Category: Fixed Index Annuity

Allianz Benefit Control Annuity Review

Allianz Benefit Control Annuity Review

In this review of the Allianz Benefit Control 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 Annuities logo Allianz 360 Annuity Rates Page
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 policy holder 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.

 

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 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.
 

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 client 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

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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 nonqualified 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(ies) 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 cap: S&P 500® Index, Nasdaq-100® Index, Russell 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

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.

A fixed interest allocation is also available.

 

Allianz Benefit Control Annuity Pros and Cons

Allianz Benefit Control Cons

  • There is a lot of flexibility with 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

Allianz Benefit Control 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.
  

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 Resources

Have a Specific Question?

This is an independent annuity product review, not a recommendation or solicitation to buy or sell an annuity.  Allianz Life has not endorsed this review in any fashion and we don’t receive any compensation it.  

Be sure to do your own due diligence, we recommend consulting with a properly licensed professional regarding any questions you may have. Values shown are not guaranteed unless specifically stated otherwise. 

Rates and annuity payout rates are subject to change. Actual values may be higher lower than the values shown. The illustration is not valid without all 18 pages and the statement of understanding.

Annuity Calculators: 3 Different Types

Annuity Calculators: Can You Trust Them

Annuity Calculators are certainly not all the same. If you are shoping for an annuity it is important to be clear on what your objective is for this potential annuity. There are many different types of annuities which can seem overhwhelming but it doesn’t have to.

Annuities get a reputation for being complicatied but in reality there are just a lot of options, features and types. When done correctly this can definitely play into your favor because odds are regardless of your goals and objectives there is probably an annuity that can be tailor made just for you.

 

Types of Annuity Calculators

There are many different types of annuity calculators just as there are many types of annuities. Some calculations from these “calculators” can be taken with a grain of salt while other’s output results that are contractual guarantees.

The type of calculation or calculator used depends on the type of annuity you are purchasing.

 

Hypothetical Back-Testing vs Annuity Calculator's

If you are considering a fixed index annuity the calculation you get may likely be a hypothetical back-test.

Many of the newer index annuities link to market indexes other than the S&P 500 and many of these indexes are brand new. 

As you saw above index annuity illustration go back 10 years. So how do you test the historical performance of an index that is brand new?

 A hypothetically back test gives you a hypothetical percent you would have earned had you purchased the annuity 10 years ago and the index performed the way they think it will.

Hypothetical Illustration:

A hypothetical illustration is when you look back and judge the performance of a particular index before it was actually created.

For example, let’s say you are considering purchasing an indexed annuity with a 70% participation tied to the MLSB (Merrill Lynch Strategic Balanced Index). While we can’t say for sure what 70% of the performance of that index will be 7 years from now, we can run a back test to see how it would have performed the last 7 years. This is because these volatility managed indexes do not have  a human component to them. The indexes are  basically just an algorithm that moves money between an equity component and a fixed component depending on the level of voracity.

Back-Testing

When shopping for a Variable Annuity it is likely you get a back test because with a variable annuity you are investing directly into the market. When you get a back test for a variable annuity all the calculator is doing is applying your fee, or any contract specifications, to the actually returns of your index.
This creates what we call a hypothetical. Most often, these hypotheticals will provide you with three potential rates of return:

  1. The best 10 year period
  2. The worst 10 year period
  3. The most recent 10 year period

This can be helpful because even though the worst ever 10 year period isn’t guaranteed to be the worst possible scenario, it gives you a good idea of the lower end. The same hold true for the best ever and most recent 10 year periods. Below is an example of one of these charts.

Baseball in dirt with Base - annuities can't hit a home run every time.

Annuity Calculators Final Thoughts

Annuity calculators are helpful tools to use when trying to get an idea of what rate of return range you might earn  but they are not meant to be used as a quote or taken for anything more than a rought idea of whay you might expect.

6-Step Retirement Planning Checklist to Get the Ball Rolling

Retirement Planning Checklist: 6 Bite Size Steps

Before you start your next big chapter of retirement, help make sure you are financially on track for the golden years you want. Like many important to do’s, breaking them down into a retirement planning checklist can make the exercise much easier to tackle. 

Plus, your sense of accomplishment from checking off each task can encourage you to stick to your mission. Here is a 6-step checklist to help get the ball rolling on retirement planning and determining what kind of budget you will need in the future.

#1. Make a retirement budget

Use these next few months to get a handle on your spending needs and wants so you can be prepared for the day the paychecks stop, says Dan White, firm founder and asset protection consultant of Dan White and Associates. Keep in mind the budget you create today will not be set in stone, as most people have a U-shaped financial retirement. 

That means they spend more in the earlier years, less in the middle years when the routine is in place, and more again in later years when health issues drive expenses back up. You can use our Retirement Income Planning Worksheet to help simplify this task of budgeting. It is a fillable PDF and will do the calculations for you.

Woman completing retirement planning checklist on graph paper with calculator, ipad with bar charts on screen and pie chart on paper

#2. Calculate your Social Security benefit

To look at your earnings and get an estimate of what you’ll get from Social Security, you can create a login at ssa.gov/myaccount. If you’re not sure when to start taking your benefits, you can also use the Social Security Administration’s Quick Calculator to determine how your benefit will change depending on how old you are when you sign up. It’s an important part of your retirement equation since the dollar amount can drop by about 30 percent if you take it before you reach full retirement age.

If you are married there are Social Security strategies for married couples to coordinate and maximize their Social Security Benefits.

#3. Calculate your pension payment

If you have a pension, you can talk to your human resources department or pension benefit manager to get an idea of what your monthly payout will be. If you are married, also ask if the pension provides a survivor benefit, and if your regular payment will be cut to provide that benefit.

#4. Balance your portfolio

If you are about to retire, your investments should likely be taking on a more defensive position, which means that they carry less risk. That way, you will protect your savings against any potential market downturns. Sequence of returns is the biggest risk for someone who’s just retired, or within a couple of years of it.

#5. Reset your insurance

Review your insurance contracts which may include homeowner’s insurance, life insurance, long-term care insurance, and car insurance to make sure you have the right level of coverage. If you need to cut expenses in retirement, you can raise the deductibles on certain policies. 

Review your options for health insurance too. Options to consider if you’re too young for Medicare are: going on your spouse’s policy, buying COBRA from your employer, taking advantage of a pension plan’s health benefit, or buying individual insurance on your state’s exchange or on healthcare.gov.

#6. Determine where you will live

Where you live, especially if you will still have a mortgage, is an important part of the retirement puzzle, says White. If your dream is to relocate, he suggests possibly renting in a location to see if you really like it first. Your plans should also address where you will live while you age. 

Will you want to age in your current location? What costs will be associated with that kind of care? Or will you move to a 55-and-up community? What about assisted living? These should all be factors in your future retirement budget.

If you are looking for ideas; check out this Forbes List, “Best Places to Retire in 2020.”

Simplify Your Path to a Financially Secure Retirement

By completing this 6-step retirement planning checklist you’ll gain a better understanding of your finances. Identifying your sources of retirement income and thinking about the life of your future self can be a motivating factor nudging you to create a strategy that helps checks all the boxes toward gaining the financial security you seek in retirement.

At after completing your retirement planning checklist you realize you are not quite on track you’ll have to work longer, spend less or make more.  The sooner you get the ball-rolling the better!

Athene Performance Elite 7 Review

Athene Performance Elite 7 Review

Independent, Unbiased and Transparent

In this Athene Performance Elite 7 Review we will cover:

  • Athene’s Financial Rating
  • Type of Annuity
  • Crediting Options
  • Athene Performance Elite Rates
  • Reasonable Rate of Return Expectations
  • “Charge” Strategy
  • Pros and Cons
  • Final Thoughts

The Athene Performance Elite 7 is a 7 year fixed index annuity. Whenever we are reviewing an annuity or assisting our clients in the annuity shopping process the financial rating of the Issuing Insurance company is always on of the very first things we consider.

In this case we feel very confident in the financial strength of Athene and will judge this annuity purely on it’s own merit.

Athene Financial RatingsRating
7700 Mills Civic Parkway, West Des Moines, IA 50266
A.M. Best Rating (15 possible ratings)A (3)
Fitch Ratings (21 possible)A (6)
Comdex (percentile of all rating companies)78
Standard & Poor's (20 possible ratings)A (6)

As you saw in the table above table Athene is rated an A by AM Best, Fitch and Standard and Poor’s which definitely puts them in the solid category in my book. 

In addition to considering the financial strength of a prospective insurance company I also give a lot of merit to how committed an insurance company is to the annuity market space when considering one of their products. I prefer to work with insurance companies who have a long, well established track record in the annuity business.

 2019 Rank2018 Rank2017 Rank2016 Rank
Allianz1111
Athene2223
AIG3445
Nationwide4337
American Equity5662

As you can see the in the above table Athene was number two three out of the last four years in total U.S. Fixed Indexed Annuity sales and they were number four the other year. With that being said we are very comfortable with Athene as a product manufacturer. So… With out further ado let’s jump in and review the Athene Performance Elite 7.

Athene Performance Elite 7 Reviewed

As we start to dive in I’d like to mention that this annuity review is simply that, an independent review. It is not a recommendation to purchase this annuity and this review has not been endorsed by Athene, nor are we being compensated or affiliated with them in any way. 

The Athene Performance Elite 7 is a fixed indexed annuity with a 7 year contract term. One of the things we really like about the Performance Elite right off of the bat is that it has 5 different market indexes available. What is even better than the 5 available indexes is the fact that four of them have “Un-Capped Crediting Methods” options.

The four market indexes with uncapped crediting options are:

In addition to the uncapped strategies they also offer the S&P 500 annual-point-to point strategy with a cap and a declared rate strategy that is paying 1.50% for the first year.

Athene Performance Elite 7 Rates

After researching the available indexes,  and running hypothetical back tests for all of the caps, and participation rates for all 5 indexing strategies my two favorite indexing option are the Nasdaq FC Index and AiPex index with a participation rate. Here are very brief summaries of these two indexes:

The Nasdaq Fast Convergence Index is designed with the goal of improving participation rates in an index-linked product. By systematically monitoring market moves and rebalancing throughout the trading day, FC technology aims to more efficiently control the realized volatility of an index.

The AiPex Index is the first ever U.S. Equity Index Powered by artificial intelligence and uses the IBM Watson Brain. It scores the 1000 largest companies by analyzing millions of pieces of information per day to select the best 250 stocks.

Performance Elite 7 Reasonable Rate of Return Expectations

Let’s take a look at the historical rate of returns for these two indexing options. Again, hypothetical illustrations are not a guaranteed ran a hypothetical using both of these indexes and here are the average annual returns for the best, worst and most recent 10 year period. These rate of returns assume 50% allocated to the AiPex Performance Index and 50% allocated to the Nasdac FC Index using the annual point to point with participation rate strategy (rates as of 10.11.2020). 

As you can see in the tables below the average annual interest rate credited would have been:

  • 5.23% for the Most Recent 10 Year Period
  • 5.71% for the Highest 10 Year Period
  • 3.99% for the Lowest 10 Year Period
Athene Performance Elite 7 Review table showing hypothetical returns

I also back tested these two options separately to see how these strategies performed individually. The  Nasdaq FC index would have performance at an average annual rate of 5.68% over the last 10 years. The AiPex, the first ever A.I powered US Equity index showed an average annual rate of 4.78% over the same most recent 10 year period.

Nasdaq FC:

  • Worst – 3.86%
  • Best – 5.82%
  • Most Recent – 5.67%

AiPex:

  • Worst – 4.12%
  • Best – 5.60%
  • Most Recent – 4.78%
 

If you are considering an Athene Performance Elite for part of your retirement portfolio we’d love an opportunity to assist you in any way that we I can. To see a hypothetical back test using today’s rate rates and the index strategies you’d prefer you can call, email or message us through our contact page and we’d be happy to put that together for you.

Performance Elite "Charge" Rate Strategy

The “with charge” crediting options are most likely the more unique feature of the Performance Elite. It is an additional rider that you can purchase that increases your annual cap or participation and reduces  your spread.

The 95 basis point fee equals $950 annually on a $100,000 account value. For this fee the participation rate on the Nasdaq FC Index increases to 105% and to 130% for the AiPex Performance Index.

The table below lists the most recent, lowest and highest 10 year average rate of returns assuming we placed 50% in Nasdaq FC and 50% in AiPex just as before.

  • Most Recent 10 Year Period – 9.23% Average
  • Highest 10 Year Period – 10.22% Average
  • Lowest 10 Year Period – 7.08% Average
Athene Performance elite 7 Hypothetical returns for Nasdaq FC and AiPexwith Charge

Pros and Cons of Athene Performance Elite 7

Performance Elite Pros:

  • 5 Different Indexes to choose from
  • Uncapped crediting options available on 4 of the indexes
  • Annual point to point and two year point to point options available for diversification
  • Innovative AiPex and Nasdaq FC Indexes
  • Highly Rated and Experienced Issuing Company (Athene)
  • Unique “with charge” option that allows you to purchase higher participation rates
  • Above average Hypothetical Historical Rate of Returns

Performance Elite Cons:

  • More complicated and obscure indexes and crediting strategies may seem confusing to clients and advisors alike which may hinder some from considering it.

Athene Performance Elite 7 Review: Final Thoughts

The Performance Elite 7 Year Fixed Index Annuity is as good as any we’ve reviewed in quite some time. I really, really like the market indexes that are available inside of this annuity. Three of which are proprietary to Athene and not available in any other product. The variety of indexes and crediting methods are also a big positive.

I like the ability to purchase a higher participation rate for a fee; that is something we have not seen on any other indexed annuities.

The historical rates of return are superior to almost all other indexed annuities in today’s interest rate environment. If your objective is safe accumulation I say the Performance Elite 7 definitely warrants consideration as part of your fixed income portfolio.

Read more Annuity Reviews

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Have a specific Question?

This is an independent annuity product review , not a recommendation or solicitation to buy or sell an annuity.  Athene has not endorsed this review in any fashion and we don’t receive any compensation it.  

Be sure to do your own due diligence, we recommend consulting with a properly licensed professional regarding any questions you may have. Values shown are not guaranteed unless specifically stated otherwise. 

Rates and annuity payout rates are subject to change. Actual values may be higher lower than the values shown. The illustration is not valid without all 18 pages and the statement of understanding.

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