Allianz Index Advantage+ Annuity Review
The Allianz Index Advantage+ is a registered index-linked annuity, or RILA. Unlike a fixed indexed annuity, a RILA can lose money when the underlying index declines beyond the protection provided by the selected buffer or floor.
We generally do not recommend RILAs like Index Advantage+ for most retirement savers. In our opinion, they sit in an awkward middle ground: you are accepting market-loss risk, but you are also giving up part of the market’s upside in exchange for a limited buffer, floor, or other protection feature.
Allianz is an excellent annuity company. Our concern with the Index Advantage+ is the product design and structure, not the financial strength of the insurance company.
Our Professional Opinion
We generally do not recommend the Allianz Index Advantage+ because we do not love the RILA structure.
If you are comfortable accepting investment risk and the possibility of losing principal, we would rather compare a traditional variable annuity or a diversified investment portfolio where you have more direct exposure to market returns.
If you are not comfortable losing principal because of a market decline, we would rather use a fixed indexed annuity where negative index performance does not directly reduce the account value.
Index Advantage+ gives you several ways to trade upside for protection. You can choose buffers that absorb the first portion of a market decline, a floor that limits the maximum index loss under the strategy, or certain strategies that provide 100% protection from negative index returns but generally offer lower upside.
The important word is “protection,” not “guarantee against loss” across the entire contract. With a buffer strategy, losses beyond the buffer are yours. With a floor strategy, you can lose up to the floor amount. This is a security product and principal can decline.
The product also currently has a base product fee. That means you are accepting market risk while also paying an insurance-product charge and potentially giving up upside through caps or participation rates.
For the right investor, that tradeoff may be acceptable. But for most retirees we work with, we think the cleaner choice is to decide which side of the fence you are actually on: either accept market risk for greater upside, or use a fixed indexed annuity when principal protection is the priority.
What We Like
- Multiple Risk Levels: You can choose among different buffer, floor, and protection structures.
- Traditional Index Choices: Current strategies include the S&P 500, Nasdaq-100, Russell 2000, EURO STOXX 50, and other benchmarks.
- 1-, 3-, and 6-Year Strategies: The contract provides several crediting-term choices.
- Performance Lock: Certain features can help lock in a strategy result before the end of an index term.
- Strong Carrier: Allianz is a financially strong insurance company.
What We Don’t Like
- You Can Lose Principal: RILAs are subject to investment risk.
- Limited Protection: A buffer only absorbs a defined portion of a decline; losses beyond it are passed to you.
- You Give Up Upside: Caps and participation rates limit returns on many strategies.
- Product Fee: The core Index Advantage+ contract currently assesses an annual product fee.
- Complexity: Buffers, floors, trigger rates, dual precision strategies, and multi-year terms make the product harder to evaluate.
- Long Crediting Terms: We generally prefer one-year terms rather than locking into a 3- or 6-year strategy unless the economics clearly justify it.
- Not Principal-Protected Like an FIA: Buyers sometimes confuse a RILA with a fixed indexed annuity even though the downside rules are materially different.
How the Buffer Works
A buffer absorbs the first portion of a negative index return. For example, with a 20% buffer, the strategy absorbs the first 20% of a decline. If the index falls more than the buffer, the excess loss is applied to your strategy value under the contract formula.
A 20% buffer does not mean you cannot lose money.
Buffer vs. Floor
A buffer protects the first portion of a decline. A floor generally limits the amount of negative index performance that can be applied to the strategy.
Index Advantage+ also offers a protection strategy designed to prevent losses from negative index returns in that particular strategy, but the tradeoff is lower growth potential.
Index Choices
One thing we do like is that Allianz uses recognizable market benchmarks rather than relying exclusively on manufactured indexes. Depending on the strategy and term, current choices can include the S&P 500, Russell 2000, Nasdaq-100, EURO STOXX 50, and an emerging-markets ETF benchmark.
Fees
The core Index Advantage+ contract currently has an annual product fee. Certain optional death-benefit features can add additional cost.
Fees matter because they are deducted regardless of whether the market gives you the return you hoped for.
Who Should Consider Index Advantage+?
- Someone who clearly understands that principal can be lost.
- Someone who wants partial downside protection but is willing to accept losses beyond the protection level.
- Someone who prefers an insurance contract and tax deferral over holding the comparable investments directly.
- Someone who has compared the RILA against both a traditional variable annuity and a fixed indexed annuity.
Who Should Probably Buy Something Else?
If you do not want to lose money due to market performance, use a fixed indexed annuity instead.
If you are comfortable with market risk and want stronger long-term upside potential, compare the RILA against a traditional variable annuity or a diversified investment portfolio.
What We Recommend
We generally would not choose Allianz Index Advantage+ as our first option. We prefer a clearer decision: accept market risk when growth is the priority, or use an FIA when principal protection is the priority.
If you are considering a RILA, compare the actual buffer, floor, cap, participation rate, term, product fee, surrender schedule, and renewal terms before purchasing.
Contact The Annuity Expert for a free, no-obligation comparison of the Allianz Index Advantage+ against fixed indexed annuities and other retirement strategies.
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