Fixed indexed annuities have been increasing in popularity over the past few years for their multiple benefits; now there is a new indexed variable annuity on the market. Allianz Life Insurance Company of North America introduced an indexed variable annuity last week that offers four key benefits that will help you finance your future. This information comes from the Fort Mill Times article “Allianz Life Launches New Indexed Variable Annuity.” The balanced benefits offered with the Allianz Index Advantage are the potential for growth, tax deferral, protection of your money, and death benefits. The company is taking their knowledge of and presence in the fixed indexed annuity market and mixing in some variable annuity options for consumers looking for variable products.
Allianz Life says that the Index Advantage will be the right product for a consumer who wants more downside market protection and is willing to give up a portion of their potential gains to get that protection. People who are trying to accumulate wealth for retirement, but have a conservative mindset, are in a dilemma with the low interest rates in today’s economic environment. Their choices were to keep their money out of the markets for fear of losing or take on more risk than they are comfortable with until now. The growth potential and protection offered from these annuities gives consumers a different approach to financing their retirement.
Traditional variable annuities with Guaranteed Minimum Accumulation Benefits usually have waiting periods around ten years. Allianz’s Index Advantage starts your protection immediately. The main difference between the indexed variable annuity and the fixed indexed annuity is that you have higher caps on your interest credit from the equity index with the variable version. To get that increased growth potential, you are protected against 10% of your losses each year with an indexed variable annuity compared with full protection in a fixed indexed annuity. This is a big change for accumulation choices with variable annuity products. You can opt to have less growth potential and more protection in your indexed variable annuity; you just have to find the combination that works for you.
This particular indexed variable annuity is different from current offerings because it also includes death benefits along with the tax deferral advantages. The Allianz Index Advantage gives clients flexibility through an Index Performance Strategy and an Index Protection Strategy. There are three different indexes to choose from and a combination strategy is allowed. You can adjust your allocations on the anniversary date of the annuity contract. There are also three variable options, which allow transfers every sixth anniversary if you so wish. Currently the fees are 1.25% and the product has a six year withdrawal charge schedule. Additional details on the charges, caps, and crediting protection can be found in the original article. Allianz’s Index Advantage offers flexibility for consumers to find the combination of risk tolerance and accumulation goals that will meet their retirement savings needs.
Written by Rachel Summit