Allianz Pro V1 is a deferred indexed annuity that can help you stay on track to your retirement destination. It offers protection, guarantees, and the opportunity for interest growth.
When you make Allianz Pro V1 Annuity part of your retirement strategy:
- You can earn interest by choosing from two bond index allocations and/or a fixed interest allocation
- You can begin an annuity income stream after just one year
- You have full access to your money after six years
- You can take up to 10% of your premium in free withdrawals each year – starting immediately
Annuities offer several important benefits.
Tax deferral that can help your money grow:
- The money in your annuity can grow tax-deferred.
- This means you don’t have to pay taxes until you begin to withdraw money from the annuity.
- The power of tax deferral, compounded over the life of your annuity’s accumulation phase, may have a positive impact on the value your annuity generates for your retirement.
- Any money taken from your annuity may be subject to ordinary income tax and if taken prior to age 59½, a 10% federal additional tax.
Potential interest during the annuity’s accumulation phase:
During this initial phase, an annuity may be an appropriate vehicle to help you accumulate money for your retirement.
Income for life and other options during the retirement income phase:
When you are ready to start taking income, the annuity offers you a range of payout options.
Some options may offer a single payment.
Others may include income payments scheduled over a specific period of time, including your entire lifetime.
Guarantees for your contract values:
If you surrender your contract, you are guaranteed to receive at least a minimum value.
Death benefit protection for your beneficiaries:
Annuities are insurance products, so it’s only natural that they can give you reassurance, knowing your beneficiaries are protected if you pass away before you start receiving annuity payments.
Here’s how a deferred annuity works.
A deferred annuity is a contract between a contract owner and an insurance company.
As a contract owner, you pay a premium to the insurance company.
In exchange for your premium, the insurance company promises to make regular income payments to you over a period of time, beginning at some point in the future.
This is called annuitization.
You should not buy an annuity for short-term purposes.
You generally have to keep your premium in a deferred annuity for a specified period of time before you begin receiving income payments.
By doing this, you avoid the assessment of penalties, such as surrender charges.
Indexed annuities are different.
An indexed annuity earns interest based on changes in an external market index.
This is different from traditional annuities, in which credit interest calculated at a fixed rate.
The selected index varies from day to day and is not predictable.
When you buy an indexed annuity you own an insurance contract – you are not buying shares of any stock, bond, or index fund.
Many indexed annuities also give contract owners the option to allocate premium to a traditional fixed interest option, where interest is credited at a fixed rate of interest not based on any external index.
To summarize, an indexed annuity offers contract owners:
- The potential for growth through interest earned based on the performance of a nationally recognized index or indexes (Interest earned on an indexed annuity could be more or less than the interest earned in a traditional fixed annuity.)
- A guaranteed minimum value
Allianz Pro V1 Annuity starts by providing accumulation potential.
Allianz Pro V1 Annuity lets you benefit when the bond index goes up.
The Barclays Capital U.S. Aggregate Bond Index and PIMCO US Advantage Index are respected indexes that track the performance of bonds and other fixed-income investments.
When the bond index increases, the value of your Allianz Pro V1 Annuity can increase.
Your contract can also earn interest in a fixed allocation.
Accumulation value.
Your accumulation value is equal to the premium paid plus 100% of any interest credited, minus any withdrawals.
Your accumulation value is available for annuity payments after one year or as a lump-sum withdrawal after only six years.
Allianz Pro V1 Annuity offers you guaranteed principal protection.
The annuity protects your principal and locks in interest automatically.
With Allianz Pro V1 Annuity, your principal is never subject to loss due to index decreases.
Once any indexed interest or fixed interest is credited to your contract, it can never be lost due to index volatility.
A downturn in the index cannot reduce your contract values.
We guarantee it.
There are no upfront sales charges.
100% of your premium is credited to the accumulation value when your contract is issued.
However, there is a surrender charge if you surrender your contract in the first six years.
Surrender charges may result in the loss of all or part of any interest earned and a partial loss of principal.
Allianz Pro V1 Annuity includes a death benefit.
If you pass away before you begin annuity payments, your beneficiary will receive a death benefit.
The accumulation value is available to your beneficiary as a lump-sum withdrawal or as annuity payments over at least five years.
The death benefit, paid to a properly designated beneficiary (other than an estate), will pass without the costs and delays of probate.
Allianz Pro V1 Annuity lets you make choices.
Allianz Pro V1 is a single premium deferred indexed annuity.
When you purchase your Allianz Pro V1 contract you can choose to allocate your money to
- two bond index allocations,
- a fixed interest allocation,
- or a combination of all three.
Here’s how the bond index allocation works.
As we mentioned earlier, indexed interest is calculated and credited annually based on changes in your chosen bond indexes.
You can choose from the Barclays Capital U.S. Aggregate Bond Index and/or the PIMCO US Advantage Index.
We calculate your indexed interest using an annual point-to-point crediting method.
That means we capture the value of the bond index on the last business day before your contract is issued, as well as on the last business day before each contract anniversary.
Because your contract has a 100% participation rate, we use the entire annual change in the index when we calculate the indexed interest rate.
The annual change is divided by that contract year’s starting bond index value to get the percentage of change.
Next, we subtract your contract’s annual spread from the percentage of change and the result is your indexed interest rate for that year.
There is no contractual limit or maximum on the amount of indexed interest growth possible with this crediting method.
However, there is an annual spread, which is a deduction used to determine the indexed interest rate.
We can raise or lower the spread annually, but it will never be greater than 8%.
If the percentage of change is negative, the indexed interest rate for that year will be zero but your contract will not lose any value.
You can also choose a fixed interest allocation.
For this allocation, traditional fixed interest is calculated and credited daily based on rates we establish.
We credit interest to your accumulation value daily at an annual effective rate equal to the current credited rate.
Current credited rates are declared at the beginning of each contract year.
We can raise or lower the current credited rate annually, but it will never be less than .25%.
You can change your allocations each year.
You can allocate all of your money into one option or you can divide and allocate it in 1% increments among the three options.
You can also change your allocations each year.
Shortly after each contract anniversary, we’ll notify you that you can change your allocations.
If we receive your changes within 21 days after your contract anniversary, they will be effective during that contract year.
Allocation changes received more than 21 days after your contract anniversary won’t take effect until your next contract anniversary.
Allianz Pro V1 Annuity gives you several ways to access your money.
Take free withdrawals.
You can take up to 10% of your contract’s single premium each year in one or more free withdrawals.
You can begin taking free withdrawals immediately in your first contract year.
A free withdrawal is eligible to receive indexed interest at the end of the contract year.
The amount of interest is based on the applicable interest rate and the length of time that the free withdrawal amount remained in the allocation during that year.
If you take out more than 10% of your contract’s paid premium in a contract year, a partial surrender charge will apply to the amount exceeding 10%.
If you surrender your contract during the first six years, we will retroactively apply a surrender charge to any free withdrawals you took earlier in that contract year.
Surrendering your contract before the seventh contract year could result in a loss of interest and a partial loss of principal.
Withdrawals reduce contract values and the value of any income and death benefits.
Contract loans
A contract loan may be taken for up to 50% of the cash surrender value (maximum of $50,000).
The loan interest rate is 7.4% annually in advance.
Loans are not available with IRA, SEP, or some other qualified plans.
Unpaid loans will be treated as partial surrenders, subject to surrender charges, and will decrease the value of the contract and its death benefit.
A word about taxes
Your contract values grow tax-deferred.
However, any distributions from your contract, including free withdrawals, loans, and required minimum distributions, may be taxable as ordinary income.
Because annuities are meant to be used for longterm purposes, if you are under age 59½ when you take a distribution, it may be subject to a 10% federal additional tax.
Choose from a variety of options to receive steady, predictable income.
Several annuity payment options are available to you.
After the first contract year, you can choose to begin annuity payments based on your accumulation value at any time.
Annuity payments are paid to you over a period of time, in any of the following ways:
Interest only
You have the option to receive interest-only annuity payments for five years.
Interest will be paid as earned based on the amount of your accumulation value.
After five years of interest-only annuity payments, you can take your full accumulation value as a lump-sum withdrawal or select another annuity option.
Installments for a guaranteed period
You can choose to receive annuity payments in equal installments for a period from 10 to 30 years.
Or, at certain higher ages, you may request this value in equal installments for a guaranteed period of less than 10 years.
Installments for life
You have the option to receive annuity payments in equal installments for the rest of your life.
Annuity payments end upon your death.
Installments for life with a guaranteed period
You can choose to receive annuity payments in equal installments for the rest of your life.
Upon your death, annuity payments will be paid to your beneficiary for the balance of a guaranteed period of five, 10, 15, 20, 25, or 30 years.
Installments of a selected amount
You may receive annuity payments in equal installments of an amount that you choose, as long as the annuity payments last for at least 10 years and no more than 30 years.
Annuity payments continue until your accumulation value is gone.
Joint and survivor
You can have equal installments paid until your death; then they will continue to be paid to your survivor.
In this case, you can select 100% or 2⁄3 of your annuity payment amount to be paid to your survivor until their death.
Payout Factors
The payout rate used to determine the annuity income stream depends on the age of your contract, the age of the annuitant, and the annuity payment option selected. The payout rate is guaranteed to be at least 1%.
