Our Allianz Benefit Control Annuity Review
The Allianz Benefit Control is a fixed indexed annuity designed primarily for guaranteed lifetime income, with principal protection, index-linked interest potential, a Protected Income Value, and benefits that can increase income under certain circumstances.
We do not generally consider the Allianz Benefit Control one of our first choices for guaranteed lifetime income. The reason is fairly simple: in our experience, the actual payouts are often middle of the road compared with other income annuities available from financially strong insurance companies.
There are times when Allianz Benefit Control can be competitive, especially when someone wants to begin income immediately. But we would never buy it without comparing the actual guaranteed payout against the rest of the market first.
Allianz Benefit Control Product Details
- Product Type: Fixed Indexed Annuity
- Primary Purpose: Guaranteed Lifetime Income
- Surrender Period: 10 Years
- Minimum Premium: $20,000
- Additional Premium: Generally allowed during the first 18 months, subject to contract provisions
- Free Withdrawals: Generally up to 10% annually after the first contract year
- Market Value Adjustment: Yes
- Income Start: Lifetime withdrawals can begin immediately or on an eligible monthly anniversary after age 50
- Income Multiplier: Enhanced income may be available for qualifying health conditions after the applicable waiting period
Allianz is an excellent annuity company. Allianz currently carries an A+ (Superior) rating from AM Best, so our concerns with Benefit Control are about the product and its competitiveness—not the financial strength of the insurer.
Our Professional Opinion
We do not generally recommend the Allianz Benefit Control as our first choice for guaranteed lifetime income because the payouts are often not competitive enough with the rest of the market.
That does not mean the product is always bad. Certain times of the year, Benefit Control can become competitive and may even move into the upper tier of lifetime income products. That is exactly why you have to compare it when you are actually ready to buy.
With lifetime income, the feature that matters most is not the size of the bonus, the brand name, or how complicated the illustration looks. The question is how many guaranteed dollars of retirement income your premium will produce.
If another A- or better-rated insurance company will pay you materially more lifetime income for the same premium, choosing Allianz simply means you receive less retirement income every month for the rest of your life.
Where Benefit Control can make sense is someone who wants to start lifetime income immediately or within the first year and the current Allianz payout is competitive with the other carriers available at that time.
Once income begins, Benefit Control gives you an opportunity for future increases based on interest credited to the contract. That can provide an income stream that has the potential to rise over time.
But there is a tradeoff. Increasing-income designs generally start with a lower payment than a competitive level-income annuity. Based on the comparisons we commonly see, it can take roughly eight or nine years before the increasing payment catches up to or overtakes what you could have been receiving from a higher level payment.
For example, if you begin income around age 60, you may receive less income during much of your 60s before the increasing option finally catches up. You have to decide whether giving up income today is worth the possibility of more income later.
We also have concerns about the accumulation side of the product. Allianz controls future cap rates, participation rates, and other crediting terms within the contract guarantees. If growth matters to you, understand that the upside potential you see when you purchase the annuity is not necessarily the upside potential you will have five or ten years later.
Much of the stronger upside potential is also concentrated in engineered, volatility-controlled, and excess-return indexes rather than traditional benchmarks. Benefit Control does offer an S&P 500 strategy, but many of the higher participation rates are attached to indexes from Bloomberg, BlackRock, PIMCO, or futures-based risk-control strategies.
That does not automatically make those indexes bad, but a large participation rate on a manufactured index should never be confused with the same participation rate on a traditional index.
So our opinion is simple: if Benefit Control is producing one of the highest guaranteed income payouts for your situation when you are ready to start income, it can be a viable choice because Allianz is a great company. If the payout is not competitive, there is no good reason to accept less retirement income just because the contract has a recognizable name.
What We Like
- Immediate Lifetime Income: Income can begin immediately or on an eligible monthly anniversary after age 50.
- Potential for Increasing Income: Lifetime withdrawals may increase when the contract receives positive interest credits.
- Strong Insurance Company: Allianz easily exceeds our A- or better financial-strength preference.
- Principal Protection: Direct stock-market losses do not reduce the contract’s accumulation value.
- 25% PIV Premium Bonus: The Protected Income Value currently receives a substantial premium bonus used for income calculations.
- Interest Bonus Options: The PIV can receive enhanced credits based on interest earned by the contract.
- Income Multiplier: Qualifying health events can increase the annual amount available for withdrawal.
- Index Lock: Certain strategies let you lock a positive index value before the crediting period ends.
- 10% Annual Liquidity: Provides penalty-free access to a portion of the contract after the applicable waiting period.
- RMD Friendly: Applicable required minimum distributions can generally qualify for penalty-free treatment under the contract provisions.
What We Don’t Like
- Income Often Isn’t Competitive Enough: In our experience, other A- or better-rated companies frequently provide higher guaranteed lifetime payouts.
- Increasing Income Starts Lower: You can spend years receiving less income before the increasing option catches up with a stronger level payout.
- Renewal Rate Risk: Allianz can change future cap rates and participation rates subject to contractual guarantees.
- Engineered Index Reliance: Much of the stronger upside potential is tied to proprietary, volatility-controlled, futures-based, or excess-return indexes.
- PIV Is Not Cash: The premium and interest bonuses increase the Protected Income Value used for income calculations, not the amount you can simply withdraw as a lump sum.
- Long Surrender Period: The contract generally has a 10-year surrender-charge schedule.
- Allocation Charges Can Change: Certain strategies may be subject to allocation charges that can increase under the contract provisions.
- Not Our Favorite for Pure Growth: If accumulation is your main objective, we would use an accumulation-focused FIA instead.
How the Allianz Benefit Control Works
The Allianz Benefit Control uses two important values: the accumulation value and the Protected Income Value.
The accumulation value is the actual contract value. It reflects premiums, credited interest, withdrawals, charges, and applicable adjustments.
The Protected Income Value, or PIV, is used to calculate lifetime income benefits. It receives bonus credits that can make the PIV substantially larger than the actual accumulation value.
The PIV is not walkaway money. You cannot simply surrender the annuity and receive the PIV as a lump sum. To benefit from that value, it is generally used through the contract’s lifetime withdrawal provisions.
Premium and Interest Bonuses
The current Benefit Control design includes a premium bonus credited to the PIV. It also provides different interest-bonus structures that determine how interest earned by the contract affects the Protected Income Value.
These bonuses can make the illustrated income value look impressive, but do not compare PIV dollars with actual account-value dollars. They serve different purposes.
If you surrender the contract instead of using the lifetime withdrawal benefit, the PIV bonus is not simply added to your cash surrender value.
Guaranteed Lifetime Income
The Allianz Benefit Control provides lifetime withdrawals through its built-in guaranteed lifetime withdrawal benefit.
Income can begin immediately for an eligible buyer or on a later monthly anniversary.
Once lifetime withdrawals begin, the income can continue for life even if the account value is eventually depleted under the rider provisions.
The contract also provides the opportunity for the income amount to increase after positive interest credits.
Our recommendation is not to focus on the PIV or bonus percentage. Focus on the actual guaranteed annual income.
Compare Allianz Benefit Control Income Payouts
Lifetime income payouts vary significantly by insurance company, age, state, premium amount, whether income covers one or two lives, and when you want payments to begin.
This is especially important with Allianz Benefit Control because the product is only attractive to us when the actual payout is competitive.
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 products are actually paying the most guaranteed lifetime income for your situation.
Level Income vs. Increasing Income
One of the most important decisions with an income annuity is whether you want a higher level payment today or a lower starting payment with the potential to increase later.
Level Income
A competitive level-income annuity starts with a higher guaranteed payment and keeps that payment level for life.
This can make sense when your primary objective is maximizing spendable retirement income today.
Increasing Income
Benefit Control can provide income that has the potential to increase based on interest credited to the contract.
The problem is that you generally start with less income.
Depending on the competing level payout and future increases, it may take approximately eight or nine years before the increasing option catches up.
That means someone starting income at age 60 could potentially receive a lower annual payment throughout much of their 60s before finally overtaking the level option.
Do the cumulative math before choosing increasing income. The fact that a payment may rise later does not automatically mean it produces more money over your retirement.
Income Multiplier Benefit
After the applicable waiting period, Allianz Benefit Control can provide an enhanced withdrawal amount when qualifying health conditions are met.
Eligibility can include qualifying confinement in a hospital, nursing facility, or assisted living facility, or being unable to perform at least two of the six activities of daily living under the rider provisions.
The enhanced annual maximum can generally be twice the normal amount while eligibility requirements continue to be met.
There is an important limitation: if the accumulation value reaches zero, the enhanced amount ends and withdrawals revert to the standard lifetime amount.
This is an annuity income enhancement, not a replacement for actual long-term care insurance. Someone concerned about extended care costs should also compare dedicated coverage or a hybrid life and long-term care policy.
Growth Potential
Allianz Benefit Control provides several index-linked strategies plus a fixed interest allocation.
The traditional S&P 500 is available with certain cap-based crediting methods. Allianz also offers several engineered or volatility-controlled strategies, including indexes from BlackRock, Bloomberg, PIMCO, and S&P futures-based risk-control strategies.
Be careful comparing participation rates. A large participation rate attached to an excess-return or volatility-controlled index does not mean you receive that same percentage of the return of the traditional S&P 500.
Future caps and participation rates can also change after the applicable crediting period, subject to the minimum guarantees in the contract.
If your primary goal is safe accumulation rather than income, we would generally use an accumulation-focused FIA with a multi-year cap lock instead.
Index Lock and Auto Lock
Index Lock lets you lock a positive index value during certain crediting periods rather than waiting until the end of the period.
This can be useful if an index has produced a positive result and you are concerned that the index may decline before the crediting date.
Do not confuse Index Lock with a cap lock. Index Lock protects an index value during the current crediting period. It does not prevent Allianz from changing the cap or participation rate at a future renewal.
Liquidity and Access
- 10% Free Withdrawals: Annual penalty-free access is generally available after the first contract year under the contract provisions.
- Required Minimum Distributions: Applicable RMDs can generally receive favorable surrender-charge treatment.
- Health-Related Benefits: Certain qualifying health events can provide additional access or enhanced income.
- After 10 Years: If lifetime income or annuity payments have not been started, some or all of the accumulation value may generally be available as a lump sum without the original surrender schedule.
Withdrawals above the contract’s free amount during the surrender period can be subject to surrender charges and a Market Value Adjustment.
Types of Retirement Accounts Accepted
Death Benefit
The death benefit depends on the applicable contract provisions and values at death. The accumulation value is different from the Protected Income Value, so beneficiaries should not assume they automatically receive the full PIV as an immediate lump sum.
The important distinction is that the PIV is primarily an income calculation value. Large bonuses shown on the PIV should not be confused with the contract’s actual cash account value.
Who Should Consider Allianz Benefit Control?
- Someone Starting Lifetime Income Soon: You plan to begin income immediately or within the first year.
- Someone Whose Allianz Payout Is Competitive: A current market comparison shows Benefit Control is producing one of the stronger guaranteed payouts for your situation.
- Someone Interested in Increasing Income: You understand that you are accepting a lower starting payment in exchange for the potential for future increases.
- Someone Who Values a Strong Carrier: You want the contractual guarantees backed by a highly rated insurance company.
- Someone Comfortable With a 10-Year Commitment: You have adequate liquidity elsewhere and understand the surrender schedule.
Who Should Probably Buy Something Else?
If another A- or better-rated company is offering materially more guaranteed lifetime income, we would buy the higher-paying contract.
If maximum safe accumulation is your main objective, Benefit Control is also not where we would start. The product is built around income and bonus features rather than being one of our favorite pure-growth FIAs.
If you are uncomfortable with engineered indexes, renewal-rate changes, or a lower starting payment on an increasing-income option, another annuity may be a cleaner fit.
What We Recommend
We would not automatically recommend Allianz Benefit Control simply because Allianz is a great company.
For lifetime income, the product has to earn the recommendation by producing a competitive guaranteed payout.
If Benefit Control is currently one of the highest-paying options from an A- or better-rated carrier and you want to start income immediately, we think it can be a viable choice.
If it pays less, there is no reason to accept a lower retirement income. And if you choose the increasing-income option, make sure you understand how many years of lower payments you may have to accept before the increases catch up with a competitive level-income alternative.
At the end of the day, the person who suffers from choosing a lower-paying income annuity is the annuity buyer. You simply have less money to spend every month.
Compare Allianz Benefit Control Before You Buy
We can compare Allianz Benefit Control against the rest of the A- or better-rated annuity market using your actual age, state, premium amount, income start date, and single- or joint-life needs.
Contact The Annuity Expert for a free custom income heat map and no-obligation quotes. We will show you which annuities currently provide the highest guaranteed income and how the level and increasing-income options compare.
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