Allianz 360 Annuity Review
The Allianz 360 is a fixed indexed annuity designed primarily for lifetime income. It combines principal protection, index-linked interest potential, a built-in lifetime income rider, and the ability to choose between level or potentially increasing lifetime withdrawals.
There is one situation where we think the Allianz 360 can make sense: someone who wants lifetime income and plans to start that income immediately or within the first year.
If you plan to defer the income for several years, we would generally use a different annuity.
Allianz 360 Product Details
| Product Type | Fixed Indexed Annuity |
| Primary Purpose | Lifetime Income |
| Surrender Charge Period | 10 Years |
| Surrender Charge Schedule | 10%, 10%, 10%, 8.75%, 7.50%, 6.25%, 5%, 3.75%, 2.50%, 1.25% |
| Free Withdrawal | Up to 10% of paid premium under the contract provisions |
| Additional Premium | Available for up to 18 months, subject to contract provisions |
| Market Value Adjustment | Yes |
| Return of Premium | No |
| 360 Benefit Rider | Built in |
| Current Rider Charge | 0.95% of accumulation value; subject to contractual maximum |
Allianz is an excellent annuity company. The company is currently rated A+ (Superior) by AM Best, so our concern with the Allianz 360 is not the financial strength of the insurer. It is how this particular product calculates future lifetime income.
Our Professional Opinion
Our professional opinion is that the Allianz 360 is only a good fit for someone seeking lifetime income who intends to start the income immediately or within the first year.
The reason is the performance-based nature of the income benefit. If you buy this annuity today and plan to defer income for five, seven, or ten years, your eventual retirement income is influenced by how much interest the contract earns during that deferral period.
That puts part of your future retirement income in the hands of the insurance company. Allianz controls future cap rates, participation rates, and other renewal terms within the guarantees of the contract. Those rates can be changed after the applicable crediting period ends.
We do not like building a future retirement income plan around renewal rates that can change.
Allianz also tends to provide much of the attractive upside potential through manufactured, volatility-controlled, or engineered indexes rather than straightforward traditional indexes such as the S&P 500. Those strategies may look impressive in a historical illustration or backtest, but that does not mean they will produce the same interest credits after you purchase the annuity.
That is the big-picture problem. If your future retirement income depends on the contract accumulating value and Allianz later lowers participation rates or caps, your actual future income can be lower than what you originally expected.
We do not think that is a good way to plan retirement income.
If somebody wants to defer income for several years, we prefer a guaranteed lifetime withdrawal benefit with contractually guaranteed income growth. We want to know how the income benefit will grow regardless of whether the underlying index strategies perform well or poorly.
The Allianz 360 becomes more attractive when the buyer intends to start income right away. If income begins within the first year, you eliminate most of the risk associated with depending on years of future renewal rates. Once the lifetime income amount is established, you can receive the level payment for life or select the increasing-income option and allow future interest credits to potentially increase the payment.
Even then, we would only recommend the Allianz 360 if its actual lifetime income payout is competitive with the other A- or better-rated insurance companies available at the time.
What We Like
- Immediate Lifetime Income Can Work: The product can make sense when the buyer intends to begin lifetime income immediately or within the first year.
- Level Income Option: Once established, the level withdrawal amount provides predictable lifetime income that cannot be outlived under the rider provisions.
- Increasing Income Option: Buyers willing to start with a lower payment have the opportunity for future increases based on interest credited to the contract.
- Lifetime Income: The income rider provides payments for life rather than requiring traditional annuitization.
- 105% Interest Credit: Before income begins, the 360 Benefit currently credits 105% of fixed or indexed interest earned to the accumulation value.
- Index Lock: Certain strategies allow you to lock in a positive index value during the crediting period rather than waiting until the scheduled end date.
- Auto Lock: You can set an interest target that automatically activates the Index Lock when the target is reached.
- Strong Insurance Company: Allianz comfortably exceeds our A- minimum financial-strength preference.
- Principal Protection: Negative index performance does not directly reduce the contract value due to market losses.
- 10% Withdrawal Feature: The contract provides annual penalty-free access under its withdrawal provisions.
What We Don’t Like
- Performance-Based Future Income: This is the biggest reason we would not use Allianz 360 for someone planning to defer lifetime income for several years.
- Renewal Rate Risk: Cap rates, participation rates, and other crediting terms can change after the applicable crediting period.
- Too Much Control in the Insurer’s Hands: Future renewal decisions can materially affect the growth that ultimately supports your retirement income.
- Heavy Use of Engineered Indexes: Much of the attractive upside is tied to complicated volatility-controlled or excess-return indexes rather than traditional transparent indexes.
- Backtested Performance: Historical hypothetical results for engineered indexes should not be confused with actual future credited interest.
- Rider Fee: The 360 Benefit currently costs 0.95% annually and the contract allows that charge to increase up to the contractual maximum.
- Long Surrender Period: This is a 10-year contract with surrender charges starting at 10%.
- No Return of Premium: There is no contractual return-of-premium feature if you decide to leave early.
- Multi-Year Crediting Terms: We generally prefer one-year crediting strategies rather than committing to 2- or 5-year index-crediting periods.
- Not Our Favorite for Pure Accumulation: If the goal is simply safe growth, there are accumulation-focused FIAs we prefer.
Why We Only Like Allianz 360 for Immediate Income
The distinction between immediate income and deferred income is the most important part of this review.
When someone purchases the Allianz 360 and starts lifetime income right away, the initial withdrawal percentage is known. The buyer is no longer spending years hoping that future index credits and renewal terms produce the retirement income originally illustrated.
Starting income early removes much of the uncertainty that we dislike about the product.
If you wait five or ten years, the contract’s actual interest credits during those years matter much more. Future participation rates and caps matter. The performance of the selected allocations matters.
That is exactly what we do not want when somebody is depending on the annuity to fund essential retirement expenses.
Level Income vs. Increasing Income
The Allianz 360 gives you two lifetime income choices.
Level Income
The Level Income option provides a higher starting payment than the increasing option and is designed to remain level for life.
This is the option we would focus on when the priority is maximizing predictable income today.
Increasing Income
The Increasing Income option starts with a lower lifetime withdrawal amount but has the opportunity to increase when the annuity receives positive interest credits.
The tradeoff is simple: you accept less income today in exchange for the possibility of more income later.
We would compare the cumulative break-even point before selecting this option. An increasing payment does not automatically mean you will receive more total income over your lifetime.
Compare Allianz 360 Income Payouts
Even if you plan to start income immediately, do not buy the Allianz 360 until you compare the actual payout against the rest of the market.
The highest-paying lifetime income annuity changes as insurance companies adjust their payout rates. Your results also depend on your age, state, premium amount, whether the income covers one or two lives, and exactly when you want the payments to begin.
Contact us and we will create a custom annuity income heat map based on your age, state, premium amount, and desired income start date. We compare A- or better-rated insurance companies so you can see which contracts are currently producing the most guaranteed lifetime income for your situation.
How the 360 Benefit Rider Works
The Allianz 360 Benefit is automatically built into the product and currently has an annual charge equal to 0.95% of the contract’s accumulation value. After the first contract year, the charge can change subject to the contractual maximum.
Before lifetime income begins, the rider provides two primary benefits.
- Interest Enhancement: The rider currently provides a credit equal to 105% of the fixed or indexed interest earned. If the contract earns 4%, for example, the credited amount after the enhancement would be 4.20%.
- Increasing Withdrawal Percentage: Beginning at age 40, the applicable lifetime withdrawal percentage increases as the contract is held before income begins.
The important point is that the withdrawal percentage can increase with time, but the underlying account value that percentage is applied against is still affected by the contract’s actual performance and rider charges.
Index Options and Crediting Strategies
Allianz 360 offers a traditional S&P 500 option as well as several proprietary and volatility-controlled indexes.
- S&P 500: Traditional large-cap U.S. benchmark.
- S&P 500 Futures Daily Risk Control 5% Index: A volatility-controlled futures-based strategy.
- BlackRock iBLD Claria ER Index: An engineered excess-return index using multiple asset classes.
- Bloomberg U.S. Dynamic Balance II ER Index: A rules-based engineered index.
- PIMCO Tactical Balanced ER Index: A proprietary excess-return strategy using equity and fixed-income components.
We would not choose an allocation simply because the participation rate looks large. A 150%, 200%, or even higher participation rate on an engineered excess-return index cannot be directly compared with a straightforward S&P 500 cap.
The index design matters just as much as the participation rate.
Index Lock and Auto Lock
The Index Lock feature lets you lock an index value during certain annual and multi-year point-to-point crediting periods.
If the strategy has generated a positive index result during the period, you can lock that index value rather than continuing to expose the result to changes through the remainder of the crediting period.
Auto Lock allows you to set a target and have Allianz automatically activate the lock if that target is reached under the contract rules.
This is useful, but do not confuse Index Lock with a cap lock. Index Lock locks an index value during a crediting period. It does not guarantee that Allianz will maintain the same cap or participation rate for future renewal periods.
2-Year and 5-Year Crediting Strategies
Allianz also offers multi-year point-to-point strategies with 2-year and 5-year crediting periods.
The participation rate is guaranteed for the applicable crediting period, which provides some certainty during that term.
We generally prefer one-year crediting strategies. A 2- or 5-year strategy ties the money to a longer index-crediting period, and the participation rate can be reset when that period ends.
Unless the economics are materially better, we would normally rather use a simple annual point-to-point strategy.
Is Allianz 360 Good for Accumulation?
It is not one of our favorite products for pure accumulation.
The contract protects against direct market losses and does provide an interest enhancement through the 360 Benefit before income starts. However, you are paying for an income rider, and future renewal rates can change.
If safe accumulation is the primary goal, we would rather use a product designed specifically for accumulation. Two of our favorites are the Oceanview CapLock and the Sagicor Sage Accumulator, where multi-year cap locks provide more certainty about future growth potential.
Liquidity and Surrender Charges
The Allianz 360 has a 10-year surrender-charge period.
| Contract Year | Surrender Charge |
|---|---|
| 1 | 10.00% |
| 2 | 10.00% |
| 3 | 10.00% |
| 4 | 8.75% |
| 5 | 7.50% |
| 6 | 6.25% |
| 7 | 5.00% |
| 8 | 3.75% |
| 9 | 2.50% |
| 10 | 1.25% |
| 11+ | 0% |
After the applicable waiting period, the contract generally allows penalty-free withdrawals of up to 10% of paid premium each contract year under the contract provisions.
Withdrawals above the free amount during the surrender period can also be affected by a Market Value Adjustment.
This is long-term money. If there is a reasonable chance you will need substantial access to the account during the next several years, a 10-year annuity may be the wrong tool.
Required Minimum Distributions
Applicable RMDs from an Allianz 360 held inside a qualified retirement plan can generally qualify as free withdrawals under the contract provisions.
Remember that an IRA or other qualified retirement account already receives tax deferral. You do not purchase an annuity inside an IRA for additional tax deferral; you buy it for the contractual insurance features, principal protection, and lifetime income benefits.
Death Benefit
The Allianz 360 provides a standard annuity death benefit rather than the kind of enhanced legacy benefit found on products specifically designed for estate planning.
The death benefit is generally based on the greatest applicable contract value under the contract provisions, which may include the accumulation value, guaranteed minimum value, cumulative withdrawal amount, or net premium calculation.
If leaving a large, predictable inheritance is a primary objective, we would compare life insurance or a product specifically designed around an enhanced death benefit instead.
Who Should Consider the Allianz 360?
- Someone Starting Income Immediately: You want lifetime income now or within the first year and the current Allianz payout is competitive.
- Someone Who Wants Level Lifetime Income: You want a payment that remains predictable for life.
- Someone Comfortable With Increasing Income: You are willing to start with less income in exchange for potential future increases.
- Someone Comfortable With a 10-Year Contract: You have adequate liquidity elsewhere and do not expect to need most of the account.
Who Should Probably Buy Something Else?
If you are buying today and do not plan to start lifetime income for several years, we would normally choose another product.
For deferred income, we want a contractually guaranteed income roll-up rather than relying on years of future index performance and renewal rates.
If accumulation is the goal, we would also use a different FIA designed specifically for protected growth.
If you need protection against future long-term care expenses, the Allianz 360 is also not a replacement for long-term care insurance or a hybrid life and long-term care policy.
What We Recommend
If you want to start lifetime income immediately and Allianz 360 is currently one of the highest-paying options from an A- or better-rated company, we would consider it.
The moment you tell us that the plan is to buy the annuity today and wait five or ten years before starting income, our opinion changes.
For deferred income, we would rather use a contractually guaranteed income rider. We do not want the success of a future retirement income plan depending on what an insurance company decides to do with renewal cap rates and participation rates years from now.
The Allianz 360 is not necessarily a bad annuity. It is a product we think is good for a very specific job: competitive lifetime income that starts immediately.
Use it for that job. Do not use it to gamble on what your retirement income might become many years in the future.
Compare the Allianz 360 Before You Buy
Lifetime income payouts change constantly. Before purchasing the Allianz 360, compare the actual guaranteed income against competing A- or better-rated annuities based on your age, state, premium amount, and desired income start date.
Contact The Annuity Expert for a free custom income heat map and side-by-side quotes. There is no cost and no obligation to purchase anything.
If you already own an Allianz 360 and want to know whether it still fits your retirement plan, request a free annuity second opinion.
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