Kentucky offers a flat income tax rate that has been declining for years, currently 4.0% and scheduled to drop to 3.5%, plus a $31,110 per-person retirement income exclusion that substantially reduces the effective rate on annuity withdrawals for most retirees. Louisville, Lexington, Bowling Green, and the scenic lake country draw retirees who want Appalachian beauty and a tax structure that rewards retirement savings. Understanding how annuities work is a smart first step before comparing today’s rates.
Below are today’s best MYGA rates available to Kentucky residents, filtered to carriers rated A- or better, updated daily.
2-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oceanview Life and Annuity | Harbourview 2 | 5.15%Top Rate | 2 yr | $70,000 | 10% | |
| Axonic Insurance | Waypoint 2 MYGA | 5.10% | 2 yr | $100,000 | 10% | |
| GBU Life | Asset Guard Select 2 | 5.05% | 2 yr | $25,000 | 10% | |
| Aspida | Synergy Choice 2 | 4.80% | 2 yr | $100,000 | 0% | |
| Mass Mutual | Premier Voyage 2 | 4.70% | 2 yr | $1,000,000 | 10% | |
| Americo | Platinum Assure 2 | 4.15% | 2 yr | $25,000 | 3% |
3-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Ibexis | MYGA Plus 3 (Simple Interest) SI | 6.15%Top Rate | 3 yr | $100,000 | 10% | |
| American National Insurance Company | Palladium MYG MAX 3 | 5.90% | 3 yr | $250,000 | 0% | |
| Knighthead Life | Staysail 3 (Simple Interest) SI | 5.85% | 3 yr | $100,000 | 0% | |
| American National Insurance Company | Palladium MYG Annuity 3 | 5.75% | 3 yr | $250,000 | 10% | |
| Athene IA | Athene Max Rate 3 | 5.75% | 3 yr | $100,000 | Interest Only | |
| American National Insurance Company | Palladium Match MYG Annuity 3 | 5.70% | 3 yr | $250,000 | 10% | |
| Aspida | Synergy Choice 3 | 5.70% | 3 yr | $100,000 | 0% | |
| Axonic Insurance | Waypoint 3 MYGA | 5.65% | 3 yr | $100,000 | 10% |
4-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oxford Life Insurance Company | Multi-Select 4 | 5.75%Top Rate | 4 yr | $20,000 | 10% | |
| Americo | Platinum Assure 4 | 5.70% | 4 yr | $25,000 | 5% | |
| Oceanview Life and Annuity | Harbourview 4 | 5.70% | 4 yr | $70,000 | 10% | |
| Clear Spring Life | Preserve MYGA 4 | 5.60% | 4 yr | $100,000 | 10% | |
| Mass Mutual | Premier Voyage 4 | 5.55% | 4 yr | $1,000,000 | 10% | |
| Guardian Insurance & Annuity Co. | Guardian Fixed Target Annuity 4 | 5.50% | 4 yr | $100,000 | 10% | |
| Nationwide Life Insurance Company | Secure Growth 4 MVA | 5.50% | 4 yr | $100,000 | 10% | |
| Mass Mutual | Stable Voyage 4 | 5.45% | 4 yr | $100,000 | 10% |
5-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Knighthead Life | Staysail 5 (Simple Interest) SI | 6.65%Top Rate | 5 yr | $100,000 | 0% | |
| Ibexis | MYGA Plus 5 (Simple Interest) SI | 6.60% | 5 yr | $100,000 | 10% | |
| Aspida | Synergy Choice 5 | 6.30% | 5 yr | $100,000 | 0% | |
| Axonic Insurance | Waypoint 5 MYGA | 6.10% | 5 yr | $100,000 | 10% | |
| Athene IA | Athene Max Rate 5 | 6.05% | 5 yr | $100,000 | Interest Only | |
| Global Atlantic Financial Group | SecureFore II 5 | 6.00% | 5 yr | $100,000 | 10% | |
| Knighthead Life | Staysail 5 With Liquidity (Simple Interest) SI | 6.00% | 5 yr | $100,000 | 10% | |
| Nationwide Life Insurance Company | Secure Growth 5 MVA | 6.00% | 5 yr | $100,000 | 10% |
6-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oceanview Life and Annuity | Harbourview 6 | 6.10%Top Rate | 6 yr | $70,000 | 10% | |
| Oxford Life Insurance Company | Multi-Select 6 | 5.95% | 6 yr | $20,000 | 10% | |
| Americo | Platinum Assure 6 | 5.90% | 6 yr | $25,000 | 5% | |
| Guardian Insurance & Annuity Co. | Guardian Fixed Target Annuity 6 | 5.80% | 6 yr | $100,000 | 10% | |
| Mass Mutual | Premier Voyage 6 | 5.75% | 6 yr | $1,000,000 | 10% | |
| Clear Spring Life | Preserve MYGA 6 | 5.70% | 6 yr | $100,000 | 10% | |
| American General Life Insurance Company | American Pathway VisionMYG 6 | 5.40% | 6 yr | $100,000 | 15% | |
| Corebridge Financial | American Pathway VisionMYG 6 | 5.40% | 6 yr | $100,000 | 15% |
7-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Knighthead Life | Staysail 7 (Simple Interest) SI | 7.10%Top Rate | 7 yr | $100,000 | 0% | |
| Ibexis | MYGA Plus 7 (Simple Interest) SI | 6.85% | 7 yr | $100,000 | 10% | |
| Aspida | Synergy Choice 7 | 6.35% | 7 yr | $100,000 | 0% | |
| Athene IA | Athene Max Rate 7 | 6.15% | 7 yr | $100,000 | Interest Only | |
| Knighthead Life | Staysail 7 With Liquidity (Simple Interest) SI | 6.05% | 7 yr | $100,000 | 10% | |
| Americo | Platinum Assure 7 | 6.00% | 7 yr | $25,000 | 5% | |
| Global Atlantic Financial Group | SecureFore II 7 | 6.00% | 7 yr | $100,000 | 10% | |
| AuguStar | LunarGuard 7 MVA | 5.95% | 7 yr | $100,000 | 5% |
8-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oxford Life Insurance Company | Multi-Select 8 | 5.90%Top Rate | 8 yr | $20,000 | 10% | |
| Clear Spring Life | Preserve MYGA 8 | 5.70% | 8 yr | $100,000 | 10% | |
| Pacific Guardian Life | Diamond Head 8 | 5.40% | 8 yr | $10,000 | 10% | |
| American National Insurance Company | Palladium MYG Annuity 8 | 5.30% | 8 yr | $250,000 | 10% | |
| Guaranty Income Life | Guaranty Rate Lock 8 | 3.90% | 8 yr | $250,000 | 5% |
9-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oxford Life Insurance Company | Multi-Select 9 | 5.95%Top Rate | 9 yr | $20,000 | 10% | |
| Capitol Life Insurance Company | Heritage Elite 9 | 5.75% | 9 yr | $10,000 | 0% | |
| Liberty Bankers Life | Heritage Elite 9 | 5.75% | 9 yr | $10,000 | 0% | |
| Capitol Life Insurance Company | Heritage Premier 9 | 5.70% | 9 yr | $10,000 | Interest Only | |
| Clear Spring Life | Preserve MYGA 9 | 5.70% | 9 yr | $100,000 | 10% | |
| Liberty Bankers Life | Heritage Premier 9 | 5.70% | 9 yr | $10,000 | Interest Only | |
| Capitol Life Insurance Company | Heritage Classic 9 | 5.65% | 9 yr | $10,000 | 10% | |
| Liberty Bankers Life | Heritage Classic 9 | 5.65% | 9 yr | $10,000 | 10% |
10-Year MYGA Rates
| Carrier | Product | AM Best | Rate | Term | Min Premium | Free Withdrawal |
|---|---|---|---|---|---|---|
| Oceanview Life and Annuity | Harbourview 10 | 6.20%Top Rate | 10 yr | $70,000 | 10% | |
| Lincoln Financial | Lincoln MYGuarantee Plus 10 | 6.00% | 10 yr | $100,000 | 10% | |
| Oxford Life Insurance Company | Multi-Select 10 | 5.95% | 10 yr | $20,000 | 10% | |
| Reliance Standard Life | Reliance Guarantee - 10 | 5.90% | 10 yr | $20,000 | 10% | |
| Delaware Life | Pinnacle Plus MYGA 10 | 5.85% | 10 yr | $100,000 | 10% | |
| Royal Neighbors of America | MYGA 10 Year | 5.80% | 10 yr | $100,000 | Interest Only | |
| American General Life Insurance Company | American Pathway VisionMYG 10 | 5.75% | 10 yr | $100,000 | 15% | |
| Assurity Life | SecurePath 10 | 5.75% | 10 yr | $2,000 | 12% |
Rates shown are for informational purposes only and subject to change without notice. Only carriers rated A− or better by AM Best are included. Products marked SI use simple interest — the effective compound yield is lower than the stated rate. Minimum premiums shown are for non-qualified (after-tax) funds. Always verify current rates with a licensed annuity broker before purchasing.
Key Takeaways
- Kentucky’s income tax is a flat 4.0%, and the rate is legally scheduled to continue declining toward 3.5% as revenue targets are met
- Kentucky residents may exclude up to $31,110 per person of retirement income, including qualifying annuity payments, from state income tax each year
- The Kentucky Life and Health Insurance Guaranty Association protects up to $250,000 in annuity present value per person, per insurer
- Kentucky law requires a minimum 10-day free-look period for annuity contracts
- Kentucky has no state estate tax, it repealed its estate tax in 2005
Are Fixed Annuities a Good Investment in Kentucky?
Kentucky’s $31,110 retirement income exclusion is the headline for annuity buyers. A married couple can each claim the exclusion for a combined $62,220 per year in tax-free retirement income. For a retiree drawing $31,110 or less per year from their annuity, Kentucky’s effective state tax rate on that income is zero. For those drawing more, only the amount above $31,110 faces the 4.0% rate.
Here is a concrete example: Carol, age 68, lives in Louisville and draws $40,000 per year from her MYGA-funded IRA. She claims Kentucky’s $31,110 retirement income exclusion, leaving only $8,890 subject to Kentucky income tax at 4.0%, a tax bill of $356 on $40,000 of withdrawal. That is an effective Kentucky tax rate of less than 1% on her annuity income. Without the exclusion, she would owe $1,600. The exclusion cuts her Kentucky tax bill by 78%.
Kentucky has no estate tax, and the flat rate continues to decline. Income deferred inside a MYGA today may be taxed at 3.5% or lower when withdrawn in future years.
Kentucky Guaranty Association: How Your Annuity Is Protected
The Kentucky Life and Health Insurance Guaranty Association (KLHIGA) protects Kentucky policyholders if a licensed insurer becomes insolvent. Coverage is automatic, no enrollment required.
| Coverage Type | Kentucky Protection Limit |
|---|---|
| Annuity present value | $250,000 per person, per insurer |
| Life insurance death benefit | $300,000 per person, per insurer |
| Life insurance cash value | $100,000 per person, per insurer |
| Multiple policies at same insurer | Combined subject to limits above |
For annuity portfolios over $250,000, split across two or more carriers rated A- or better to keep each position within coverage limits.
Kentucky Life and Health Insurance Guaranty Association
Website: kylifega.org
How Kentucky Taxes Annuity Income
Kentucky taxes annuity income at a flat 4.0%. Residents can exclude up to $31,110 per person of qualifying retirement income, including IRA distributions and annuity payments, from Kentucky taxable income each year. Only income above the exclusion amount is subject to the 4.0% flat rate. Kentucky does not tax Social Security benefits.
| Annuity Type | Kentucky Tax Treatment | Rate |
|---|---|---|
| Qualified annuity (IRA/401(k)) | $31,110 per person excluded; amount above exclusion taxable | 4.0% flat (above exclusion) |
| Non-qualified annuity gains | $31,110 per person excluded; amount above exclusion taxable | 4.0% flat (above exclusion) |
| Social Security | Fully exempt | 0% |
| 1035 Exchange | No Kentucky tax triggered on the exchange itself | N/A |
Kentucky has no state estate tax (repealed 2005). Kentucky does have an inheritance tax for transfers to non-immediate family members, but transfers to a spouse, parent, child, grandchild, or sibling are fully exempt. Annuity death benefits paid to named beneficiaries bypass probate.
Kentucky Department of Insurance
The Kentucky Department of Insurance (DOI) licenses and regulates all insurance carriers and agents operating in Kentucky. Verify both the carrier and your agent before purchasing an annuity.
| Contact | Details |
|---|---|
| Agency | Kentucky Department of Insurance |
| Consumer services | 502-564-3630 |
| Toll-free | 1-800-595-6053 |
| Website | insurance.ky.gov |
| License verification | Kentucky license lookup |
Tips for Buying an Annuity in Kentucky
- Max out the $31,110 exclusion each year: Kentucky’s retirement income exclusion means the first $31,110 of annuity income per person faces zero Kentucky income tax. A married couple drawing up to $62,220 combined pays no Kentucky tax on that income. Structure withdrawals to stay within the exclusion whenever possible.
- The declining flat rate works in your favor: Kentucky’s flat tax has been declining each year and is scheduled to reach 3.5%. Income deferred today in a MYGA may be taxed at a lower rate when you withdraw in future years.
- Social Security is exempt: Kentucky does not tax Social Security benefits, a meaningful advantage for retirees combining Social Security with annuity income.
- No estate tax simplifies planning: Kentucky repealed its estate tax in 2005. Name beneficiaries on your annuity contracts to bypass probate and pass death benefits cleanly.
- Don’t exceed $250,000 per carrier: For portfolios over $250,000, use two or more carriers rated A- or better to stay within guaranty limits.
- Use the free-look period: Kentucky requires at least 10 days to review and cancel any annuity contract for a full premium refund.
Frequently Asked Questions
Does Kentucky tax annuity income?
Yes, at a flat 4.0%, but only on the amount above Kentucky’s $31,110 per-person retirement income exclusion. For many retirees, the exclusion eliminates most or all of their Kentucky income tax on annuity withdrawals. Kentucky does not tax Social Security benefits.
What is the best annuity rate in Kentucky today?
The best MYGA rates available to Kentucky residents from carriers rated A- or better currently top out at 7.10%, depending on the term. See the live rate table above for current figures updated daily.
How much does the Kentucky Guaranty Association cover?
The Kentucky Life and Health Insurance Guaranty Association protects up to $250,000 in annuity present value per person, per insurance company. For investments over $250,000, spread across multiple carriers rated A- or better.
What is Kentucky’s $31,110 retirement income exclusion?
Kentucky residents can exclude up to $31,110 per person of qualifying retirement income, including IRA distributions and annuity payments, from Kentucky income tax each year. For a retiree drawing $31,110 or less annually from their annuity, the Kentucky effective tax rate on that income is zero. Married couples can each claim the exclusion.
Does Kentucky have an estate tax?
No. Kentucky repealed its state estate tax in 2005. Kentucky does have an inheritance tax, but transfers to a spouse, parent, child, grandchild, or sibling are fully exempt. Most annuity beneficiaries will fall into an exempt category.
What is the free-look period for annuities in Kentucky?
Kentucky requires a minimum 10-day free-look period. You can return the contract for a full refund of premium within that window.
Who regulates annuities in Kentucky?
The Kentucky Department of Insurance. Verify licenses at insurance.ky.gov or call 1-800-595-6053.
