Allianz Life’s New FIA An Accumulation Play

Allianz Life’s Accumulation Advantage fixed indexed annuity (FIA) is designed to capture the appeal of advisors as they shift their FIA marketing efforts from income to accumulation.

Accumulation Advantage offers indexed interest allocation options based on the S&P 500 index, the PIMCO Tactical Balanced Index, the Bloomberg US Dynamic Balance Index II and the BlackRock iBLD Claria Index.

S&P, Bloomberg and PIMCO indexes are offered with other Allianz Life FIAs, but the BlackRock index is the latest volatility control tool – unique for its ability to readjust the weight of index components based on BlackRock’s forward-looking view of the market environment, said Matt Gray, senior vice president of product innovation for Allianz Life.

“Black Rock is the new index here,” Gray said.

Allianz Life has also added BlackRock’s iBLD Claria Index to newly issued Allianz 222 Annuity and Allianz 360 Annuity contracts, the company said.

Product Details

Volatility control indexes, as the very name suggests, smooth out the highs and lows of the market to earn a more consistent return. After delivering returns of about 20 percent last year, the markets have turned decidedly more volatile since late January.

Participation rates and spreads on volatility control indexes are considerably more attractive than those offered on plain vanilla indexes like the Standard & Poor’s 500 index.

Two annual point-to-point crediting methods are available on the new index, the company said.

Initial minimum premium is $20,000 and maximum premium is $1 million without approval, with issue ages from 0 to 80 years old.

But the accumulation features aren’t the only notable items in the latest addition to the Minneapolis-based company’s FIA lineup.

Except for two states that also require a paper application option, Accumulation Advantage is only available through an electronic application process in the 45 states in which it is sold, Gray said.

Upping the Excitement Quotient

Retail agents like Allianz Life’s choices of indexes and index providers available with income-focused FIAs, but adding indexes to an accumulation-focused FIA upped the excitement quotient.

Independent marketing organizations (IMOs) that help independent agents and IMOs that wholesale to broker/dealers are the main distribution channels for Accumulation Advantage, which comes with a 10-year withdrawal charge period.

Some FIAs come with shorter withdrawal charge periods, particularly in the wake of new fiduciary rules, but the thinking behind a 10-year withdrawal charge was to maximize the accumulation potential of the FIA so that it delivers higher yields.

“We just felt it was the best balance to create an accumulation engine,” Gray said.

Despite volatile sales last year, indexed annuities bounced back in the fourth quarter with sales rising 5 percent to $14.7 billion compared with the year-ago period.

FIA sales in 2017 fell 5 percent to $57.6 billion compared with record sales in 2016. Market forecasts call for FIA sales to grow by 5 percent to 10 percent this year over 2017.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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