Allianz Index Advantage Income ADVSM provides the opportunity to grow retirement assets with a level of protection for the invested principal, and deliver guaranteed lifetime income during retirement.
Registered Index Linked Annuities (RILAs) were first introduced by AXA (now Equitable) in 2010, and are now offered by multiple carriers. In 2020, RILA sales increased 38% ($4.8B) between Q1 and Q2, more than any other annuity product type. Concerns about equity market volatility may be one of the key factors contributing to this significant increase in RILA sales.
Why DPL Likes Index Advantage Income ADVSM
Index Advantage Income ADVSMis designed to give you much greater growth potential than a fixed indexed annuity product, but still offers a level of protection on the downside. You have the ability to either eliminate the tail risk of losses or eliminate the first losses that occur.
Index Advantage Income ADV allows for the selection of multiple index strategies. Each index option is the combination of a crediting method (known as an index strategy) and an index. Index strategies range from performance-focused to protection-focused, which clients can move between annually.
Unlike other RILAs, Index Advantage Income ADV offers a guaranteed lifetime income component. Advisors can utilize Index Advantage Income ADV to help protect a portion of the portfolio, and then convert the accumulated values into a stream of guaranteed lifetime income. This helps address client spending requirements in retirement, while helping reduce the need for additional spending from the portfolio.
How to Think About Commission-Free RILAs
RILAs fall in the middle of variable annuities and fixed indexed annuities in terms of risk tolerance. Investors may utilize RILAs for equity allocations to capture upside while reducing portfolio risk, as these products often provide cushion against major market losses.
When your client needs:
PRINCIPAL PROTECTION: RILAs are typically used for clients nearing retirement. They offer a level of protection against sequence of returns risk, while also providing the potential for higher returns due to higher cap rates than other structured insurance vehicles.
EQUITY ALLOCATION: RILAs can be utilized to provide a level of protection to an overall portfolio while still providing market exposure.
GUARANTEED LIFETIME INCOME: Some RILAs can be used to generate guaranteed lifetime income through a living benefit, offering competitive payout rates and the potential to increase income in retirement.2
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2Optional living benefits may come at an additional cost.
As with any investment vehicle, index variable annuities are subject to risk - including possible loss of principal. Investment returns and principal will fluctuate with market conditions so that contract values, upon distribution, may be worth more or less than the original cost.
Purchasing a variable annuity within a retirement plan that provides a tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. A variable annuity should be used to fund a qualified plan based upon the variable annuity’s features other than tax deferral. All variable annuity features, risks, limitations, and costs should be considered prior to purchasing a variable annuity within a tax-qualified retirement plan.
For more complete information about Allianz Index Advantage Variable Annuity and the variable options, contact Allianz Life Financial Services, LLC 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 options, which your clients should carefully consider. Encourage your clients to read the prospectuses thoroughly before sending money.
Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America and do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.
• Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF
Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. Variable products are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297 (L40538)
Product and feature availability may vary by state and broker/dealer.