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Allianz Life Insurance Company of North America
FIXED INDEX ANNUITIES
Allianz 222 ® Annuity Protection and flexible benefits
Contents
OVERVIEW
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Fixed index annuities offer additional benefits.
PAGE 1
Options as you plan for retirement
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TWO WAYS TO EARN INTEREST
PAGE 3
TWO TYPES OF BONUSES
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Protected Income Value premium bonus Protected Income Value interest bonus
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Accumulation value
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TWO WAYS TO RECEIVE INCOME INCREASES
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Income for life
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Help pay for care
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Annuitize your contract.
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A CLOSER LOOK
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Accumulation potential and income increases Increasing income potential Protection and flexibility
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PAGE 7
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QUESTIONS AND ANSWERS
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ABOUT ALLIANZ
BACK COVER
Why consider an annuity? Buying an annuity is one way to help build your retirement assets. Annuities offer principal protection and potential interest to help you accumulate money for your retirement. The money in your annuity can grow tax-deferred, which may help your savings accumulate faster. 1
Fixed index annuities offer additional benefits. In addition to the benefits we’ve just discussed, a fixed index annuity has the potential to earn interest based on changes in an external market index. This is different from traditional fixed annuities, which credit interest calculated at a fixed rate set in the contract. Because the chosen market index varies daily and is not predictable, the interest you earn through a fixed index annuity could be more or less than the interest from a traditional fixed annuity. Many fixed index annuities also let you allocate premium to a traditional fixed interest option, where interest is credited at a fixed rate. Regardless of whether you choose fixed interest, indexed interest, or a combination of both, an annuity’s benefits can make it a valuable part of your overall retirement strategy.
Annuities also offer valuable guarantees and death benefit protection. If you surrender your contract, you’ll receive at least a guaranteed minimum value. And because annuities are insurance products, they can give you the reassurance of knowing that your beneficiaries will get a death benefit if you pass away before you start receiving annuity payments. Finally, annuities give you several income options once you’re ready: You can receive income as a single payment, as regular payments over a specific period of time, or even as income for life. These are just a few of the reasons why many people rely on annuities to help them achieve their long-term financial goals.
1 Distributions from your annuity may be subject to surrender charges and market value adjustments (MVAs). Distributions are also subject to ordinary income tax and, if taken before age 59½, a 10% federal additional tax may apply. Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America (Allianz). This content is general information for educational purposes, and is not intended to constitute fiduciary advice. Please consult your financial professional for a specific recommendation about purchasing this product.
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ALLIANZ 222® ANNUITY
More options as you plan for retirement Like many people, you may be considering several strategies to help you reach your retirement goals. Allianz 222® Annuity can be a valuable addition to your retirement portfolio for several reasons.
First, Allianz 222 ® Annuity gives you the potential to earn interest in two different ways: You can earn interest based on your choice of several index options, or you can choose to receive fixed interest. Second, you can receive a bonus 1 on the Protected Income Value (PIV) of your annuity – which we describe later in this brochure – in two ways. You’ll receive a premium bonus on any premium you place in your annuity in the first 18 months. You’ll also receive an interest bonus which will result in a credit of 150% of any fixed and/or indexed interest earned for as long as you have your contract. Third, you can receive lifetime withdrawal income increases in two ways once income withdrawals begin. The income from your PIV will increase each year based on the interest rate credited to your allocations, multiplied by the 150% interest bonus factor.
And if you should later be confined to a nursing facility, hospital, or assisted living facility, or become unable to perform two of six activities of daily living (ADLs), you can receive up to double your annual maximum income withdrawal with the Allianz Income Multiplier Benefit rider. 2 Finally, Allianz 222 ® Annuity gives you two death benefit options. Your beneficiary(ies) can receive the full accumulation value as a lump sum (this option doesn’t include any bonuses). Or, they can receive the PIV 3 – including the premium and interest bonuses – in payments over a minimum of five years.
1 The premium bonus and interest bonus are credited only to the Protected Income Value (PIV). To receive the PIV, including the bonus, the contract must be held for at least 10 contract years, and then lifetime income withdrawals must be taken. You will not receive the bonuses if the contract is fully surrendered or if traditional annuitization payments are taken. If the contract is partially surrendered the PIV will be reduced proportionally, which could result in a partial loss of bonuses. Income withdrawals are considered partial withdrawals and are subject to ordinary income tax and, if taken prior to 59½, a 10% federal additional tax. Because this is a bonus annuity, it may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don’t offer a bonus feature. 2 To receive the Allianz Income Multiplier Benefit you must be confined to an eligible hospital, nursing facility, or assisted living facility for at least 90 days in a consecutive 120-day period. Confinement must occur after the first contract year and either during the contract year before the start of lifetime income withdrawals or at any time thereafter. The six activities of daily living are eating, bathing, dressing, toileting, transferring, and continence. Note: The Allianz Income Multiplier Benefit is not available in Hawaii and Connecticut. 3 In Alaska, Idaho, Illinois, Maryland, New Hampshire, New Jersey, North Carolina, Ohio, Pennsylvania, Texas, Utah, and Washington, the PIV death benefit is subject to a limit. The greater of 125% of the cash surrender value, or total premium credited at 10% interest per year, but not exceeding 250% of the total premium (less withdrawals). Withdrawals are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal additional tax. 2
You can earn interest two ways. Because it’s a fixed index annuity, Allianz 222 ® Annuity gives you the potential to earn indexed interest based on changes in your choice of several indexes and crediting methods. Crediting the contract does not directly participate in any stock, bond, or investments. You are not buying any bonds, shares of stocks, or shares of an index.
Choose indexed interest, fixed interest, or a combination of both.
methods determine how much interest your annuity earns, based on the changes in an external market index. Or, if you prefer, Allianz 222 ® lets you receive fixed interest instead. Allianz calculates and credits fixed interest daily, based on the rate we establish at the beginning of each contract year.
Keep in mind, however, that if you surrender your contract before your 10 th contract anniversary, we will apply a surrender charge and an MVA, and you may lose some or all of your previously credited fixed/indexed interest (including any bonuses) and a partial loss of principal.
You can also choose to receive a combination of fixed and potential indexed interest.
To learn more about allocation options available on Allianz 222®, ask your financial professional and consult the Index Allocation Options Guide (M-7214-1).
But regardless of how you choose to receive interest, the money in your annuity, including any bonuses, is never at risk due to market index volatility. That’s because, although external market indexes may affect your contract values,
The indexes available within the contract are constructed to keep track of diverse segments of the U.S. or international markets, or specific market sectors. These indexes are benchmarks only. Indexes can have different constituents and weighting methodologies. Some indexes have multiple versions that can weight components or may track the impact of dividends differently. 3
ALLIANZ 222® ANNUITY
You can receive two types of bonuses
Your Allianz 222® Annuity has a Protected Income Value (PIV) that is specifically designed for taking lifetime income withdrawals
We establish the PIV on the day we issue your contract and it equals 100% of the initial premium you pay into your annuity. In addition, the PIV can be credited with two types of bonuses. Please note that the PIV is only available as lifetime income withdrawals after you have held your contract for at least 10 contract years. Protected Income Value premium bonus We’ll credit your PIV with a bonus on all premium you place in your contract in the first 18 months. For the current bonus amount, available on Allianz 222 ® , ask your financial professional. Protected Income Value interest bonus Allianz 222 ® also offers an interest bonus. After we determine your allocation interest, we multiply it by the 150% interest bonus factor and credit it to your Protected Income Value. So, if your allocations earned 3% interest for the year, we would actually credit 4.5% interest to your PIV (3% × 50% = 1.5%; 3.0% + 1.5% = 4.5%). 1 We then credit your allocation(s) interest plus the interest bonus to your PIV.
If you allocate money to the fixed interest allocation, we multiply the annual fixed interest rate by the 150% interest bonus factor to determine the PIV annual fixed rate for that year. Then, we credit fixed interest daily based on that rate. Regardless of the allocation option(s) you choose, Allianz will credit the interest bonus each year in which your allocation has positive interest. Accumulation value Allianz 222 ® also has an accumulation value that is equal to your total premium paid plus 100% of any interest earned from your chosen allocations, less withdrawals, charges for any optional riders you select, any applicable allocation charges and surrender charges, and adjusted by any MVAs. The accumulation value does not include any bonuses and is available as a lump sum anytime after 10 contract years, or for standard annuity options after five years. 2
1 This is a hypothetical example only and is not intended to predict or project future interest results. 2 Owners at older ages may have the opportunity to annuitize the accumulation value minus any bonuses sooner and over a reduced period of time via the Flexible Annuity Option Rider (in most states). 4
Two ways to receive income increases
Allianz 222® Annuity provides income for life – plus an opportunity for payment increases. When you are ready to begin income withdrawals (anytime after 10 contract years), you can access your PIV in the form of payments that last as long as you live. The initial annual maximum amount is a percentage of your Protected Income Value and is based on your age when payments begin. You also have the flexibility to take less than your annual maximum each year. We keep track of the amount left over in your contract’s cumulative withdrawal amount. You can choose to take lifetime income withdrawals beginning at age 60. If joint lifetime withdrawals are chosen, the age of the younger person will be used.
Your income can also increase to help pay for your care
Allianz 222 ® comes with a built-in benefit rider that can increase your income withdrawals when you may need it most. The Allianz Income Multiplier Benefit 1 rider allows you to withdraw up to double your annual maximum if you become confined to a qualified hospital, nursing facility, or assisted living facility for at least 90 days in a consecutive 120-day period or if you are unable to perform at least two of the six activities of daily living (ADLs):
• Bathing • Dressing • Toileting
• Continence
• Eating
• Transferring
To be eligible for this benefit, you cannot be confined prior to your first contract anniversary. To be eligible via activities of daily living, a physician must certify that you are unable to perform at least two of the six ADLs. Diagnosis must occur during the contract year prior to beginning lifetime income withdrawals or any time thereafter. The benefit is available after the 10 th contract year, and lifetime withdrawals must be taken to receive the increased annual maximum. The Allianz Income Multiplier Benefit 1 rider will terminate when the contract or the Protected Income Value rider terminates, or on the contract anniversary on or after the date on which the accumulation value equals zero or the patient fully recovers. You can also annuitize your contract. You can choose to receive annuity payments based on your choice of several annuity options. If you use a traditional annuitization option after five contract years, your annuity payments are based on your accumulation value, which does not include the premium and interest bonuses. These annuity options can have certain tax advantages; please consult your tax advisor for details.
Single life payment
Joint life payment
Age
60-69
5.00%
4.50%
70-79
5.50%
5.00%
80-100
6.00%
5.50%
After your lifetime withdrawals begin, your income payments will have the opportunity to increase following each year your contract earns interest, including the 150% interest bonus factor. As long as you don’t take other withdrawals, your payment is guaranteed to never decrease.
1 The Allianz Income Multiplier Benefit is not available in Hawaii and Connecticut. Please note that Allianz Life Insurance Company of North America, its affiliated companies, and their representatives and employees do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.
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ALLIANZ 222® ANNUITY
Accumulation potential and income increases: a closer look
The following chart is intended to show you how the Allianz 222 ® Annuity works over a hypothetical 10-year period, and how it provides opportunity and protection from market volatility. The gray line shows a hypothetical index while the solid purple line shows a hypothetical Protected Income Value and the solid green line shows a hypothetical accumulation
value. They are not based on any particular index or crediting method. The dotted lines show a market index scenario in which the indexed interest rate is zero in all contract years. Please note that, while you have the opportunity for increases to your accumulation value when the index is up, you may not always receive an increase due to the crediting method calculation.
Accumulation
Hypothetical Protected Income Value Protected Income Value assuming zero interest
Hypothetical accumulation value Accumulation value assuming zero interest
Hypothetical index
Protection when the index is down
Opportunity when the index is up
Protection when the index is down
Opportunity when the index is up
Protection when the index is down
Interest bonus
Interest bonus
Interest bonus
An interest bonus could help you accumulate for retirement.
Interest bonus
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Keep in mind that this represents hypothetical results only and may not be used to predict or project future results. The illustrations shown do not represent any particular index and are not meant to be to scale or proportionate. Actual results will vary by crediting method and index allocation chosen, caps, spreads, and participation rates, as well as market conditions. No single crediting method or index allocation consistently delivers the most interest under all market conditions. With the purchase of any additional-cost riders, the contract’s values will be reduced by the cost of the rider. The contract values will also be reduced by any applicable allocation charge. This may result in a reduction of your principal in any year in which the contract does not earn interest or earns interest in an amount less than the rider charge or allocation charge.
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Increasing income potential
After you begin receiving retirement income through lifetime income withdrawals from the Protected Income Value, Allianz 222 ® Annuity also offers you the potential for increasing income. Here’s a hypothetical example that shows you how.
This example shows 10 years of lifetime withdrawal income following the initial 10-year accumulation phase when you would have purchased the annuity.
Single lifetime withdrawals
Hypothetical payment Payment assuming zero interest
Interest bonus
Interest bonus
Interest bonus
Interest bonus
Interest bonus
Interest bonus
Interest bonus
Discover the potential of increasing income.
Initial payment at the time income withdrawals begin.
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Keep in mind that this represents hypothetical results only and may not be used to predict or project future results. The illustrations shown do not represent any particular index and are not meant to be to scale or proportionate. Actual results will vary by crediting method and index allocation chosen, caps, spreads, and participation rates, as well as market conditions. Actual caps, spreads, and participation rates that could have been applied over this time frame would have been different from the figures shown in this illustration and in some cases may be dramatically higher or lower. No single crediting method or index allocation consistently delivers the most interest under all market conditions.
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ALLIANZ 222® ANNUITY
Protection and flexibility
Allianz 222® Annuity offers many other valuable benefits and guarantees.
Protection Allianz 222 ® gives you the reassurance of a death benefit – and two ways for your beneficiary to receive it. The Protected Income Value, which includes a premium bonus and any interest bonuses, is available to your beneficiary if taken as annuity payments over a period of at least five years. Your beneficiary also has the option to receive the greater of the Allianz 222 ® accumulation value, the guaranteed minimum value, or the cumulative withdrawal amount as a lump sum. Allianz 222 ® also gives you principal protection . This means that your principal and credited interest are never at risk of market losses. That’s because you’re not actually buying any shares of a stock, bond, or index – so a market downturn cannot reduce your contract values. Of course, surrender charges and MVAs may apply if you take your money out before the end of the surrender charge period. Also, the contract’s values will be reduced with the purchase of any additional cost riders and the deduction of any applicable allocation charge. Flexibility Allianz 222 ® is designed to help you accumulate savings for retirement. That’s why we give you the flexibility of making additional premium payments until the first day of the 19 th month of your contract, or until the date annuity payments begin, whichever comes first.
Access
You can also access the money in your annuity. In the contract year following your most recent premium payment, you can take up to 10% of your contract’s paid premium each contract year in one or more withdrawals free of surrender charges, MVAs, and penalties. Penalty-free withdrawals will reduce your accumulation value by the dollar amount withdrawn. Your Protected Income Value (PIV) will be reduced by the same proportion the accumulation value was reduced. If the interest rate for an indexed allocation is positive at the end of any year, we will credit indexed interest (including the interest bonus to the PIV) to your contract for any free withdrawals you took from that index allocation earlier that year. The amount of interest will reflect the proportion of the contract year that your free withdrawal remained in the indexed allocations.
Surrendering your contract may result in a full or partial loss of any interest and a partial loss of principal.
If you wish, you may also take a larger withdrawal (partial surrender). Within your contract’s first 10 years, if you take out more than 10% of your contract’s paid premium in a contract year, we’ll apply a partial surrender charge and an MVA to the amount above 10% (the excess partial withdrawal).
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Required Minimum Distributions Required minimum distributions from your Allianz annuity that is held within a tax- qualified plan (IRA, SEP, etc.) will qualify as penalty-free withdrawals. The accumulation value and the amount available for free withdrawals will be reduced by the amount of the distribution(s). In addition, the PIV will reduce by the same percentage that the accumulation value is reduced. Please keep in mind that purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity’s features other than tax deferral. Please consider all annuity features, risks, limitations, and costs before purchasing an annuity within a tax-qualified retirement plan. Note: The money you take out may be taxable . Your contract values grow tax-deferred. However, any money you take from your contract, including penalty-free withdrawals, other partial withdrawals, and required minimum distributions, may be taxable as ordinary income. Because annuities are meant for long-term purposes, if you are under age 59½ when you take a distribution, it may be subject to a 10% federal additional tax.
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ALLIANZ 222® ANNUITY
Questions and answers
When can I begin taking lifetime income withdrawals from my Protected Income Value (PIV)? After 10 contract years and after you have reached your 60 th birthday, you can request lifetime income withdrawals from the PIV on your next contract anniversary. Regardless of when your lifetime income withdrawals begin, they are considered partial withdrawals and may be subject to ordinary income tax. Can I add premium to my annuity? You may add premium to your annuity until the first day of the 19 th month of your contract, or until the date annuity payments begin, whichever comes first. You will begin to earn interest on your PIV immediately in your contract’s interim interest allocation until the following contract anniversary. At that time your additional premium will be applied to your current premium allocations. What if I want to surrender my contract? Although your annuity may permit penalty-free withdrawals on a portion of the value, to avoid penalties you’re generally required to leave your money in the annuity for a specified period of time, usually referred to as the surrender charge period. If you fully surrender your annuity contract at any time, this Protected Income Value rider and the Allianz Income Multiplier Benefit 1 rider will no longer be in force, and you will receive your contract’s cash surrender value. The cash surrender value does not include any premium bonus, interest bonus, or interest earned on the bonuses.
Can I take annuity payments instead of lifetime income withdrawals?
Yes. If you choose annuity payments, your annuity payment amount will be based on the greater of the accumulation value or the cash surrender value of your contract, not the Protected Income Value. In most cases, the Protected Income Value may provide you with an annual maximum amount that is greater than the annual annuity payment amount you would receive based on your accumulation value.
Can I cancel the protected income value rider?
You can cancel the Protected Income Value rider anytime. By canceling the rider, you forfeit the ability to receive lifetime withdrawals based on the Protected Income Value, including the premium bonus and interest bonus. Also, the Allianz Income Multiplier Benefit rider will terminate. Once the riders are terminated, they may not be reinstated. Since there is no additional charge for the PIV or AIM riders, there is no financial benefit to canceling. Can I take less than my annual maximum lifetime income withdrawal? Yes. Once you begin taking lifetime income withdrawals, you can choose to take less than your annual maximum. We keep track of the amount that’s “left over.” The amount that is left over is called the cumulative withdrawal amount and does not increase with interest earned. This feature allows you to take any or all of that remainder at any time. If the cumulative withdrawal amount should ever equal or exceed your accumulation value, the Allianz Income Multiplier Benefit 1 rider will terminate.
1 The Allianz Income Multiplier Benefit is not available in Hawaii and Connecticut. 10
What if I need to take a withdrawal? Penalty-free withdrawals are available prior to starting lifetime income withdrawals, including required minimum distributions (RMDs), according to the terms of the Allianz 222 ® Annuity. Withdrawals will reduce your contract values, including your PIV. After lifetime income withdrawals have begun, withdrawals in excess of your annual maximum will decrease the annual maximum by the same percentage that the accumulation value decreased as a result of the excess withdrawal.
What is the allocation charge? The allocation charge is applied to allocation options with the annual point-to-point and MY point-to-point crediting methods only and is deducted annually from the contract’s accumulation value, and in select states, we deduct it from the guaranteed minimum value allocated to each. This charge allows Allianz to better manage risk only in extremely challenging economic environments and pass the value of that flexibility on to you. The current allocation charge percentage is 0% and can change each crediting period on a contract year basis, however, only in specific economic environments. The maximum allocation charge percentage is 2.5%.
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ALLIANZ 222® ANNUITY
Why consider the Allianz 222 ® Annuity? Allianz 222® may be a good addition to your overall retirement portfolio if you want a premium bonus, the potential for indexed interest and interest bonuses, and retirement income with the opportunity to increase but don’t plan to receive income right away.
Allianz 222 ® Annuity offers you:
The potential for indexed interest accumulation based on changes in an external market index
A bonus to your Protected Income Value on any money you place in your annuity in the first 18 months of your contract
An interest bonus on any fixed and/or indexed interest applied to your Protected Income Value and income withdrawals
Income withdrawals for life with the potential to increase
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ASK YOUR FINANCIAL PROFESSIONAL whether Allianz 222® Annuity may be a good fit for your overall retirement strategy.
True to our promises so you can be true to yours ®
A leading provider of annuities and life insurance, Allianz Life Insurance Company of North America (Allianz) bases each decision on a philosophy of being true: True to our strength as a key part of a leading global financial organization. True to our passion for making wise investment decisions. True to building a culture where everyone feels welcomed, included, and valued. And true to the people we serve, each and every day. Through a line of innovative products and a network of trusted financial professionals, and with 3.7 million contracts issued, Allianz helps people as they seek to achieve their financial and retirement goals. Founded in 1896, Allianz is proud to play a vital role in the success of our global parent, Allianz SE, one of the world’s largest financial services companies. While we are proud of our financial strength, we are made of much more than our balance sheet. By being true to our commitments and keeping our promises, we believe we make a real difference for our clients. It’s why so many people rely on Allianz today and count on us for tomorrow – when they need us most.
Products are issued by: Allianz Life Insurance Company of North America PO Box 59060 Minneapolis, MN 55459-0060 www.allianzlife.com | 800.950.1962
Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America. Product and feature availability may vary by state and broker/dealer.
ICC16C54370-MVA, C54370-MVA, R95352-MVA
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