Allianz 360 Fixed Indexed Annuity Review
byNikhil Bhauwala
Fri Mar 08 2024
Introduction
Fixed Index Annuities are contracts between the annuitant and an insurance company in which the insurance company promises to credit interest based on the performance of a certain stock market index. Fixed Index Annuities have an inbuilt capital protection feature, so your principal will remain safe even if the index goes down.
Annuities are complex products, and many advisors try to missell them without properly understanding the buyer’s needs. Thus, you must educate yourself on these products and not solely depend upon the annuity agent’s high-pressure sales pitch.
This article discusses an in-depth review of the Allianz 360 Fixed Indexed Annuity. Allianz 360 is a deferred, fixed-indexed annuity that may be a suitable option if you are looking for lifetime income benefit, the safety of principal, a premium bonus, and enhanced withdrawal options. After extensive research and due diligence, I have provided an in-depth and unbiased analysis of this plan.
The review of the Allianz 360 Fixed Indexed Annuity will be broken into multiple subcategories:
- Product Description
- Rates and Costs Associated with the Allianz 360 Fixed Indexed Annuity
- Riders
- What Makes This Product Stand Out?
- What I Don’t Like
- Company Details
- Conclusion
Product Description - Allianz 360 Fixed Indexed Annuity
The Allianz 360 is a Fixed Indexed Annuity (FIA) plan that offers the annuitant (annuity investor) an opportunity to earn a market index-linked return without having to incur the risk of market downside. This is a suitable plan for people who are approaching retirement and aim to grow and protect their retirement savings. This plan is also suitable for people who are looking for a premium bonus, enhanced guaranteed lifetime income, or plan to leave a legacy for their loved ones, in addition to protecting and growing their retirement savings.
Let’s have a look at the high-level fine print of Allianz 360 Fixed Indexed Annuity, and then we will discuss each point in detail.
| Product Name | Allianz 360 |
|---|---|
| Issuing Company | Allianz Life Insurance Company |
| AM Best Rating | A+ (1st of 13 ratings) |
| Withdrawal Charge Period(s) | 10 years |
| Maximum Issue Age | 80 Years |
| Minimum Initial Purchase Amount | $20,000 |
| Surrender Charge Schedule | 10-year: 10.00%, 10.00%, 10.00%, 8.75%, 7.50%, 6.25%, 5.00%, 3.75%, 2.50%, 1.25%, 0% |
| Crediting Period and Strategies | 1-year, 2-year, 5-year point-to-point with participation rate, caps, or spread; monthly-sum with cap, or 1-year fixed with interest rate guaranteed. |
| Plan Types | IRA, Roth IRA, Nonqualified Account, SEP IRA, SIMPLE IRA, 401(a) |
| Indexes | S&P 500 Index, BlackRock iBLD Claria Index, Bloomberg US Dynamic Balance Index II, PIMCO Tactical Balanced Index |
| Free Withdrawals | 10% of the annuity’s Accumulated Value; per year |
| RMD Friendly | Yes |
| Death Benefit | Upon the annuitant’s death, the beneficiary can either choose from (i) Accumulated Value (Lumpsum) or (ii) Annual Payments (with premium and interest bonus) |
| Riders | Paid Rider - 360 Benefit - Enhanced Income Benefit and Withdrawal Rider |
| Surrender Value | Greater of Accumulated Value (less any withdrawal charges/MVA) and the Minimum Guaranteed Contract Value |
How does the Allianz 360 Fixed Indexed Annuity policy work?
Any annuitant (maximum age at the time of policy issue: 80) can purchase the Allianz 360 Fixed Indexed Annuity with a minimum initial purchase amount of $20,000, and in return, he will earn market index interest credits (calculated through a formula that we will discuss shortly), credited as per the chosen crediting period. Apart from the regular crediting period, various events may trigger earnings credit: On free withdrawals, for a long-term care event or terminal illness or injury event, or when a death benefit is payable.
As soon as the annuitant makes a premium payment, an “Accumulation Account” is created, equal to your total premium paid plus 125% of any interest earned from your chosen allocations, less withdrawals, charges for any optional riders you select, any applicable allocation charges and surrender charges, and adjusted by any Market Value Adjustments (MVAs).
In most other annuities, there is no interest multiplier (like 125% in this annuity); however, it should be noted that, in reality, it might not turn out as good as it sounds:
360 Benefit Rider: This is a paid rider that you need to take with this annuity for a 125% interest credit. The cost of this rider in the first year is 1.3%. After the first contract year, the annual benefit can change (although it will never be greater than 3%).
Now, this 1.3% and 125% is not as straightforward as it seems. This 1.3% is deducted from your contract’s accumulated value, while the 125% is calculated on interest credits.
Let’s take an example - Suppose your accumulated value in Year 1 is $100,000. During the first year, your index strategy earned an interest of 5%. During the second year: 7%, third year: 0%; and fourth year: 6%. Let’s see how this turns out.