Menu burger Close thin Facebook Twitter Google plus Linked in Reddit Email arrow-right-sm arrow-right
Tap on the profile icon to edit
your financial details.

National Western Life Annuity Review

Your Details Done
by Updated

This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

National Western Life Insurance Companyis an Austin, Texas-based insurance company that offers coverage to individuals in 49 states. In addition to extensive annuity offerings, National Western Life (NWL) also provides life insurance services. In 2015, the company became a wholly owned subsidiary of National Western Life Group, Inc.

Annuities can be difficult to understand, and it's not always clear which type of annuity best fits your needs. If you're not surte where to begin with annuities, consider working with a financial advisor in your area.

Annuity Fees Annuity Type Minimum Initial Premium More Information
NWL Ultra Classic® Annuity Find an Advisor

Read Review

  • Variable asset fee rates and annual charges
  • Optional rider fees
Fixed Indexed Annuity $2,000

Annuity Type

Fixed Indexed Annuity

Minimum Initial Premium

NWL Prevail Seven® Annuity Find an Advisor

Read Review

  • No annual fees
Fixed Annuity $5,000

Annuity Type

Fixed Annuity

Minimum Initial Premium

NWL Benefit Assurance Annuity Find an Advisor

Read Review

  • No annual fees
Fixed Annuity $5,000

Annuity Type

Fixed Annuity

Minimum Initial Premium


National Western Life Insurance Company has secured a few financial strength ratings from some of the major ratings firms. A.M. Best gives it at an A (Excellent) and Standard & Poor’s (S&P) has it at an A- (Strong).

NWL Ultra Classic® Annuity

The Ultra Classic® Annuity from NWL is a flexible premium deferred annuity, meaning you can contribute to your contract over time and have taxes deferred until retirement. As a fixed indexed annuity, you have the opportunity to benefit from both investment-based and fixed returns.

Your initial premium payment must be at least $2,000, or $5,000 for a non-qualified account. You can make additional contributions at any time, but they must each be at least $100 in size. This money will grow in varying ways depending on how you choose to allocate it. One option is the contract’s fixed interest rate, which is presented by NWL in advance and won’t change for at least the first year of your contract.

For the indexed half of this contract, you have three strategies to pick from: Monthly Average with Participation Rate and Asset Fee Rate, Annual Point-to-Point with Cap and Charge and Annual Point-to-Point option with Participation Rate and Asset Fee Rate. Here’s a breakdown of each:

  • Option A - Monthly Average with Participation Rate and Asset Fee Rate: Your annual return is calculated by finding the percent change between the average of the S&P 500 over the last 12 months and its value on the prior anniversary of your contract. This value is then multiplied by the participation rate and the Asset Fee Rate is subtracted. What’s left is your interest rate for that year. If the value is negative, then your account will remain unchanged.
  • Option J - Annual Point-to-Point with Cap and Charge: The amount your account is credited is determined by calculating the percent change between the current value of the S&P 500 and its value on the previous contract anniversary. If this is below your percentage cap, then the charge rate will be subtracted and the remainder will be applied to your account.
  • Option U - Annual Point-to-Point option with Participation Rate and Asset Fee Rate: This is essentially a hybrid between the two prior options. In turn, the percent change is calculated in the same way as Annual Point-to-Point with Cap and Charge. Next, this change is multiplied by the participation rate and the asset fee rate is then subtracted. What remains is credited to your account value.


If you choose to add the optional withdrawal benefit rider to your contract, you’ll pay a maximum annual fee of 1%. Additionally, the maximum asset fee rates for Option A and Option U are 6%. For Option J, there’s a 2% maximum annual charge rate.

After the first year of your contract’s life, you can make a single annual withdrawal of up to 10% of its balance. If you withdraw more, then you’ll face a withdrawal charge. If you go a whole year without making any withdrawals, then your 10% from that year can roll over to the next year, up to 50%. Withdrawal fees go as follows:

Withdrawal Fee Schedule
Policy Year Issue Ages 0-51 Issue Age 52 Issue Age 53 Issue Age 54 Issue Age 55
1 15% 15% 14.25% 13.25% 12.5%
2 14.75% 14.25% 13.25% 12.5% 11.75%
3 14% 13.25% 12.5% 11.75% 10.75%
4 13% 12.5% 11.75% 10.75% 10%
5 12.25% 11.75% 10.75% 10% 9%
6 11.25% 10.75% 10% 9% 8.25%
7 10.5% 10% 9% 8.25% 7.25%
8 9.75% 9% 8.25% 7.25% 6.5%
9 8.75% 8.25% 7.25% 6.5% 5.5%
10 8% 7.25% 6.5% 5.5% 4.5%
11 6% 6% 5.5% 4.5% 3.75%
12 4% 4% 4% 3.75% 2.75%
13 2% 2% 2% 2% 1.75%


Withdrawal Fee Schedule (cont.)
Policy Year Issue Ages 56 Issue Age 57 Issue Age 58 Issue Age 59 Issue Ages 60-85
1 11.75% 12.5% 13.5% 14.5% 15%
2 10.75% 11.75% 12.75% 13.75% 14.75%
3 10% 11% 11.75% 12.75% 14%
4 9% 10% 11% 12% 13%
5 8.25% 9.25% 10.25% 11.25% 12.25%
6 7.25% 8.25% 9.25% 10.25% 11.25%
7 6.5% 7.5% 8.5% 9.5% 10.5%
8 5.5% 6.5% 7.5% 8.5% 9.75%
9 4.5% 5.5% 6.5% 7.75% 8.75%
10 3.75% 4.75% 5.75% 6.75% 8%
11 2.75% 3.75% 4.75% 6% 6%
12 1.75% 2.75% 4% 4% 4%
13 0.75% 2% 2% 2% 2%

With any withdrawal you make before age 59.5, you may face a 10% income tax penalty from the IRS.

Reasonable Return Expectations

Forecasting the returns of any fixed indexed annuity is difficult, as it’s essentially impossible to tell where the market is actually headed. But while NWL does not release its fixed interest rates, it does offer some numbers in relation to its indexing methods:

  • Option A - Monthly Average with a Participation Rate and Asset Fee Rate
    • Minimum participation rate: 50%
    • Maximum asset fee rate: 6%
  • Option J - Annual Point-to-Point with Annual Cap and Charge
    • Minimum annual index cap rate: 1%
  • Option U - Annual Point-to-Point option with Participation Rate and Asset Fee Rate
    • Minimum participation rate: 20%
    • Maximum asset fee rate: 6%

For reference, a participation rate equals the percentage of an index's performance you'd be credited with. For example, if an index gained 10% returns over a year, you'd receive half of that with a 50% participation rate.

NWL Prevail Seven® Annuity

The NWL Prevail Seven® is a fixed deferred annuity that’s available to anyone under the age of 90 with at least $5,000 to invest. The account comes with a 10-year fixed interest rate period that features a withdrawal fee schedule of the same length. However, once your contract reaches its 17th anniversary, you can annuitize and start receiving payouts for a fixed period of at least five years.

This contract comes with a standard death benefit. If you die before your annuitization date, your account’s full value will be paid to your beneficiary. But if you pass away after the annuitization date, your beneficiary will only receive any unpaid guarantee amounts.


The NWL Prevail Seven® is light on fees in general, but you will have to watch out for withdrawal charges. These charges will kick in if you attempt to withdraw more than 10% of your money within one year of your contract. The penalty is applied as a percentage of the withdrawal that exceeds 10%; those penalty percentages decrease as your contract matures, according to the following schedule:

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11+
10% 10% 9% 9% 8% 7% 6% 5% 5% 5% 0%

An annuity is a retirement savings product, so if you withdraw from it before age 59.5, you’ll be hit with a 10% income surtax by the IRS. This is in addition to your standard income tax rate.

Reasonable Return Expectations

The NWL Prevail Seven® Annuity comes with a guaranteed minimum interest rate of 2%. During your first year as an account holder, though, you’ll receive an upgraded interest rate of 7%. This rate is subject to change each year, though.

NWL Benefit Assurance Annuity

The NWL Benefit Assurance Annuity is a fixed annuity that accrues interest at a specific rate throughout its term. Although you can annuitize this contract after just five years, its early withdrawal fee schedule lasts 14 years. To open this account, you’ll need to be 85 years old or younger and have $5,000 ready to invest.

NWL also offers a bonus on premiums you make to this contract. For your first year, the bonus is 5%, with a 4% bonus applying to premiums made from years two through five.

Regardless of when you die, the death benefit attached to this contract is equal to its accumulation amount. You have full authority to name whoever you want as your beneficiary.


Fixed annuities are known for being largely fee-free, and the NWL Benefit Assurance Annuity is no exception. In fact, the only fees to be mindful of are early withdrawal charges. While NWL allows annuitants to withdraw up to 10% of their contract value annually, anything above that amount will be accompanied by a withdrawal penalty.

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
16% 16% 15.75% 15% 14% 13.25% 12.5% 11.5%


Withdrawal Fee Schedule (cont.)
Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15+
10.75% 10% 8% 6% 4% 2% 0%

The IRS charges any annuitants who withdraw from their contract before reaching age 59.5 a 10% income tax penalty. This is in addition to standard income tax rates.

Reasonable Return Expectations

The interest rate for this annuity is determined by averaging the “5-Year Constant Maturity Treasury Rate” for each month starting with seven months before the start of the current quarter and ending one month before, then subtracting 1.25%. The minimum rate is 1%, and the maximum is 3%.

Tips to Help You Plan for Retirement

  • An experienced financial advisor can be a big help in navigating the annuity landscape. Luckily, finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool can match you with financial advisors in your area in 5 minutes. Get started now.
  • If you’re just starting your retirement planning, a good first step is to see if you're on pace to hit your retirement income needs. SmartAsset’s retirement calculator is a perfect place to start.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset