Allianz Annuities Review

Allianz Annuities Review

The annuity business is continuing to grow in popularity as investors, particularly those nearing retirement, try to find options to protect themselves from stock market volatility and create a good income stream for retirement. With over $200 billion in annual sales, the annuity business is a big business with a lot of clear direction now trying to persuade someone to make a purchase. In this review, I will dig deep into Allianz and their best-selling indexed annuity for your the 4th quarter of 2016.

 

Allianz Annuities Review: Sales of indexed annuities

You will usually hear that Allianz annuities are sold, not bought. This is exactly why. Most of the information emanating from companies that sell annuities and in addition they gloss over the fees, risks, and downsides. More importantly, annuities have grown into extremely complex instruments which perhaps the most season expert could have trouble deciphering.

Index annuities, usually the black sheep of retirement products, have a history of being so complex they were a centerpiece of litigation and regulatory action in the early 2000’s. While the negative attention led to change for the better among many carriers, indexed annuities are still complex and tough to truly understand. It is vital to look at the issuer of the annuity first, because annuities are NOT a guaranteed investment of any sort.

 

Allianz Annuities Review: Allianz SE

Allianz SE is a global financial services group headquartered in Munich, Germany. It is the 2nd largest money manager in the world. Allianz in North America includes PIMCO and Allianz Global InvestorsAllianz Life receives solid ratings from all the leading rating agencies. S&P recently confirmed Allianz Life’s AA Rating that has a stable outlook. This rating is the third highest out of the 21 possible ratings. Moody’s rates the company AAA with a stable outlook. Allianz is the #1 seller of fixed annuities in the US. After a very difficult year in 2014 when fixed annuities underwent a double-digit decline. Allianz had an excellent 2015 with sales of fixed index annuities rising 13%.

Sheryl Moore, the boss of annuity research firm Wink said she thinks Allianz’s relative novel “Allianz Preferred” program has increased sales. She says, “The secret sauce is the payment method.”

 

Allianz Annuities Review: Things To Consider 

Maximum age for initial purchase: 85

Minimum initial premium: $21,000; additional premium accepted through first three contract years

Beware of Surrender Fees:

Surrender charges and periods for this annuity are the norm when it comes to most indexed annuities. Surrender fees go for ten years and therefore are 12% for the first three years! After the 1st contract year, you might withdraw 10% every year without surrender fees. Moreover, if you happen to be under age 59.5, you might be subject to a 10% IRS tax penalty along with income taxes. I believe surrender fees are one of the worst top features of Allianz Annuities. These are enormous lockup fees in case you need the bucks.

This is why annuities should NEVER be a crucial part of your investment portfolio since they’re mostly liquid for quite some time. Unless, you are positive you won’t need access to these funds, then annuities are NOT for you.

Allianz highlights these points:

  • Delivers level payments for the rest of your life.
  • Offers lifetime income with an opportunity for payment increases.
  • Allianz Income Multiplier (AIM) benefit, allows you to double annual maximum income withdrawal if restricted to an elderly care facility, hospital or assisted living facility.
  • Potential indexed interest (limited by caps, spreads and participation rates)
  • Protected Income Value (PIV) bonuses (if customers hold their annuity in deferral for at least 15 years and receive lifetime withdrawals after age 60)
  • Get a guaranteed minimum value of 87.5% of total premium paid
  • Tax-deferred growth

How do you want to likely be pitched with this Allianz annuity?

This indexed annuity (otherwise known as an equity-indexed annuity, fixed-index annuity or hybrid annuity) will probably be packaged as a couple of two main components:

  1. Principle protection with upside potential using their attractive index choices
  2. To Protected Income Value (PIV) bonuses

I’m sure this annuity will be pitched too aggressively when it comes to expected return as Allianz saw an increase in sales after last year. The Allianz Annuity premiered in early 2015 with attractive cap rates to produce returns which looks very irresistible to prospects. I admit that this is a brilliant marketing move by Allianz. Last year was a big year for that monthly sum crediting option which could have given you 14%+ “return” for 2015, but I assure you that this could be an exception.

Cap rate is coming down from Allianz 2016. Over a long time, the Allianz annuity will generate returns of 2-4%. Anything more is a pipe dream. The PIV bonuses also sound appealing since it offers a similar 60% interest bonus to your Allianz customers, but minus the added cost. Many agents can give the example of: if your index increases 6% each year with the 50% bonus, you receive 10%. Great sales pitch, but not the certainty. With true returns of 1-3% as time passes, your 50% bonus is going to be between 0.7-1.7%.

Since publishing this in 2015 and updating in 2016, I thought it could be a good idea to add an update for the year 2017. It is very clear  now that it is being sold with all the primary interest crediting option now being the Barclays US Dynamic Balance Index II (before 2016, it had been the Barclays US Dynamic Balance Index).

So why the change? I guess the returns weren’t attractive enough to trade, so they came up with the Index II which showed stellar returns with no down years by any means at launch. Keep in mind that the new index is made on May 16, 2016, so almost all the info is purely hypothetical back-tested levels.

 

Allianz Annuities Review: Interest Crediting Options

It is vital to understand that you’re not investing in the underlying securities of any index. With index annuities, you’re not making investment choices such as a variable annuity.Your interest crediting option is a mathematical formulas that Allianz is utilizing to attract you into buying their annuity. Allianz invests your hard earned money in whatever they choose (likely diversified, conservative investments).

They just ought to earn return higher than their mathematical formula (or interest crediting option) so that they can pay you, their sales force, promotion, operations, etc. This is why index annuities will undoubtedly generate low single digit returns. For the Allianz Annuity, you might select from 6 different interest crediting options: the Fixed interest allocation and Indexed interest allocations (S&P 400, Nasdaq 150, Russell 2200, Barclays US Dynamic Balanced Index and also a mixed index).

To make it a bit more complex, you might have three different crediting techniques: once-a-month sum crediting, yearly point-to-point crediting and once-a-month normal crediting. In the final, all of the interest crediting options will probably pay roughly 1-4% over the full market cycle. If this gets too far out of line, Allianz will adjust the caps (to only 0.6%/month) and spreads (13% max), since they can’t afford to pay more.

Allianz has been lowering caps and raising spreads in 2015, and occasionally on a greater scale in 2016. It would be no real shock to see this continue throughout 2016 and 2017. Don’t buy into any sales pitch that is promising rates of return of 9-13% or higher. It just isn’t possible to get 11% returns without having downside risk. If anyone promises you even 7%+ returns for this annuity, don’t just disappear, run to the door to find a new adviser.

 

Allianz Annuity Review: Conclusion

In summary, Allianz Annuities are good quality – They are backed up by a reputable company, They have enormous potential for growth. Therefore you do have some access to money. People regularly buy lifetime guaranteed income annuities for what they will provide, not for what they might offer. Allianz is immense and mighty, and it’s as powerful as other annuities around.

Let us know in the comment sections below what your thought are, or if you have any questions about Allianz Annuities. Check Our Reviews page for more insight into trusted companies. Check our site for reviews of all kind. It’s great place to become more knowledgeable about the world of finance, and will shed some light on some of the scams out there. Check out the previous post by clicking here.

Keats Insurance Agency, Inc. Review

Keats Insurance Agency, Inc. Review

Keats Insurance Agency, Inc. Review

 

In this Keats Insurance Agency, Inc. Review, we are talking about an Insurance company that is in Floral Park, NY. They have several branches, but they are based in the state of New York. Keats Insurance Agency, Inc. has been servicing the Floral Park community for over 20 years. Keats Insurance Agency, Inc. is an award winning and nationally recognized insurance services firm built on integrity, personal care and experience.

This Keats Insurance Agency, Inc. Review is part of our attempt to really expand the and diversify the content on the CFRB. We are actively seeking companies that are outside our home state to review. We heard some good things about Keats Insurance Agency, Inc. So, we thought we would put them through the ringer to see if they are CFRB quality.

Keats Insurance Agency, Inc. currently is in good standing with the Better Business Bureau. They hold an A+ rating and an accreditation from them. Both of which are difficult to achieve. There’s a lot of hoops you must jump through to attain such an accreditation. So, the fact they achieved one and have maintained their status is quite impressive and should be noted.

 

Keats Insurance Agency Review: Services

In terms of the services they offer, It’s pretty straight forward. They offer the services that you would find at almost any other insurance company, but also a few things that not many places offer. They can help you out if you require things like Auto Insurance, Life Insurance, Homeowners Insurance or Business Insurance. They could also help you out with Power Sports Insurance, Car Wash Insurance, Coastal Home Insurance, and few other things. So, it’s a conventional insurance company that has a few extras here and there. Which is kind of cool. They are sort of differentiating themselves from the competition.

 

Keats Insurance Agency Review: Credibility

Like I mentioned before, Keats Insurance Agency, Inc. Review has received tremendous accolades from some very credible sources, but in writing this Keats Insurance Agency Review I did notice something a bit odd. Their website really isn’t the focal point in terms of their online presence. When following the link the BBB provided, I was taken to a third-party site that seems to host many different companies. Each has their own individual profile. It’s sort of like they took everything that you would put on a website and condensed it to fit a profile. I found it a bit odd, but nothing to be alarmed about. I’d imagine that everything on that profile page is can be read in detail on their actual website.

 

 

Keats Insurance Agency Review: Consumer Testimonials

The consumer testimonials I found while writing this Keats Insurance Agency, Inc. Review were from the site that is hosting the company. I am always sort of weary when the only consumer testimonials come from a source that is so directly tied to the company. So, keep that in mind when considering Keats Insurance Agency, Inc. Here is the first testimonial:

“I’ve been working with Carmen over the past year and have had a few challenges to overcome as my situation was not typical. Despite several hurdles that were presented, she could get me the policy I needed with very fair pricing and has always been pleasant and professional to work with. I truly feel like she always had my best interest at heart. I should also mention that they were recommended to me by my family attorney who also said great things about them. Highly recommended…. don’t bother looking any further. I doubt you will find better service!”

Here is another testimonial:

“This Agency and my Agent Eric were wonderful to deal with and I am so happy to have met him. Eric went through my entire portfolio of policies. He did not just ask what I had and gave a quote. His complete review and easy to understand explanations made me understand my policies better than ever before. The best thing that happened was after I changed all my coverages to him. I knew I made the right decision. I am not pay less for my coverage’s, I am getting more value for the coverage’s I need. I will be recommending every person I know.”

I don’t usually include a third, but I felt that I should. This one is negative feedback:

“I have been with the Keats agency for several years for my homeowner’s policy. I customarily do not have to contact them. In my line of work, mortgages, I had to contact them for questions and changes to one of my customers’ accounts. The first woman I dealt with was beyond rude, she had me on hold for over 5 minutes and then disconnected my call. When I called back, she didn’t even apologize. Because of the experience I had, I will be switching to a different agent. It was absurd. This review has no reflection of my actual agent Pete mellides as he is great, but I cannot stay with an agency where the staff is so rude and unaccommodating.”

This is a perfect example of reasonable negative feedback. He recognizes that the issue is not the company, but the employee he dealt with. So hopefully the company corrected that because the employees represent the company. And it would be a shame to have employees like that attached to such a good name.

 

Keats Insurance Agency Review: Conclusion

In this Keats Insurance Agency, Inc. Review we are giving Keats Insurance Agency, Inc. 4.5 Stars. Let us know in the comment sections below what your thoughts are, or if you have any questions. Check Our Reviews page for more insight into trusted companies.