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.

Signature One Financial Review Founder

Signature One Financial Review Founder

Signature One Financial Review, Inside look

Signature One Financial Review 5 Star Rating

Signature One Financial Review

In this Signature One Financial Review, we take an inside look at Signature One Financial and its founder Charles Reid. In other Signature One Financial Reviews, we looked at the business model of Signature One Financial as well as several Signature One Financial client testimonials. In today’s Signature One Financial Review we want to get a feel for what sparks the passion for what they do and motivates Signature One Financial to go out of there way to serve the consumer with the services they provide.

Signature One Financial Review, Understanding Why

Many times, to get a clear understanding of what makes up the inner workings of a company you must understand why the founder or founders of that company started the business in the first place. The goal of this Signature One Financial Review is to do just that. By looking into why Signature One Financials founder Charles Reid got into this industry and started Signature One Financial we hope to provide an in-depth review of the inner workings of Signature One Financial to provide you with a better understanding of why Signature One Financial does what they do and how Signature One Financial has received a CFRB 5 star in all their Signature One Financial Reviews.

Signature One Financials, Charles Reid

Let’s look at Signature One Financials founder Charles Reid as the focus of this Signature One Financial Review. Straight out of college Charles Reid experienced success in the financial services industry, quickly moving up the ladder to executive management, Charles purchased his first home at the age of 27 in a beautiful gated community in Southern Ca. Charles personal financial advice came from the industries top advisors and was reviewed semiannually to assure Charles that he was ready for the future to come. By age 33 Charles married his sweetheart and soon after they received great news, she was pregnant with their 1st child.

Signature One Financial Birthed Out of Personal Trials

In this Signature One Financial Review, we look at the tragedy experienced by Charles Reid after fighting a medical battle for their first born that ended in their child’s passing. During this period Charles spent all their savings and incurred $60,000.00+ in credit card debt and just over $200,000.00 on a HELOC attached to their home. Charles had not been able to work during their fight for their child, life and with all their savings depleted and their credit maxed out Charles had to come up with some creative ideas in order to keep his head above water financially. I think you can start to see why we felt this Signature One Financial Review was so important. You see Charles was buried in debt with little to no income but with his understanding of finances and his creative drive he was able to get out from under the burden of debt and save their home.  Charles new found motivation to help consumers burdened with debt and sometimes in seemingly impossible financial situations is what birthed Signature One Financial, a full services financial firm helping people navigate through the sometimes turbulent waters of financial management. This Signature One Financial Review is meant to shed some light on Charles Reid the founder of Signature One Financial and how his passion was created to help consumers by reviewing their finances and identifying any areas that could improve their current financial situation.

An Introduction to The Founder of Signature One Financial

We have added this short YouTube video to put a face to this Signature One Financial Review.

 

Signature One Financial Review Solutions

In this Signature One Financial Review, we want to look at some of the different financial services provided through Signature One Financial and how Signature One Financials creativity and dedication sparked by Charles’s experience have created solutions for the American consumer.

  • Personal Unsecured Loans. Signature One Financial helps consumers find personal unsecured loans to pay off high-interest rate credit card debt. Signature One Financial works with Peer to Peer lenders representing literally thousands of investors making it easier to find the right loan for the consumer even when they have been turned down by conventional lending institutions. This has given Signature One Financial great reviews on the CFRB and BBB.
  • Life Insurance, Signature One Financial works with Life Insurance Professionals who interview their clients to help determine the coverage that is most affordable and provides the maximum coverage for their client’s situation. Rather than sell a “one size fits all” product they help the clients to determine what their insurance needs are and then share with them the A-rated companies that provide insurance products that can meet those needs. One more reason Signature One Financial Reviews are so favorable.
  • Retirement Planning. Signature One Financial has built a strong relationship with fee-based investment advisors working to ensure their client’s retirement goals and objectives are achieved through careful planning and deliberate implementation. These advisor’s compensation is tied to the success of their client’s portfolio creating a win-win scenario for both the advisor and client.

It is these types of relationships that consistently give Signature One Financial the favorable reviews published on this website the BBB and many other online forums. Signature One Financial goes out of their way to provide financial solutions to their clients even when it means referring the client to another company for the financial service or product.

Signature One Financial Review Conclusion

Signature One Financial BBB A+ Rating

The conclusion of this Signature One Financial Review, 5 Stars again