HOW IT WORKS
Our fixed index annuity
Withdrawal options to suit a variety of needs
Guaranteed lifetime income options
Your lifetime withdrawal rates start strong — and only get betterYou can begin withdrawals as early as age 50 -- but the longer you wait, the higher your lifetime income withdrawal will be. Your lifetime income withdrawal percentage is guaranteed to increase each year beginning at age 45 and this continues until you begin withdrawing income. SEE HOW THE LIFETIME WITHDRAWAL PERCENTAGES RISE BY EACH YEAR
And at that point, you can choose one of these two income options available with the Income Benefit rider (automatically included at an additional cost):
Option 1: Predictable, dependable income for life
This may be a good choice if you want the reassurance of knowing exactly how much income you'll receive every month.
Option 2: Income for life — plus an opportunity for payment increases
This offers a smaller payment up front, but has the potential to increase each year when your annuity contract earns interest. For more on how interest is earned, see About Indexing
Of Allianz Life fixed index annuity clients who are receiving income, 99% who chose our increasing income option have received1 an increase. 89% of those2 with more than one opportunity received an income increase more than once.
1 The total number of contracts used for this analysis was 13,732 and represents any increase of any amount in a given year. There is no guarantee your contract will receive an increase in any given year.
2 The 10,873 contracts between 1/1/08 and 12/31/16 with more than one opportunity to increase were used for this analysis.
Although external indexes may affect your contract’s values, fixed index annuities do not directly participate in any stock, bond, or investment. You are not buying bonds, shares of stock, or shares of an index.
Other Withdrawal Options
Free partial withdrawals
You can withdraw up to 10% of your contract value each contract year without any withdrawal charge or market value adjustment (MVA; see below), subject to certain requirements. This option is available as long as you haven't begun taking income or made premium payments in that contract year. (Remember that any withdrawals you make will reduce your contract values, and the value of any income and death benefits.)
Charges for larger partial withdrawals
Prior to your seventh contract anniversary, any year that you take out more than 10% of the money you’ve put into your annuity, you’ll pay a partial withdrawal charge for the amount above 10%.
The amount above 10% is also subject to a market value adjustment (MVA), which is applied at the time the withdrawal is made. This MVA, which is based on the current interest rate environment, may increase or decrease the amount above the 10% allowed.
During the first seven years, there is a charge for withdrawals; this charge decreases year by year until it is 0% for year 8 forward. If you take out all of your contract’s value before the seventh contract anniversary, you will receive the cash value – which is equal to the accumulation value minus the full withdrawal charge, and then adjusted by the MVA (see below), as show in the chart below. Withdrawals and access to your annuity’s full accumulation value after the seven-year withdrawal charge period are penalty-free.
An MVA is a calculation used to adjust your values according to the interest rate environment, as measured by corporate bond yields, at the time the withdrawal is taken. The MVA may increase or decrease the contract’s cash value. The MVA can never cause the cash value to be less than the guaranteed minimum value or greater than the accumulation value.
|In general, if corporate bond yields at the time of the withdrawal are:||Then the cash value will be:|
|Less than when you added the premium||Higher|
|Equal to when you added the premium||Unaffected|
|Greater than when you added the premium||Lower|
Annuitizing your contractAnother way to receive income is by converting your annuity into a series of periodic payments to you. This is called annuitization, and there are several options available. Please note that if you choose to annuitize, you will no longer be eligible for lifetime income withdrawal options and their benefits, including increasing income potential.
Hospitalization or assisted living withdrawalAdding the optional Flexible Withdrawal Rider gives you additional access to the money in your annuity should you need it earlier than expected. It allows you a one-time lump-sum payment – without surrender charges – in any amount up to the contract’s accumulation value, should you become confined after the first contract year to an eligible nursing facility, assisted living facility, or hospital for 30 of 35 consecutive days. This rider is available for an extra fee, and you must select it when you apply for your annuity. (Not available in all states)
Death benefit for your beneficiaries
Naming one or more beneficiaries (other than your estate) can be important – because without a beneficiary, the money in your annuity could be subject to probate.
If you have not chosen annuity payments, your beneficiary(ies) will receive a death benefit that is equal to your contract value (which equals your purchase amount plus any credited interest you’ve received, minus fees and withdrawals, including income withdrawals adjusted by any MVAs).
Your beneficiary(ies) can choose to receive your contract’s death benefit either as a lump sum (a single payment) or as annuity payments over five years or longer.
If you are getting annuity payments, in lieu of a death benefit, your beneficiary(ies) will receive any remaining guaranteed payments under the option you chose.