What is a fixed index annuity?

[Narrator] When it comes to preparing for the future, you know it's important to have a mix of savings vehicles.

But did you know that fixed index annuities can offer additional benefits while helping further diversify your overall portfolio? Here's how.

In a nutshell, fixed index annuities are insurance products that are designed to help meet your long-term retirement income needs.

[On-screen disclosure] Diversification does not ensure a profit or protect against loss. [End of on-screen disclosure]

They give you the potential for credited interest, which can grow tax-deferred.

They also offer guarantees against the loss of principal and any credited interest due to market downturns, and the reassurance of a death benefit for your beneficiaries.

[On-screen disclosure] Guarantees are backed by the financial strength and claims-paying ability of the issuing insurer. [End of on-screen disclosure]

And once you you're ready to retire, they can provide a guaranteed stream of income.

[On-screen disclosure] Distributions are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal additional tax. [End of on-screen disclosure]

In some cases, guaranteed income for life.

But how exactly do they work? Let's take a look behind the scenes.

Think about annuities in two phases, accumulation and distribution.

The accumulation phase comes first, when you can build your retirement savings and have the opportunity to grow your money income-tax-deferred.

The second phase is called distribution, or the income phase.

[On-screen disclosure] Distributions are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal additional tax. [End of on-screen disclosure]

This is when you start receiving money from your annuity, helping you live your retirement the way you want.

As you might expect, you'll owe income tax on any taxable portion.

To begin the accumulation phase, you give the insurance company money in one or more payments, which they use to support the benefits of your contract.

During this time, your annuity can earn an annual fixed rate of interest that is guaranteed by the insurance company.

Or if you're seeking additional accumulation potential, you can choose to allocate to an external market index, such as the S&P 500 Index, where you can earn interest based on positive changes that occur in that external market index.

[On-screen disclosure] Although an external index may affect your interest credited, the contract does not directly participate in any equity or fixed income investments. You are not buying shares in an index. [End of on-screen disclosure]

Allianz annuities also include a feature we call annual reset.

[On-screen disclosure] This example demonstrates annual crediting. Keep in mind, some contracts may also offer multi-year crediting options. [End of on-screen disclosure]

With annual reset, you can lock in the interest your contract receives each year, with some limits. However, annual reset also benefits you in years when the market is flat or down.

That's because it protects your principal and previously credited interest.

And following any contract year that ends with positive allocation performance, a fixed index annuity can still build value, even if your index has not recovered from previous losses.

When you're ready to start receiving income from your annuity, you'll need to specify how you want your income distributed.

[On-screen disclosure] Distributions are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal additional tax. [End of on-screen disclosure]

Don't worry, you won't have to decide until you're ready to start the distribution phase.

When the time comes, there are several ways you can receive the amount allowed by your contract: as a lump sum, over a set period of time, or as an income stream that will last for the rest of your life.

That's how fixed index annuities work.

But there's one more benefit to consider.

They can help address what we call the big HIT.

That stands for healthcare, inflation, and taxes.

The three big reasons your retirement income may not go as far as you think.

[On-screen disclosure] Increasing income potential may be provided through either a built-in or additional-cost rider. [End of on-screen disclosure]

Even if you're starting with what seems like a substantial income, these unpredictable rising costs could chip away at your purchasing power over time.

That's why you may consider a fixed index annuity that also offers the potential to increase your income through an income benefit, such as an income rider that may be built in or have an additional cost.

So if you're looking for principal protection from market downturns, tax-deferred growth potential, one or more index allocation options to choose from, death benefit options, and guaranteed income for life, it may be worth looking into a fixed index annuity.

For complete information, ask your financial professional if a fixed index annuity is appropriate for your needs.

Don't have a financial professional? Contact us at www.allianzlife.com for help.

[On-screen disclosures]

Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest and the reassurance of a death benefit for beneficiaries.

The S&P 500® Index is comprised of 500 stocks representing major U.S. industrial sectors.

The "S&P 500® Index" is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"), and has been licensed for use by Allianz Life Insurance Company of North America ("Allianz"). S&P®, S&P 500®, US 500, and The 500 are trademarks of S&P Global, Inc. or its affiliates ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Allianz. Allianz products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500® Index.

Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

With the purchase of any additional-cost riders, the contract's values will be reduced by the cost of the rider.

This may result in a loss of principal and interest in any year in which the contract does not earn interest or earns interest in an amount less than the rider charge.

This content is for general educational purposes only. It is not intended to provide fiduciary, tax, or legal advice and cannot be used to avoid tax penalties; nor is it intended to market, promote, or recommend any tax plan or arrangement.

Allianz Life Insurance Company of North America, its affiliates, and their employees and representatives do not give legal or tax advice. Customers are encouraged to consult with their own legal, tax, and financial professionals for specific advice or product recommendations.

Distributions are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal additional tax.

Products are issued by Allianz Life Insurance Company of North America (Allianz), 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. www.allianzlife.com

• Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF

ENT-4002 (2/2025)

[End of on-screen disclosures]