or surrender that exceeds the free withdrawal amount during the withdrawal charge period. The surrender charge schedule is different for the different tenures of annuities and also changes for some states.

The surrender charge of Clear Spring Highlander Fixed Indexed Annuity is in line with all the other annuity issuers.

Once the surrender charge period ends, you can typically access your full contract value without fees. However, any withdrawal reduces both your contract value and, if applicable, the income base tied to optional riders, which may impact future guaranteed income.

An annuitant can also convert the contract into a stream of guaranteed income, known as annuitization. They can choose from various payout options designed to meet different needs.

• Life Only – Provides income for as long as you live.
• Joint and Survivor Life – Continues payments over two lifetimes, often used by couples.
• Life with Period Certain (up to 30 years) – Pays income for life, but guarantees payments for a minimum period even if death occurs earlier.
• Period Certain (up to 30 years) – Provides guaranteed payments for a set number of years, regardless of lifespan.
• Single Life or Joint Life with Cash Refund – Ensures that if the annuitant(s) pass away before receiving payments equal to the original premium, the difference is refunded to beneficiaries.
• Single Life or Joint Life with Installment Refund – Similar to the cash refund, but any remaining balance is paid out over time in installments.

These options offer flexibility in balancing lifetime income needs with legacy goals, enabling you to tailor how and when funds are accessed during retirement.

Death Benefit

Upon the annuitant’s death, the beneficiary will get the greater of (i) Account Value or (ii) Surrender Value

Contract/Administrative Charge

The Clear Spring Highlander Fixed Indexed Annuity levies no annual contract or administrative fees. However, if you opt for the lifetime income withdrawal rider, an annual charge of 0.90% applies, which is calculated and deducted from the account value on an annual basis. We will discuss this rider in more detail in the next section.

The Clear Spring Highlander FIA offers annuitants the option to choose an additional paid lifetime withdrawal rider. The Lifetime Withdrawal Rider in the Clear Spring Highlander Fixed Indexed Annuity is designed to provide annuitants with a secure stream of income that they cannot outlive. This rider ensures long-term financial stability, particularly during retirement, by offering guaranteed lifetime withdrawals. Below are the key features of this rider:

Key Features:

1. Issue Limit: The minimum issue age for this rider is 50 years, based on the age of the covered person. This ensures that individuals nearing or at retirement age can take advantage of the lifetime income benefits.
2. Waiting Period: Income withdrawals under this rider can begin anytime after the first contract year, provided the owner has reached age 60. This allows the annuitant to start receiving lifetime income as soon as they meet these requirements.
3. Benefit Base Bonus: The rider offers a 5% bonus on the premium paid during the first contract year, which is added to the income benefit base. This helps boost the amount used to calculate lifetime income, providing an immediate increase to the annuitant’s benefit base.
4. Benefit Base: The Benefit Base grows for 10 years based on the amount credited to the account value, plus a guaranteed 4% growth applied on each anniversary. This compounding growth ensures that the benefit base increases over time, which, in turn, increases the potential lifetime income available.
5. Annual Rider Charge Rate: A 0.90% annual charge applies to the rider. This charge is calculated based on the account value and is deducted each year. While this fee may reduce the account balance, the guaranteed income benefits of the rider can offset this impact over time.
6. Rider Termination: The rider may be terminated at any time after the first contract year at the owner's request. However, once terminated, the rider cannot be reinstated. Additionally, the rider will automatically terminate under the following conditions:Surrender of the contractElection of a settlement option under the annuity provision of the contract.Death of the ownerUpon death of the last covered person after lifetime withdrawals have begun.Change in ownership or annuitants, unless continued by the surviving spouse.Reaching the maturity date if lifetime withdrawals have not commenced.

How Rider Withdrawals Are Calculated

The amount that an annuitant can withdraw each year under the Lifetime Withdrawal Rider is determined by the following formula:

Benefit Base × Payout Factor = Annual Lifetime Withdrawal Amount

The payout factor is based on the annuitant’s age at the time withdrawals begin and the number of years since the contract was issued. These rates are pre-determined when you sign up for the annuity contract.

Example Illustration

Consider an investor who allocates $100,000 at age 55 into the ClearSpring Highlander annuity and does not take withdrawals for 10 years. The hypothetical Benefit Base grows to approximately $200,000 by age 65.

If the investor initiates lifetime income at age 65, applying the 7.00% withdrawal rate results in an annual guaranteed income of roughly $14,000 for life ($200,000 × 7.00%), regardless of future market performance or account value fluctuations.

This rider is ideal for individuals looking to secure a reliable income stream during retirement while benefiting from the growth potential of their annuity. The combination of a benefit base bonus and guaranteed growth provides the annuitant with peace of mind, knowing they have a steady income source that lasts a lifetime.

Also, as with most annuities, the Highlander FIA annuity also has free in-built nursing home and terminal illness waivers.

Nursing Home Waiver: After the first contract year, an annuitant can withdraw up to 100% of the contract’s accumulated value if he is confined to a Qualified nursing home for at least 90 consecutive days. No withdrawal charge or MVA applies if the owner qualifies for this benefit. Diagnosis must occur after the contract is issued, and written proof with supporting documentation is required from a qualified physician.

Terminal Illness Waiver: After the first contract year, an annuitant can withdraw up to 100% of the contract’s accumulated value if he is diagnosed with a terminal illness with a prognosis of 12 months or less. No withdrawal charge or MVA applies if the owner qualifies for this benefit. Diagnosis must occur after the contract is issued, and written proof with supporting documentation is required from a qualified physician.

Besides the Nursing Home Waiver and the Terminal Illness Waiver, the company also offers a Minimum Guaranteed Contract Value (MGCV) provision.

Minimum Guaranteed Contract Value (MGCV) - The Minimum Guaranteed Contract Value (MGCV) provision ensures that the account value of your annuity will be no less than 87.5 of the initial premium, adjusted for any withdrawals, upon reaching the 10-year milestone.

Suppose you invest an initial premium of $100,000 in an annuity product that offers an MGCV feature. Over the course of 10 years, you make withdrawals totaling $20,000.

Initial Premium: $100,000

Total Withdrawals: $20,000

Withdrawal (in %): 20%

The MGCV feature guarantees that your account value will be at least 87.5% of the initial premium, less any withdrawals, at the 10th anniversary.

MGCV Calculation:

87.5% of Initial Premium = 0.875 * $100,000 = $87,500

Adjusted for Withdrawals: $87,500 - 20% = $70,000

Therefore, at the end of the 10-year period, the MGCV ensures that your account value will not be less than $70,000, regardless of market conditions or investment performance.

You must always keep in mind that, unlike CDs, annuities are not guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other federal insurance agency. An annuity's "guarantee" is only as strong as the insurance company that issues the annuity, so it is always important to assess the issuing company before buying an annuity.

Clear Spring Life and Annuity Company

Clear Spring Life and Annuity Company, a subsidiary of Group 1001 (a dynamic network of several insurance businesses), specializes in providing a variety of annuity products tailored for retirement planning. Established in 1985, the company rebranded from Guggenheim Life and Annuity to its current name in 2022. It offers a broad range of annuities, including fixed indexed annuities, multi-year guaranteed annuities (MYGAs), and single premium immediate annuities (SPIAs).

In 2024, Clear Spring sold approximately $750 million in individual annuity premiums across 48 states, reflecting its strong presence in the annuity market. The company is known for providing flexible coverage, but it operates on a smaller scale compared to larger competitors, with assets under management of around $76 billion through its parent company, Group 1001.

Despite its smaller size, Clear Spring holds a solid financial strength rating of A- from A.M. Best, indicating stability and reliability.

With the advancement in healthcare and technology, the average person today is living longer than ever. So, it’s very important to have a stream of income that can grow safely and steadily and have the ability to provide a guaranteed income during retirement years. This not only helps you mitigate the risk of outliving your income but also ensures that you continue to live a decent life even in your retirement.

The Clear Spring Highlander FIA is a decent annuity that helps you grow your retirement account with less risk. Through its account value bonus, relatively higher caps and participation rates, It potentially offers faster growth with principal protection. The addition of the optional Lifetime Withdrawal Rider enhances the product's appeal by offering guaranteed lifetime income, ensuring retirees won’t outlive their savings. The relatively low rider fees and guaranteed growth of the benefit base make it a suitable choice for those focused on long-term retirement planning.