Frequently Asked Questions (FAQ)

General life insurance

The purpose of life insurance and why you may need coverage

Indexed universal life insurance

The basics of this type of policy and how accumulation potential works

Applying for life insurance

How to purchase, the application process, and things to consider

General life insurance questions

How do I know if I need life insurance?

The main purpose of life insurance is to provide a financial benefit to your loved ones when you pass away, through the death benefit that is generally paid income-tax-free to your beneficiaries. But it can also be used to leave a legacy for a charity, school, or religious or community organization you wish to support. And for small-business owners, life insurance can play a role in employee retention and transfer of ownership of the business.

Do I need life insurance if I don’t have dependents or a partner?

Even if you don't have dependents or a partner, life insurance can still provide benefits down the road. In the event that you have unsettled debt at the time of your death, the death benefit from life insurance could help pay that down and help your loved ones cover final expenses. Some types of life insurance, such as indexed universal life (IUL), can also provide you access to available funds in your policy via loans or withdrawals;¹ this can help with unexpected expenses or supplement retirement income.

What if I already have a policy through work?

Many employers offer term life insurance as a benefit. But as the name suggests, term policies cover you only for a specified period of time. This generally means that if you leave your job, your life insurance coverage ends. Purchasing your own permanent life insurance policy (such as IUL) can help provide financial reassurance over the long term, even if you switch jobs.

How much life insurance do I need?

The short answer: It depends on a lot of factors. Your financial professional can help you assess your needs – both today and into the future. To make a quick estimate, try our easy life insurance calculator.

Indexed universal life insurance questions

What is indexed universal life (IUL) insurance?

IUL is a type of life insurance that offers a unique combination of benefits to assist you throughout your life, including:

A death benefit that’s generally income-tax-free to beneficiaries
Tax-deferred accumulation potential as well as other tax advantages
Flexibility in premium payments (as long as your payments are sufficient to keep the policy in force)
Opportunity to access available cash value with loans and withdrawals¹

How does an IUL insurance policy build accumulation potential?

Your policy’s accumulation value can increase through indexed interest, fixed interest, or a combination of both.

What is indexed interest?

Simply put, it’s interest your policy earns based on positive changes in an external market index (such as the S&P 500® Index). You can choose one or more indexed allocations, which are a combination of an index and its associated method of determining how interest is credited.

We track the performance of your index allocation(s). If the return is positive, you earn indexed interest based on that indexed allocation’s crediting method. If the return is negative, you don’t receive indexed interest – but you don’t lose value, either. Because you’re not actually participating in the market or buying shares in any index, your principal is never reduced due to market downturns (although certain fees and expenses will reduce policy values).

Over time, indexed interest can increase the “cash value” of your policy – the amount of money you can access via policy loans and withdrawals.¹

What does a crediting method include?

Each crediting method will include either a participation rate – that’s the percentage of the index’s return that you’ll receive – or a cap, which is the maximum amount of interest you can receive in one crediting period.

What is fixed interest?

You also have the option of allocating all or part of your policy’s accumulation value to earn fixed interest. Your policy is credited daily at one consistent interest rate that we establish at the beginning of the contract year. That rate doesn’t change, no matter what happens in the market during that year.

What allocation options should I consider?

Because no single allocation or crediting method performs best in all situations, your financial professional can help you determine which combination may fit your financial goals. For general educational information, try our Allocation Insights Tool.

What are my options for accessing the cash value of my policy?

You can access any available cash value in your policy via a loan that is income-tax-free. The amount of your loan can be credited with annual interest that can potentially offset the cost of the loan. You can also take withdrawals (partial surrenders) which will reduce your policy values, including the death benefit, and may be subject to a $50 charge. Or you can request a full surrender at any time; however, a surrender charge will apply if requested in the first 12 policy years.

Remember that when accessing policy loans and withdrawals,¹ you should consider that the available cash value and death benefit will be reduced accordingly and that the loans may be taxable if the policy lapses or is surrendered. You should consider the potential tax implications of taking policy loans and withdrawals and discuss them with your tax professional.

Applying for life insurance

What is underwriting?

Underwriting is the process of gathering information about you and using it to help determine both the level of risk in insuring you and the amount of your insurance premium.

How do I purchase an indexed universal life insurance policy from Allianz?

Allianz Life Accumulator™ is available exclusively through financial professionals. Contact your financial professional to find out if it may be appropriate for your individual situation.

Talk to your financial professional to see if Allianz Life Accumulator™ Indexed Universal Life Insurance Policy is right for you

Here are some questions you should consider:

Do you have loved ones who will need financial support if you pass away prematurely?

Do you hope to leave a legacy to family members or a charitable organization?

Would you like the potential to build a source of available funds for future needs?

Are you interested in the opportunity for additional tax advantages?

¹Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

Indexed universal life insurance policies require qualification through health and financial underwriting.

The death benefit is generally income-tax-free when passed on to beneficiaries.

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

Allianz Life Insurance Company of North America does not provide financial planning services.

Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.

Products are issued by Allianz Life Insurance Company of North America, PO Box 59060, Minneapolis, MN 55459-0060. (P64339)

This content does not apply in the state of New York.

Frequently Asked Questions (FAQ)

Here are some questions you should consider:

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