Allianz Benefit Control Annuity Review

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Allianz Benefit Control Annuity Review (ABC Annuity)

In this Allianz Benefit Control Annuity Review (ABC Annuity) we will cover:

  • Lifetime Income Rider Options
  • Income Multiplier Benefit for Long Term Care Needs
  • Product Specs
  • Crediting Methods and Indexes
  • Pros & Cons

Allianz Life Financial Ratings

Allianz LifeRating
5701 Golden Hills Dr., Minneapolis, MN 55416
A.M. Best RatingA+
Moody's (21 rankings)A1 (5)
Comdex (percentile of all rated companies)94
Standard & Poor's (20 Possible Ratings)AA (3)

Allianz Benefit Control Annuity is the most recent addition to Allianz Life’s portfolio of innovative and successful fixed index annuity products. Allianz Life has sold the most individual fixed index annuities in the United States for each of the last four years. While the Allianz 222 and Allianz Core Income 7 remain highly successful in their own right,  the new Allianz Benefit Control Annuity or Allianz ABC Annuity brings with it some new unique features.

The Allianz Benefit Control Annuity gives the policyholder the ability to begin income on any monthly contract anniversary after age 50, with no minimum waiting period, according to Allianz Life. This is much different in contrast to the best-selling 222 which makes the annuity owner wait 10 years prior to turning on lifetime income.

Two Lifetime Income Rider Options

While the client is accumulating assets, the client can choose between two options for how to grow the contract’s “protected income value,” or PIV:

  • The Accelerated PIV Rider
  • The Control Balanced PIV Rider

Let’s take a look at the differences between the two income options:

1. Accelerated Protected Income Value rider

  • 50% accumulation value interest factor.
  • The annual payment amount will increase following any years there is fixed and/or indexed interest credited and will receive the 250% interest bonus.
  • The Protected Income Value (PIV) can receive two bonuses, a premium bonus on any premiums in the first 18 months and a bonus of any earned fixed and/or indexed interest for as long as they own the contract.
  • Anytime after age 50, your client can access the Protected Income Value immediately or on any monthly anniversary by electing either single or joint lifetime withdrawals.
 

2. Balanced Protected Income Value rider

  • The Protected Income Value (PIV) can receive two bonuses, a premium bonus on any premiums in the first 18 months and an interest bonus of any earned fixed and/or indexed interest for as long as they own the contract.
  • Anytime after age 50, your client can access the Protected Income Value immediately or on any monthly anniversary by electing either single or joint lifetime withdrawals.
  • The annual payment amount will increase following any years there is fixed and/or indexed interest credited and will receive the 150% interest bonus.
The accelerated PIV option would be the best for someone is is certain they will be turning this annuity into a lifetime income stream while the balanced PIV option is best for someone who may not end-up using the annuity for lifetime income.
 

Allianz Income Multiplier (AIM) benefit

The AIM benefit allows you to double their annual maximum lifetime income withdrawal if confined to a qualifying nursing home, hospital, or assisted living facility for at least  90 days in a consecutive 120-day period, or if they are unable to perform at least two of the six activities of daily living (ADLs).

Allianz benefit control income multiplier benefit examples

Confinement must occur after the first contract year and either during the contract year before the start of lifetime income withdrawals or at any time thereafter.

Allianz Benefit Control Product Specifics

Issue age and minimum

The minimum initial premium payment is $20,000 for qualified and non-qualified money.

Index Lock

The index lock is a feature we have never see in a fixed index annuity.

This new index lock feature allows you to lock in an index value on those allocation options(s) one time at any point during a crediting period. The indexed interest credit will be applied at the end of the crediting period based on the locked index value. If you choose to lock in an index value, the beginning index value for your next crediting period will be the index value at the end of the previous crediting period (not the chosen locked-in index value).

 

Increasing Lifetime Income Payments

Once you start receiving lifetime withdrawals from your Protected Income Value, there is an opportunity to increase your lifetime withdrawals based on the interest rate credited to your allocations, including the interest bonus.

Allianz benefit control increasing income example

After you’ve owned your annuity for at least five years, you can double your annual maximum available for withdrawal with the Allianz Income Multiplier Benefit rider, if you qualify due to hospitalization or confinement in an eligible nursing home or assisted living facility or if you become unable to perform two of the six activities of daily living (ADLs).

Free Withdrawals:

In the contract year following the most recent premium payment, up to 10% of the contract’s premium paid, minus withdrawals, can be withdrawn each contract year without incurring withdrawal charges or market value adjustment or penalties; maximum is cash surrender value.

Surrender Charge Schedule:

 12345678910
 9.30%9.30%8.30%7.30%6.25%5.25%4.20%3.15%2.10%1.05%

 Death Benefit

Prior to annuitization, Allianz Benefit Control Annuity gives you two death benefit options. Your beneficiary can receive the greater of the accumulation value, guaranteed minimum value, or cumulative withdrawal amount as a lump sum (this option doesn’t include any premium or interest bonuses).

Or, they can receive the Protected Income Value – including the premium and interest bonuses – in payments over a minimum of five years, limited to 250% of the accumulation value (PIV death benefit limit can vary by state).

 

Available Indexes and Crediting Methods

  1. Monthly sum with a capS&P 500® IndexNasdaq-100® IndexRussell 2000® Index
  2. Annual point-to-point with a cap: S&P 500® Index, Nasdaq-100® Index, Russell 2000® Index, BlackRock iBLD Claria® Index, Bloomberg US Dynamic Balance Index II, PIMCO Tactical Balanced Index
  3. Annual point-to-point with a spread: BlackRock iBLD Claria® Index, Bloomberg US Dynamic Balance Index II, PIMCO Tactical Balanced Index
  4. Annual point-to-point with a participation rate: Bloomberg US Dynamic Balance II ER Index, PIMCO Tactical Balanced ER Index, BlackRock iBLD Claria® ER Index
  5. 2-year point-to-point with a participation rate: Bloomberg US Dynamic Balance II ER Index, PIMCO Tactical Balanced ER Index, BlackRock iBLD Claria® ER Index

A fixed interest allocation is also available.

Amounts allocated to annual point-to-point and 2-year point-to-point crediting methods are subject to an allocation charge that is deducted annually from the accumulation value and guaranteed minimum value. The current allocation charge percentage is 0.95%. If you are not very familiar with how the above strategies work you will likely benefit from reading Index Annuity Crediting Methods Explained.

Allianz Benefit Control Annuity Pros and Cons

ABC Annuity Pros

  • There is a lot of flexibility built into the contract with the ability to select between 2 income rider options.
  • Index Lock feature allows you to lock in your interest mid-year
  • The Income Multiplier Benefit doubles your income should you be confined to a facility or require in-home health care (based on restrictions)
  • Lots of available indexes and crediting methods
  • Increasing Income Potential even after the lifetime income feature has been turned on

 ABC Annuity Cons

  • The 4 different riders can make this product confusing
  • It has the potential for multiple fees
  • The cap, spread, and participation rates are not very competitive
  • The Accelerated income rider only credits your account value 50% of total interest earned – with the fees it would be almost impossible to even break even in my opinion.
  • If you choose the Balanced income rider option the income feature is watered down and not as good as benefits found elsewhere.
  

Allianz Benefit Control Annuity Review: Final Thoughts

I have not been able to come up with a scenario in which I would recommend this product. It has a lot of bells and whistles but so much so that it was confusing even to me. The vast amount of features come with many costs and fees.

Additional Reading

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Kiara Caudill

Kiara Caudill

I spent the first 10 years of my career as a clinical mental health therapist and I saw firsthand that finances play a large role in one’s happiness. A good financial plan is not only important to your financial health it’s also important to your mental health. I approach financial planning from a behavioral finance perspective using a goals-based approach. Kiara holds a B.A. Degree in Psychology from Goshen College and an M.A. in Clinical Mental Health Counseling from Valparaiso University.

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