Allianz 222 Fixed Indexed Annuity Review
This review is on the Allianz 222 Annuity. The Purpose of this review is to show you where Allianz 222 Annuity is strong and where it has weaknesses, so that you can make an informed decision, considering all available facts.
- Product type
- Investment options that are available and their Realistic long term investment return expectations
- Understanding the income rider
- How it can best help you as part of your financial plan
Allianz 222 Annuity Quick Facts
|Issuer||Allianz Life Insurance Company|
|Type of Product||Fixed Indexed Annuity|
|Standard & Poor’s Rating||“AA” (Very Strong)|
Is any of this true?
The Allianz 222 Annuity is definitely unique and is strong when it comes to the potential the annuity has to deliver over time. It has unique features that most annuities in the industry don’t have. Some of these features are very attractive in my opinion, but there’s also the caveat of having to defer for a minimum of 10 years and with weaker minimum guarantees, so it’s not for everyone.
The Allianz 222 Annuity has 2 types of Bonus’s. First, is on deposit, they give you a 15% Protected Income value bonus. Second, is a 50% bonus to the protected income value on all interest credits. For example, if you earn 3% in interest, they credit 4.5% to your income value. The Allianz 222 Hybrid annuity must be differed for 10 years before taking lifetime income. It’s possible that you can take free withdrawals in the mean time. You’ll receive a withdrawal rate percentage based on your age of the protected income value. If you choose joint lifetime income withdrawals, the lifetime income withdrawal percentage will be based on the age of the younger spouse.
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Before we go in the details, here is an important legal disclosure.
This is an independent review at the request of readers. So they could see my perspective when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Allianz has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances. This is not meant to be specific advice. Your advisor may know more about your circumstances to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.
Some information on Allianz
Allianz Life Insurance Company of North America (Allianz) is a leading provider of retirement solutions, including fixed and variable annuities and life insurance for individuals. Variable annuity and variable life insurance guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.
There are a few ways that Agents might pitch this product.
- To get guaranteed Lifetime income that has the potential to increase
- Get uncapped market growth with zero downside risk
- Create a lifetime guaranteed income that can increase over time
- To get a 15% bonus to the income value and 50% bonus’s on interest earned
The best part about this annuity is…
For you to truly be able to receive income that increases overtime, without ever making new highs in value. This ability to increase your income plays a huge role in benefiting and adding to your retirement. Though, it has a lot of potential, the guarantee’s are weaker than most annuities, but for those looking for upside income potential with a downside floor, then this may be your annuity. Another part that’s unique is that the protected income value is available as a death benefit at no additional cost.
This annuity is a long term commitment with high penalties if you take you’re money out early.
The penalties are below.
What are the minimum guarantees for the Allianz 222 Annuity?
On the other hand, this is where this annuity is weakest. It doesn’t have a “guaranteed” increase like some other annuities in the market place. If a 61 year old male differed the annuity for 10 years and received no interest credits, his guaranteed income in year 11 would be $6,325 annually for life. This is a very unlikely scenario, but it shows that there’s no guaranteed increase. This increase is offset by the special way in which the income increases work. Unlike most annuities, you’re able to get an increase income, even if the accumulation value doesn’t increase above the income value. This has the potential to help deliver more income overtime.
What type of Performance can I expect from the options inside the Allianz 222 Annuity ?
If you’re looking for high growth, you’re going to be recommended the uncapped Barclays index. Uncapped index!? That means there is no cap to the amount of interest you can earn! wow unlimited upside with zero downside! …..Not so fast. You must understand the details. The index moves between 50% bond and 50% stocks, depending on volatility. There’s a spread, which subtracts from the return. The current spread has been increasing and is currently 2.95%. This is subject to change, so please check before you buy. Therefore, if the index returns 10%, you subtract the spread, which is 10% minus 2.95, so you’d be credited 7.05%.
While Allianz is no longer using back tested 1980’s and 1990’s performance. Performance with the current spread over the last 10 years has averaged 3.18% annually with the uncapped option.
Moreover, there are other investment options as well such the Barclays Dynamic Index with cap. Currently the cap is 3.5%. This is subject to change at any time. The Barclay’s index has historically been the best performers of all the options.
This annuities performance is closer with the performance of bonds than stocks. Also, it has much less downside risk and volatility than stocks, so that’s important to consider. Where the 3% get’s more exciting is on the income increases. For example, if you average 3% while taking income, that means you’ll get a 4.5% increase to your income, which is a very good COLA. This ability to increase is what I like the most about this annuity. And is very powerful. This is likely to help people with long life expectancy’s the most.
Annuity Edu’s Summary on the Allianz 222 Annuity
Where it works best:
- If you have 10 years to defer income and want the ability to have increasing income
- producing a pension like lifetime guaranteed income stream that has the potential to increase
- Looking for conservative growth and want to have a guarantee on their principal over a 10 year investment.
- Looking for a enhanced death benefit on the protected income value to pass money to beneficiary’s.
Where it works Worst:
- For those who need guaranteed lifetime income before 10 years
- For those not looking for guaranteed lifetime income
- those looking for moderate to high Capital appreciation
- For those who need to earn more then 5% on the accumulation value
Overall, I think this annuity has some good features and some bad ones. The Annuity has a strong 15% bonus on the income value and the ability to have increases income makes potential for the amount of money that it can deliver to your overtime, which is much higher than most annuities. What concerns me is the recent decreases in cap rates and increases in the spreads, which take away from the return you’ll receive. Another main weakness is the lack of guarantees this annuity has. It’s important to understand these numbers going in. Buying an annuity is along term commitment and it’s important to test this annuity versus various others to see which one fits your goals and objectives the most. This is something we do for free here at Annuityedu.com.
We’ll use our proprietary calculator to illustrate for you how this annuity will likely perform in your specific situation.
Click here to Test my Annuity, If your agent was honest with you, the numbers will match up – if not, well at least you know before you buy.
Unfortunately, I think advisers may be overestimating the returns you’ll receive. That’s why we can help you test the guarantee in your financial plan and for the internal rate of return it provides and see if your plan can handle it. This isn’t to say that having the Allianz 222 may not be a good way to meet your financial objectives with a portion of your dollars. It might, but it’s only possible after testing it that you’ll know.
Have Questions on Allianz 222 Annuity? Have any comments?
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Purchasing an annuity is often an irreversible decision and usually you will have high surrender fee’s if you decide to change your mind after you buy it.
We hope you found it helpful as you’re conducting your own research Allianz 222 Annuity. We wish you all the best in your retirement journey!
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