How Index Advantage Income works

Allianz Index Advantage Income® Variable Annuity offers lifetime income with a new balance of performance and a level of protection, designed to help your assets work harder when it's time to start taking income. It includes a choice between two death benefits (one optional, for an additional fee) during the accumulation phase, multiple innovative index strategies, and a choice between consistent, level income, or increasing income potential to help meet your needs.

Contract options

The Allianz Index Advantage Income Variable Annuity provides a combination of traditional variable options along with the multiple index strategies. Each index option is the combination of a crediting method, also called an index strategy, and the index. An allocation to the index options is not a purchase of shares of any stock or index fund or a direct investment in an index. No single index option consistently delivers the most return under all market conditions. Transfers to any index options are allowed every Index Anniversary. Transfers from index options to the variable options are allowed every sixth Index Anniversary.

Your contract has a 1.25% annual product fee calculated as a percentage of the charge base, which is the contract value on the preceding quarterly contract anniversary, adjusted for subsequent purchase payments and withdrawals. Refer to the product brochure for more information on definitions of terms.

The Index PERFORMANCE Strategy is a crediting method that provides potential for higher performance with a level of protection from smaller index losses. This may be a good option if you are looking for a level of protection for your principal, while maintaining the potential for growth opportunities. This is accomplished by applying a performance credit based on the index return.

If the annual index return is positive, you’ll receive an annual performance credit equal to that return, up to a limit called the cap. If you take a partial withdrawal during an index year, the withdrawn amount will not receive a performance credit on the next Index Anniversary.

If the annual index return is negative, you may receive an annual negative performance credit – but only when the loss is greater than a specified percentage called the buffer. This helps provide a level of protection by absorbing the first 10% of negative index return in any given year. Losses in excess of 10% will reduce your contract value. Buffers cannot change for a contract after they are established.

The initial cap is declared on the Index Effective Date, which is the first date your money has the opportunity to be allocated to an index option, and on each Index Anniversary thereafter. The cap is subject to significant change annually on the Index Anniversary, and will never be less than 1.50%. Caps can be different between newly issued contracts and inforce contracts, and they can be different between inforce contracts issued on different days and in different years. Caps and buffers can also be different for each index. Deductions for the annual product fee of 1.25%, withdrawal charge, contract maintenance charges and, if applicable, the rider fee may result in a loss of principal or previously earned performance credits, and will not receive a performance credit on the next Index Anniversary.

The Index PRECISION Strategy is a crediting method that provides a level of protection for your principal, while maintaining the opportunity for predetermined upside performance potential.

If the annual index return is zero or positive, which means the value of the index remained the same or increased, you’ll receive an annual performance credit equal to the Precision Rate. If you take a partial withdrawal during an index year, the withdrawal amount will not receive a performance credit on the next anniversary.

If the annual index return is negative, you may receive an annual negative performance credit – but only when the loss is greater than a specified percentage called the buffer. This helps provide a level of protection by absorbing the first 10% of negative index return in any given year. Losses in excess of 10% will reduce your contract value. Buffers cannot change for a contract after they are established.

Precision Rates are declared on the Index Effective Date, which is the first date your money has the opportunity to be allocated to an index option, and on each Index Anniversary thereafter. Precision Rates are subject to significant change annually on the Index Anniversary, and will never be less than 1.50%. Precision Rates can be different between newly issued contracts and inforce contracts, and they can be different between inforce contracts issued on different days and in different years. Precision Rates and buffers can also be different for each index. Deductions for the annual product fee of 1.25%, withdrawal charges, contract maintenance charges and, if applicable, the rider fee may result in a loss of principal or previously earned performance credits, and will not receive a performance credit on the next Index Anniversary.

Availability restrictions may apply to inforce contracts. Please refer to the prospectus for additional details.

The Index GUARD Strategy is a crediting method that may be a good option if you are looking for a level of protection from more severe index losses, while maintaining the potential for higher performance.

If the annual index return is positive, you’ll receive an annual performance credit equal to that return, up to a limit called the cap. If you take a partial withdrawal during an index year, the withdrawn amount will not receive a performance credit on the next Index Anniversary.

If the annual index return is negative, you will receive a negative performance credit, but the negative performance credit will never be less than a specified percentage called the floor. This floor helps provide a level of protection by limiting any negative index return to no less than -10%. Negative index returns beyond the -10% floor will not reduce your contract value. Floors for a contract cannot change after they are established.

The cap is declared on the Index Effective Date, the first date your money has the opportunity to be allocated to an index option, and on each Index Anniversary thereafter. The cap is subject to significant change annually on the Index Anniversary, and will never be less than 1.50%. Caps can be different between newly issued contracts and in-force contracts, and they can be different between in-force contracts issued on different days and in different years. Caps and floors can also be different for each index. Deductions for the annual product fee of 1.25%, withdrawal charge, contract maintenance charges and, if applicable, the rider fee may result in a loss of principal or previously earned performance credits, and will not receive a performance credit on the next Index Anniversary.

The Index PROTECTION Strategy is a crediting method that offers principal protection with the potential for some growth.

The Index PROTECTION Strategy offers consistency. Only two outcomes are possible each Index Anniversary:

With the Index PROTECTION Strategy with cap, if the annual index return is positive, you’ll receive an annual performance credit equal to that return, up to a limit called the cap. If you take a partial withdrawal during an index year, the withdrawn amount will not receive a performance credit on the next anniversary. Caps are declared on the Index Effective Date, which is the first date your money has the opportunity to be allocated to an index option, and on each Index Anniversary thereafter.

With the Index PROTECTION Strategy with DPSC, if the annual index return is zero or positive, which means the value of the index remained the same or increased, you’ll receive a Declared Protection Strategy Credit (DPSC), which is the amount of potential annual return that may be credited in any given year, no more and no less. DPSCs are declared on the Index Effective Date, which is the first date your money has the opportunity to be allocated to an index option, and on each Index Anniversary thereafter.

Keep in mind that DPSCs and caps are subject to significant change annually on the Index Anniversary and will never be less than 0.50%. DPSCs and caps can be different between newly issued contracts and inforce contracts, and they can be different between inforce contracts issued on different days and in different years. DPSCs and caps can also be different for each index. Deduction of the annual product fee, income benefit rider fee, withdrawal charge, contract maintenance charge and, if applicable, the Maximum Anniversary Value Death Benefit rider fee may result in a loss of principal or previously earned DPSCs, or performance credits, and will not receive a DPSC or performance credit on the next Index Anniversary.

If the annual index return is negative, nothing is credited.

Once income payments begin, allocations are limited to the Index Protection Strategy with DPSC or cap.

Issue age and minimum

You must be between the ages of 0-80 in order to purchase Allianz Index Advantage Income Variable Annuity.

The minimum initial purchase payment is $5,000 for qualified and nonqualified contracts. Minimum subsequent purchase payment is $501,2,3 and maximum purchase payment is $1,000,000.

Rates

For more information on current caps, Precision Rates, buffers, floors, and DPSCs, please consult your financial professional or click on the link below.

View current rates for the Allianz Index Advantage Income Variable Annuity

Allocation options

You’ll need to work with your financial professional to design an investment portfolio that aligns with your long-term retirement goals.

Indexes available with the Index Performance Strategy, Index Guard Strategy, Index Precision Strategy, Index Protection Strategy with cap, and Index Protection Strategy with DPSC include:

S&P 500® Index
Russell 2000® Index
Nasdaq-100® Index
EURO STOXX 50®
iShares® MSCI Emerging Markets ETF

These unmanaged indexes are not intended to represent specific mutual funds. Individual results may vary according to transaction costs and taxes. Investors cannot invest directly in an index. Availability restrictions may apply to in-force contracts. Please refer to the prospectus for additional details.

Income or accumulation benefits

Beginning at age 45, Allianz Index Advantage Income Variable Annuity provides a guaranteed income percentage increase in each of your Lifetime Income Percentages for each year you wait before beginning income payments. When it’s time to start receiving income, the amount you receive is determined by your current contract value and one of two income payment options to suit your income needs. You can choose between Level Income (consistent, dependable income for life) or Increasing Income (guaranteed income for life – plus an opportunity for payment increases).4

The Income Benefit rider fee is 0.70% accrued daily and deducted on each quarterly contract anniversary, calculated as a percentage of the charge base. The Income Benefit is automatically included in the contract at issue and cannot be added to a contract after issue. The Income Benefit can be removed on any Index Anniversary after three years while the contract value is positive and before income payments begin. If the Income Benefit is removed, the rider fee is no longer assessed. The Income Benefit cannot be added back to a contract after it is removed.

Access your money

Your contract includes a six-year withdrawal charge schedule on each purchase payment. All withdrawals are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal additional tax. If you need access to your money, you can withdraw up to 10% of your purchase payments each contract year without a withdrawal charge. Any unused portion does not carry from one year to the next. On a full withdrawal, the free withdrawal privilege is not available and amounts previously withdrawn under the free withdrawal privilege may be subject to the withdrawal charge as described in the prospectus. All withdrawals are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal additional tax.

Payout options

You have several options for your annuity payout:

  • life
  • life with period certain
  • joint and last survivor
  • joint and last survivor with period certain
  • refund life

Standard contract features

  • Systematic withdrawals
  • Required minimum distribution program
  • Waiver of withdrawal charge benefit

Death benefit

You can choose between two death benefit options, both available only during the accumulation phase upon the first death of an owner named at issue. The Traditional Death Benefit is the greater of the contract value or total purchase payments, adjusted for withdrawals. The Maximum Anniversary Value Death Benefit available for issue age 0-75 (optional for an additional 0.20% rider fee, accrued daily and deducted on each quarterly contract anniversary, calculated as a percentage of the charge base) is the greater of contract value or Maximum Anniversary Value (highest contract value on any Index Anniversary prior to age 91 adjusted for subsequent purchase payments and withdrawals). Changing ownership on the contract can reduce or eliminate these death benefits.

Estimate your income potential

Now that you’ve seen how Index Advantage income works, use our calculator to estimate how much initial annual retirement income you could potentially create.

Explore your options

See how a specified combination of allocations to the index strategies can help you target the accumulation potential and level of protection that may be appropriate for you.
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Ready to take the next step?

Because annuities are complex products, Allianz Index Advantage Income is available exclusively through licensed financial professionals. Ask your financial professional if it may be a good fit as part of your overall portfolio.

Questions to consider

Talk to your registered representative to see if Allianz Index Advantage Income Variable Annuity is appropriate for you. Here are some questions they can help answer:

  1. Are your purchase payments protected?
  2. How can this product fit into my overall portfolio?
  3. Are there guarantees available with this product?
  4. What else should I consider that might impact my retirement?
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1 Purchase payments can only be allocated to index options on the Index Effective Date or an Index Anniversary. We annually limit additional purchase payments as described in the prospectus.

2 Allianz reserves the right to decline any or all purchase payments at any time on a nondiscriminatory basis.

3 Purchase payments will be placed in the AZL® Government Money Market Fund until the Index Effective Date or next Index Anniversary. At the Index Effective Date or Index Anniversary we will transfer the contract value in the AZL Government Money Market Fund to the applicable index options.

4 Assumes you don’t take more than the annual maximum income payment.


Owners could see a substantial loss during an index period if the index declines more than the level of downside protection. If an owner does see a substantial loss during an index period, the owner may not be able to participate fully in a subsequent market recovery due to the capped upside potential in subsequent index periods.

Investing in a variable annuity may be the answer for part of your overall retirement strategy. A variable annuity offers a unique combination of features, including market participation through a variety of investment options; tax-deferred growth opportunities; and optional protection benefits that can provide certain accumulation, income, and beneficiary guarantees for an additional cost.

Variable annuities are subject to investment risk, including loss of principal, and contract values fluctuate daily. Investment returns and principal value will fluctuate with market conditions so that units, upon distribution, may be worth more or less than the original cost.

Purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity’s features other than tax deferral. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan.

Withdrawals will reduce the contract value and the value of any protection benefits. Withdrawals taken within the contract withdrawal charge schedule will be subject to a withdrawal charge. All withdrawals are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal additional tax.

For more complete information about variable annuities and variable options, call your financial professional or Allianz Life Financial Services, LLC at 800.624.0197 for a prospectus. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about the variable annuity and variable options, which you should carefully consider. Please read the prospectuses thoroughly before sending money.

Guarantees are backed by the financial strength and claims-paying ability of the issuing company. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.

Standard & Poor’s 500® index (S&P 500®) is comprised of 500 stocks representing major U.S. industrial sectors.

S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”). This trademark has been licensed for use by S&P Dow Jones Indices LLC and its affiliates. S&P® and S&P 500® are trademarks of S&P. These trademarks have been sublicensed for certain purposes by Allianz Life Insurance Company of North America (“Allianz”). The S&P 500 is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Allianz. Allianz products are not sponsored, endorsed, sold, or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates make any representation regarding the advisability of investing in such product.

The Russell 2000® Index is an equity index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not affect the performance and characteristics of the true small-cap index.

The Russell 2000® Index (the “Index”) is a trademark of Frank Russell Company (“Russell”) and has been licensed for use by Allianz Life Insurance Company of North America (“Allianz”). Allianz products are not in any way sponsored, endorsed, sold or promoted by Russell or the London Stock Exchange Group companies (“LSEG”) (together the “Licensor Parties”) and none of the Licensor Parties make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the Index (upon which the Allianz product is based), (ii) the figure at which the Index is said to stand at any particular time on any particular day or otherwise, or (iii) the suitability of the Index for the purpose to which it is being put in connection with the Allianz product. None of the Licensor Parties have provided or will provide any financial or investment advice or recommendation in relation to the Index to Allianz or to its clients. The Index is calculated by Russell or its agent. None of the Licensor Parties shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Index or (b) under any obligation to advise any person of any error therein.

The Nasdaq-100 Index® includes 100 of the largest domestic and international non-financial securities listed on The NASDAQ Stock Market® based on market capitalization.

NASDAQ®, and Nasdaq-100 Index®, are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Allianz Life Insurance Company of North America. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

The EURO STOXX 50®, Europe's leading Blue-chip index for the Eurozone, provides a blue-chip representation of supersector leaders in the Eurozone. The index covers 50 stocks from 11 Eurozone countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

The EURO STOXX 50® is the intellectual property (including registered trademarks) of STOXX Limited, Zurich, Switzerland (“STOXX”), Deutsche Börse Group or their licensors, which is used under license. Allianz products are neither sponsored nor promoted, distributed or in any other manner supported by STOXX, Deutsche Börse Group or their licensors, research partners or data providers and STOXX, Deutsche Börse Group and their licensors, research partners or data providers do not give any warranty, and exclude any liability (whether in negligence or otherwise) with respect thereto generally or specifically in relation to any errors, omissions or interruptions in the EURO STOXX 50 or its data.

The iShares® MSCI Emerging Markets ETF is distributed by BlackRock Investments, LLC. iShares®, BLACKROCK®, and the corresponding logos are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. These trademarks have been licensed for certain purposes by Allianz Life Insurance Company of North America ("Allianz") and its wholly-owned subsidiaries. Products offered by Allianz or its wholly-owned subsidiaries are not sponsored, endorsed, sold or promoted by BlackRock, and purchasers of such products do not acquire any interest in the iShares® MSCI Emerging Markets ETF nor enter into any relationship of any kind with BlackRock. BlackRock makes no representations or warranties, express or implied, to the owners of any products offered by Allianz or its wholly-owned subsidiaries or any member of the public, regarding the advisability of purchasing a product from Allianz or its wholly-owned subsidiaries. BlackRock has no obligation or liability for any errors, omissions, interruptions or use of the iShares MSCI Emerging Markets ETF or any data related thereto, or with the operation, marketing, trading or sale of any products or services offered by Allianz and its wholly-owned subsidiaries.

• 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

Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN  55416-1297 and are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. (L40538-IAI)

Product and feature availability may vary by state and broker/dealer.