MINNEAPOLIS – Mar. 03, 2020 – To help clients who feel behind on retirement savings and also want the option of accessing retirement income early, Allianz Life Insurance Company of North America (Allianz Life®) has developed a new fixed index annuity, the Allianz Benefit Control℠ Annuity. The new product is designed for clients seeking more control over how they create their guaranteed income, as well as the flexibility to change their retirement plan if their situation changes.
In addition to the general benefits of a fixed index annuity, like guarantees against the loss of principal and credited interest, and the reassurance of a death benefit for beneficiaries, Allianz Benefit Control also offers clients the ability to begin income on any monthly contract anniversary after age 50, with no minimum wait period.1
“So often we hear about Americans who are nearing retirement age, but don’t have enough money saved and are worried they won’t be able to catch up in time to feel more confident about retirement,” said Eric Thomes, chief distribution officer, Allianz Life. “This new annuity can help people take back control of their retirement planning by helping to make up some of that lost ground during the accumulation phase, and by allowing them to access their retirement income on their own terms.”
During the accumulation phase, clients can choose between two options for how to grow their protected income value (PIV). This Bonus Control2 benefit allows clients to decide how interest is credited between the primary values in their account:
- The Accelerated PIV Interest Bonus – this option is designed for clients who plan to take lifetime withdrawals in the future. It allows them to more aggressively pursue income savings goals during the accumulation phase, with a 250% interest bonus to their PIV, as well as a 50% interest factor added to the accumulation value.
- Balanced PIV Interest Bonus – with this option, more emphasis is placed on growing the accumulation value with a 150% PIV interest bonus and a 100% accumulation value interest factor. This may be a fit for clients who may need to take the accumulation value as a lump sum.
“The innovative benefit control options allow clients to choose the strategy that works best for their needs, and can be changed each contract year depending on their goals or if their life situation changes,” said Thomes.
This flexibility to change strategies when needed is increasingly important, as nearly half (49%) of retirees say they retired earlier than expected.3
Allianz Benefit Control also offers the potential to earn indexed interest based on changes in selected indexes and crediting methods. The new product also includes an index lock feature on one- and two-year point-to-point crediting options, which allows clients to lock in an index value on an indexed interest allocation at any point during the crediting period.
The potential for increasing income
The Allianz Benefit Control Annuity also helps address the risks that inflation can pose to a secure retirement by offering income increases4 every time a contract earns interest.
“Nearly half of Americans think that the rising cost of living is a big risk to their security in retirement,"5 said Thomes. “Having the opportunity for income increases that can help address inflation can go a long way in helping build a more secure retirement.”
1. Clients can start taking lifetime withdrawals from the annuity immediately or on any monthly anniversary after age 50 – but may be subject to a 10% federal early withdrawal penalty if withdrawals are taken before age 59½.
2. Both the premium bonus and interest bonus are credited only to the Protected Income Value (PIV). To receive the PIV, including the value of these bonuses, lifetime withdrawals must be taken. The PIV is not available as a lump sum. You will not receive these bonuses if the contract is fully surrendered or if traditional annuitization payments are taken. If it is partially surrendered the PIV will be reduced proportionally, which could result in a partial loss of bonuses. Lifetime withdrawals are considered partial withdrawals and are subject to ordinary income tax and, if taken prior to 59½, a 10% federal additional tax. Because this is a bonus annuity, it may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.
3. Allianz Life conducted an online survey in January 2020 with a nationally representative sample of 1,200 Americans, age 25+ with a household income of $50,000 (single)/$75k (married) or $150,000 in investable assets.
4. Increasing income potential is provided through an automatically included income rider at no additional cost.
5. Allianz Life conducted an online survey, the 2019 4Q Allianz Life Quarterly Market Perceptions Study in November 2019 with a nationally representative sample of 1,005 respondents age 18+.