Allianz Annuity Review 2024 (2024)

Allianz is a major global insurance company based in Munich, Germany with over 125 million customers around the world. Through its subsidiary Allianz Life, it provides life insurance, annuities and asset management services in the United States out of its headquarters in Minneapolis, Minn. Allianz is a financially secure company with high customer satisfaction ratings for its annuities.

Allianz has the longevity common among top annuity companies, having started in 1896. It specializes in fixed index annuities and has an impressive selection of these products. Here’s what Allianz offers and how it stacks up against the competition.

Allianz Fixed Index Annuities

Allianz offers seven different fixed index annuities. Each fixed index annuity follows the same general system: you earn a return based on a market index like the S&P 500, the BlackRock iBLD Claria® Index, the Bloomberg US Dynamic Balance Index II and the PIMCO Tactical Balanced Index.

Allianz then gives you a return based on the index’s performance. Your return will receive protection against market losses using a floor and a limit on potential returns using either a cap, a spread or a participation rate. You don’t earn your underlying index’s total gain or loss. Each product uses a different system and offers different benefits:

• Allianz Benefit Control. Allianz Benefit Control balances early access to your money with control over how you invest and when you take income from the annuity. It provides a bonus on premiums paid over the first 18 months as well as a bonus on interest earnings. You also have the option to start collecting income right when you sign up or on any annual contract anniversary after you turn 50. You must deposit at least $20,000 to buy this annuity.
• Allianz 222. Allianz 222 pays a bonus on your initial deposit as well as a bonus on your future interest earnings, growing your savings in two ways. If you die before collecting all income payments, this annuity provides an enhanced death benefit for your heirs. To receive all the bonuses, you must hold the contract for at least ten years before starting lifetime income withdrawals. You can’t start receiving income before then. You must deposit at least $20,000 to buy this annuity.
• Allianz 360. Allianz 360 increases your annuity income each year you wait to begin collecting payments, starting at age 40. The longer you wait, the larger your future income. When you start collecting income, this annuity also allows you to collect fixed payments or to have payments that can grow over time based on the index performance. You must deposit at least $20,000 to buy this annuity. You must have the annuity for ten years or there is a surrender charge.
• Allianz Accumulation. Allianz Accumulation focuses on growing your money for the future. It lets you invest in 17 different market indexes. While you can open this annuity for $20,000, if you deposit at least $100,000, you’ll qualify for higher annuity rates. You must have the annuity for ten years or there is a surrender charge.
• Essential Income 7® Annuity. The Essential Income 7 Annuity focuses on growing your income during retirement. It gives you a rider that increases your income while you’re saving and gives you the option to grow your income each year in retirement to help keep up with inflation.The essential income 7 annuity offering has a smaller initial minimum deposit of $10,000 and the surrender charge disappears after seven years instead of Allianz’s more common ten year period.
• Core Income 7® Annuity. The Core Income 7 Annuity is similar to the Essential Income 7 Annuity. It lasts seven years, has a minimum deposit of $10,000, and focuses on growing your retirement income both during your saving years and after you retire. The Core Income 7 Annuity gives you more index options for investing, such as the Nasdaq 100 and Russell 2000. These aren’t available with Essential Income 7. In exchange, Core Income charges a higher annual fee for the income guarantee: 1.25% per year versus 1.05% per year on Essential.
• Retirement Foundation ADV® Annuity. The Retirement Foundation ADV Annuity is sold through advisory platforms, not directly to individuals. Therefore, you must work with an advisor whose platform offers this annuity to buy this product.

Each Allianz fixed index annuity allows you to take out 10% of your initial premium each year without a surrender charge. The Allianz fixed index annuities have different surrender charges, interest rates and bonuses. These change over time and depend on the state where you buy your annuity and your annuity contract’s clauses. Speak with a representative from Allianz for the specifics.

Allianz Variable Annuities

Allianz does not sell standalone variable annuities where you invest directly in market accounts, like mutual funds. Instead, it sells registered index-linked annuities (RILAs). RILAs combine features of a fixed index annuity with a variable annuity.

You decide how to divide your money between different market indexes with varying formats of return. If the market index does well, you earn a higher return than you would with a traditional fixed index annuity. Some of the Allianz RILA investment options offer uncapped growth, meaning you earn the entire index return. This is similar to a variable annuity.

However, the RILAs have some limits on losses, making them safer than a variable annuity. The potential losses are higher than on a fixed index annuity though. Some RILAs also offer lifetime income guarantees, regardless of your investment performance.

Alllianz RILA Specifics

Allianz offers five different RILAs, combining fixed index features and variable annuities. Depending on the product, they require a minimum deposit of $5,000 or $10,000. You also can deposit more money after signing up for future investments.

The RILAs charge a $50 annual contract fee, which is waived if you have more than $100,000. Most charge an annual percentage fee as well, ranging from 0.25% to 1.25%.

Most of the RILAs last six years. If you withdraw before then, you owe a surrender charge. However, Allianz lets you take 10% of your yearly balance from these products.

Allianz Fixed Annuities

Allianz does not sell fixed annuities that earn a guaranteed set return. If you want one of these products, you must look elsewhere. For ideas, check out our review of the best fixed annuities rates.

Allianz Immediate Annuities

Allianz does not sell a standalone immediate income annuity to consumers. Instead, several of its fixed index annuities let you start taking income right after you sign up. Review individual Allianz fixed index annuity offerings and contracts to see which immediate income options would work best for you.

Pros and Cons of Allianz Annuities

Pros

• Wide selection of fixed index annuities. Allianz has a wide selection of fixed index annuities for different goals like accumulation, early access to your money and retirement income growth. It also sells RILAs, which are hybrid fixed index annuities with more growth upside and risk.
• More investment options. Allianz offers several market indexes for its annuities, allowing you to invest beyond the most common ones, like the S&P 500.
• Riders for retirement income and growth. Many Allianz annuities offer riders to add guarantees for future income growth and to grow your income each year once you start payments.
• All annuities include penalty-free early withdrawals. You can take up to 10% of your deposit out of your Allianz annuities each year without a surrender charge.
• Financially secure company with good customer satisfaction. Allianz has an A+ rating from A.M. Best, showing it’s financially secure. It also receives a high score for customer satisfaction from J.D. Power, ranking 6th overall and slightly above the industry average.

Cons

• No fixed annuities. Allianz does not sell fixed annuities with a guaranteed return. You need to choose another company if you want a fixed annuity.
• Complex products. Allianz’s broad product selection can be challenging for nonprofessionals to sort through. The hybrid RILAs are especially complicated, even for our team who have been sifting through annuity contracts for months while writing these reviews. The more complicated a product is, the less likely you are to understand it and be able to choose the right one for your situation. If RILAs intrigue you, consider seeking the opinion of a qualified fiduciary financial advisor who does not sell annuities and can’t make a commission off of your choice.
• Limited options for immediate income annuities. Allianz does not sell a standalone immediate annuity. If you want income immediately, some of its fixed index annuities give this option. Others require you to wait for the entire contract, up to 10 years, or you forfeit some of your earnings to start income payments early.
• Charges fees for most riders and variable annuities. If you want income guarantees from Allianz, you must pay extra for a rider. Most of its hybrid RILAs charge annual fees as well. While Allianz’s base rates are competitive, once you start adding features you may find that going with a competitor offers you a better final rate.

Alternatives to Allianz

MassMutual

Founded in 1851, MassMutual is one of the oldest and most prominent life insurance companies in the United States. While it sells all types of annuities, it stands out for its immediate income annuities.

Nationwide

Nationwide sells annuities along with auto and home insurance. It does an excellent job with its variable annuities.

Americo

Americo sells high-quality fixed annuities, a product not found with Allianz. One of Americo’s fixed annuities landed on our roundup of the best fixed annuity rates.

AIG

AIG is another global insurance company. It sells all types of annuities, has a solid financial rating, and has excellent customer satisfaction.

Athene

Athene is a relatively new annuity company but has become a significant market player. It sells annuities that include rider benefits at no extra charge, like income guarantees. Most companies, like Allianz, charge extra for these benefits.

How Annuities Work

Annuities are a type of insurance contract. You first deposit money into the annuity as a lump sum purchase or through payments over time. The annuity company will then pay a return on your balance. Then, when you’re ready, you can turn your annuity balance into future income payments. The income can last for a period of years or be guaranteed to last for the rest of your life.

Several types of annuities exist, with different approaches to earning a return and paying income:

• Fixed annuities pay a guaranteed return. When you sign up, you pick how many years you want the annuity to last and will earn a guaranteed interest rate during this time. Fixed annuities are safe, predictable, and have low fees.
• Variable annuities let you invest your balance in market subaccounts, like mutual funds. Your growth depends on investment performance, and losing money is possible. Variable annuities have more risk but also higher return potential. Some variable annuity contracts offer performance guarantees. For example, a variable annuity might promise a minimum future income level even if your investments perform poorly.
• Fixed index annuities grow your savings based on the performance of some market index, like the Nasdaq 100 or the S&P 500. These annuities set limits to your maximum possible gains and losses. Many guarantee you won’t lose money during market downturns.
• Immediate annuities start paying you income right away. There’s no growth phase to build your savings first. After you sign up, the annuity turns your balance into future income payments.

Be sure to consider the pros and cons of annuities before signing up for one.

What to Look for in an Annuity

Annuities are long-term investments. After you sign up, changing your mind is costly because most contracts come with a sizable surrender charge. That’s why it’s essential to research and find the right fit before buying one. Some annuities are better deals than others. Ideally, your annuity should offer the following:

• Competitive returns. Check that your annuity is paying a competitive return compared to other options. Check the base interest rate as well as any performance guarantees and bonuses.
• Low fees. The more you pay in fees, the less you have for growth and future income. Ensure you understand what you’re paying for with an annuity and that it’s reasonable.
• Some early access to your money. While annuities typically charge surrender charges if you cancel early, some give you partial access to your money. For example, companies could let you take out 10% of your balance each year penalty-free.
• Riders for customization. Riders are extra benefits you can add to annuities like investment return guarantees or a more considerable death benefit for your heirs. These options allow you to customize the annuity to match your needs.
• Backed by a secure company. Annuities can last for years, even decades. Ensure that a company has the financial resources to keep paying these claims by checking its financial strength rating.

If you’d like more help, consider meeting with a financial advisor to compare annuities. Look for one who wouldn’t earn a commission selling these products.