Many Americans are stressed out about their finances. With increased cost of living, market volatility and other economic factors, they are worried about how they will fare in retirement.

In fact, at the end of 2023, 40 percent of Americans said they are more stressed than they were last year, according to the New Year’s Resolutions Study from Allianz Life Insurance Company of North America (Allianz Life). That’s up from 34 percent at the end of 2022.

Americans want to find ways to relieve financial stress. A financial strategy that helps manage risk and volatility could help protect their journey through retirement.

Our lineup of products is designed for just that–to provide a level of protection. Here, we’ll address how our products can help mitigate risks like the rising cost of living and market volatility for a smoother retirement.

Protecting against rising cost of living
While inflation has slowed since recent highs, the cost of living does continue to increase. Because even in times of modest inflation, every dollar saved for retirement purchases less year after year. That’s why Allianz Life fixed index annuities (FIAs) and registered index linked annuities (RILAs) and fixed index universal life (FIUL) policies all offer innovative opportunities to help address this risk.

Our annuities offer increasing income potential that can help address the rising cost of living. Allianz FIAs and RILAs both offer guaranteed lifetime income that can increase each year the annuity earns a credit through either built-in or additional-cost riders.

Allianz FIUL policies also can help hedge against inflation with features like accumulation potential through indexed interest and Index Lock. Since inflation often coincides with rising interest rates, that typically creates an environment for raising the participation rates and caps on FIUL policies. This brings more accumulation potential to clients.

For our FIA contracts with increasing income potential, 90 percent have received an increase.¹ This “annual reset method” for increasing income means that income will increase by the same percentage every year interest is credited. Previous lifetime income withdrawals, fees or index losses don’t factor in. This method, available with Allianz income benefits, often results in a client receiving more opportunities for income increases. For many Allianz FIA contract holders, their income has not only kept up with inflation but their purchasing power has increased over time.²

Rising cost of living includes medical costs too. As we celebrated our 10-year RILA anniversary in 2023, we enhanced our products with additional index options and features that can help retirees pay for certain long term care expenses.

The new Income Multiplier Benefit on the Allianz Index Advantage+ Income Variable Annuity is a unique feature that allows clients to withdraw up to twice their annual maximum income payment to pay certain acute and long term care needs or they could use it for any other desired objective. Income Multiplier Benefit is automatically with the contract, and with no separate fee other than the income benefit rider fee. The Income Multiplier Benefit is not a substitute for long term care insurance.³

Protection from market volatility
Nobody can predict the market. Allianz knows that timing the market rarely works out, so our products have features that help protect assets during periods of volatility.

Many of our products have a lock feature that gives clients the opportunity to lock in gains at any time once during a crediting period. With Index Lock (available with select index options in our FIAs and FIUL products), you can lock in an index value, track and view the index values online, and help minimize the effects of market volatility throughout the year. We also have Auto Lock⁴ that, when activated, automatically locks in when an index reaches a set target.

Many of our clients take advantage of these features to lock in index gains. Among our FIUL policies with an active Index Lock, the average locked-in value is 10.78 percent. On our FIAs, the average credit among account values with an active Index Lock is 6.3 percent.⁵

While Performance Lock6 has been a feature of Allianz RILAs for several years, we added an Early Reallocation feature also called Lock and Get Back In this year. This feature allows clients who have executed a Performance Lock to reallocate their locked index option values, beginning a new term without having to wait until the next index anniversary. Rather than remaining locked through the end of the index year, clients can get back in and participate in index returns. Allianz also added a new Index Dual Precision Strategy and bigger buffers on Index Performance Strategy to products in our Allianz Index Advantage+ RILA suite. The Index Dual Precision Strategy offers growth potential in not only a positive or zero market, but also in a down market if the negative index return is within the 10 percent buffer amount. This helps our Allianz Index Advantage+ products to offer growth potential with a flexible level of protection on the downside with enhanced functionality.

Similarly, Allianz FIUL policies have unique features that help provide some insulation from market volatility, including guarantees for the accumulation value.

That means you have the ability to react in a volatile market, but you aren’t trying to time the market.

Your protection partner
With the increasing stress and mounting worries, many Americans are more likely to seek out financial guidance in the coming year. The shifting dynamics of retirement mean that financial professionals are more important now than ever. Allianz wants to be a partner for you to provide more than just a product to your clients. We know that the distribution landscape is changing. But, whether you work for an entity that is independent or owner, Allianz wants to help you provide value to clients. Allianz products help address some of Americans biggest retirement fears like outliving their money. And, ongoing economic uncertainty is affecting how Americans feel about their long term financial strategies. Finding ways to help clients take part in the market while mitigating risks can be important.
Allianz wants to be a part of your client’s financial strategies to help provide reassurance and weather market downturns over the long term. The growth potential and levels of principal protection in FIAs, RILAs and FIUL policies can strengthen the outcomes of a holistic financial strategy and help manage risk.

Allianz continues to strive to help deliver levels of protection to your clients. Allianz products that address risk can play a pivotal role in helping clients protect their well-earned retirement. We believe that FIAs, RILAs and FIUL will continue to resonate with your clients in the New Year. And, we will continue to evolve to create new and updated products.

Looking ahead to 2024, we believe clients will continue to seek a financial strategy that helps them manage risks and volatility for a smooth ride through retirement. Insurance products like annuities and fixed index universal life insurance will continue to play an important role in those strategies to help ease some of the biggest worries about preparing for long term financial stability. We’re committed to being your partner for protection in the year ahead.

*Allianz Life conducted the 2023 New Year’s Resolutions Study online in November 2023 with a nationally representative sample of 1,005 Respondents age 18+.

Annuities can help you meet your long term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement.

Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.

Products are issued by Allianz Life Insurance Company of North America. Variable products are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA.

This content does not apply to the state of New York.

RILAs are subject to investment risk, including loss of principal, and contract values fluctuate daily. Investment returns and principal value will fluctuate with market conditions so that units, upon distribution, may be worth more or less than original cost.

Withdrawals will reduce contract values (including any Cash Value) and the value of any potential protection benefits. Withdrawals taken within the period stated in the prospectus will be subject to a withdrawal charge or a Market Value Adjustment (MVA), depending on the product.

All withdrawals are subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10 percent federal additional tax.

For more complete information about registered index-linked annuities and the variable option, call Allianz Life Financial Services, LLC at 800.542.5427 for a prospectus. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about the index variable annuity and the variable option, which your clients should carefully consider. Encourage your clients to read the prospectuses thoroughly before sending money.

For financial professional use only.

Reference:

1. The total number of contracts used for this analysis was 42,416 and represents any increase of any amount in a given year. This data reflects fixed index annuities, which elected a withdrawal option using the annual reset increase method from 1/1/08 through 12/31/21, and would have been eligible to receive interest credits from 1/1/09 through 12/28/22. Past increases do not guarantee future increases.
2. With Allianz, your lifetime income payments will continue for the rest of your life, as long as you follow the terms of your contract. And, every time you get a payment increase, that new higher payment is guaranteed for the rest of your life.
3. Double income payments come from the Income Multiplier factor. We establish the Income Multiplier Benefit wait period and the income multiplier factor on the date the clients sign the application provided we receive the initial Purchase Payment within the required time period. Income Benefit supplements with terms for each Allianz RILA with Income Benefit can be found at www.allianzlife.com/rates.
4. Auto Lock feature may be discontinued at any time.
5. Average locked interest rate for clients who applied the Index Lock feature between Sept. 9, 2019 and Nov. 22, 2022. The total number of contracts used for this analysis was 7,970 and both one-year and two-year crediting methods were included. Potential interest varies by index strategy and index. Past results are not a guarantee of future performance. Exercising an Index Lock may result in a credit higher or lower than if the Index Lock had not been exercised. We will not provide advice or notify you regarding whether you should exercise an Index Lock or the optimal time for doing so.
6. Executing a Performance Lock or Early Reallocation may result in you receiving less than the credit you would have received had you not locked the Index Option. It is possible to lock in a negative return. We will not provide advice or notify you regarding whether you should execute a Performance Lock or Early Reallocation, the optimal time to do so, or if you execute a Performance Lock or Early Reallocation at a suboptimal time. We are not responsible for any losses related to your decision whether or not to execute a Performance Lock or Early Reallocation.