15% bonus EIA

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EDJ4now's picture
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Joined: 2006-02-08

A client just called me about a 15% bonus EIA, I think from Allianz.  I'm not familiar with the product (I don't have an appointment with Allianz for fixed products, and I'm not a big fan of EIA's in general).
3 questions. 
1.  Can anyone give me a very short description of what this particular annuity is?
2.  Related question, different case.  What is the Dex 5 contract?
3.  This is a new client for me with about $25,000.  She has between $1mm and $2mm with someone else, mostly in recently bought EIA's.  I haven't seen the contracts, but I believe most have very high bonuses, which I assume is going to mean either very long surrender or forced annuitization.  I think she is relatively smart, but uneducated on financial products, and the guy she is working with is a very polished salesman (who only sells very high comm EIA's).  Anyone have advice on how to educate her without making her feel stupid?  I'm afraid if I talk about these products like I normally do, she will just shut down because she won't want to face the reality that she just put 95% of her net worth into a product that forces annuitization.
Special note for BH - I don't want to know why she did something smart to do the EIA, or how much better that salesman is than me (she had it when I met her).  I think from some of your posts you and I actually use the same VA from JNL quite a bit, so please don't lecture me like you would Allreit about how annuities are the be all end all.
 

Baller's picture
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Joined: 2007-06-06

Show her this http://www.nasd.com/InvestorInformation/InvestorAlerts/Annui tiesandInsurance/Equity-IndexedAnnuities-AComplexChoice/inde x.htm?ssSourceNodeId=1108

troll's picture
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Joined: 2004-11-29

 
Endurance 15SM Annuity Overview
 
Success- a matter of endurance
 
The track to retirement can sometimes be long, with unexpected twists, turns, ups, and downs.  To help your clients maintain their perspective during this journey, they'll be well-served to have a strategy that can accommodate change and flexible enough to make those accommodations.
 
Allianz Endurance 15 Annuity can offer that kind of flexibility, providing your clients with the economic staying power necessary to remain on-course to and through their retirement years.
 
This new FIA offers exciting flexibility and growth features such as:



  • A 15% bonus and enhanced interest1

  • Up to 8% top GA Commissions

  • Monthly sum and annual point-to-point crediting methods

  • Seven indexing options including an international index

 
Endurance 15 offers your clients an accumulation potential and flexibility to help them to meet many of the challenges of life's changing times and circumstances.  With the flexible Allianz Endurance 15 Annuity:


  • Retirement income options include a lifetime income withdrawal that will never decrease

  • Provides the flexibility to meet unforeseen circumstances

  • Your clients have the ability to take their accumulation value as a whole after their 10th contract year (bonus not included)

  • Your clients' premiums and bonuses are protected from index losses

  • Your clients can receive 10% more indexed interest simply by utilizing one of the two Enhanced Partial Withdrawal payment options

  • Each year, your clients may receive indexed interest based on annual changes of one or more market indexes, subject to an annual cap

  • Any indexed interest is locked in once a year, eliminating risk due to market index losses

 
Safety
Allianz Life Insurance Company of North America is a member of the Allianz Group, one of the world's leading integrated financial services providers and the 16th largest corporation, based on revenue2.
 
When your clients begin putting together a blueprint for how they will retire, help them use the tool that will make the job easier.  Endurance 15 is flexible enough to meet the challenges of changing times and circumstances.
 
If you have any questions about the Allianz Endurance 15 Annuity, please call: 800-950-7372 for fixed annuity producers.
 
Please note: This product is not a direct investment in an index.
 
1 The bonus and enhanced interest apply to the Enhanced Withdrawal Benefit (EWB) value.  After 10 years, the EWB value may be accessed over a period as short as 10 years.  These are partial withdrawals and subject to ordinary income tax.
 
2 Fortune, July 2006

troll's picture
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Joined: 2004-11-29

Type of Premium:
 
Flexible premium first 3 years
 

Bonus:
 
15% bonus to the Enhanced Withdrawal Benefit (EWB) value on premiums received during the first 3 policy years - no bonus to Accumulation Value
 

Issue Ages:
 
0-80
 

Minimum Premium:
 
$10,000 Qualified and Nonqualified
 

Maximum Premium:
 
Prior approval may be required on cases of $1,000,000 or more. Call the FASTeam at 800.950.7372 for details
 

Current Interest Rate:
 
3.0%
 

Allocation Options:
 


  • Blended Index (contains a predefined mix of domestic and international stock indexes, and bond index)
  • FTSE International1
  • S&P 5002 Index
  • Nasdaq-1003 Index
  • Fixed interest option

 

Index Type:
 


  • Monthly sum with annual reset
  • Annual point-to-point with annual reset

 

Participation Rate:
 
100% participation rate on accumulation value, 110% interest enhancement for EWB
 

Cap:
 
Current caps will vary by allocation. Please call the FASTeam for current caps or see the Rate Watch for details
 

Threshold Level/Threshold Credit:
 
N/A
 

Fees:
 
No asset fees (including no fee for the EWB)
 

Minimum Guarantee:
 
90% of premium paid receives a guaranteed rate at issue no less than 1.5% and no greater than 3%
 

Payout Option:
 
Withdrawal of full accumulation value at the end of 10 yrs - if the EWB is used can take payout at 10% for 10 yrs or guaranteed withdrawals for life. The accumulation value can be annuitized after five years (this does not include premium bonus or interest enhancement)
 

Cash Surrender Value:
 
Greater of Guaranteed Minimum Value of the Accumulation Value less Surrender Charge
 

Loans:
 
Up to 50% of the cash surrender value (up to a $50,000 maximum)
 

Withdrawal Provision:
 
10% of premium annually
 

Death Benefit:
 
Full accumulation value as lump sum
 

Rate Lock:
 
N/A
 

Issue No Money:
 
If 100% of premium is allocated to the fixed interest option
 

Nursing Home Benefit:
 
Available in most states
 

Death Benefit Rider:
 
Available in most states
 

Systematic Withdrawal:
 
N/A
 

RMD:
 
Available in all states
 

Commissions:
 


  • Option A: First year top G.A. commission ages 0-75 is up to 8.00% and ages 76+ is up to 5%. Additional premium (years 2-3) ages 0-75 is up to 4% and ages 76+ is up to 2.5%. Trail commissions N/A.
  • Option B: First year top G.A. commission ages 0-75 is up to 5.5% and ages 76+ is up to 2.5%. Additional premium (years 2-3) ages 0-75 is up to 2.75% and ages 76+ is up to 1.25%. Trail commissions (years 2-10) is up to 0.33%. Trail commissions (years 10+) is up to 1.00%.
  • Option C: First year top G.A. commission ages 0-75 is up to 2% and ages 76+ is up to 1%. Additional premiums (years 2-3) ages 0-75 is up to 1% and ages 76+ is up to .5%. Trail commission (years 2+) is up to 1.00%.

 

Producer Perks :
 
Yes
 

Enhanced Withdrawal Benefit:
 
A 15% premium bonus is credited to the EWB, and the EWB receives 110% enhancement on all fixed and/or indexed interest earned. After ten years, your client may access the EWB value by choosing one of the following:


  • Option I: Schedule withdrawals over a period as short as 10 yrs
  • Option II: Guaranteed withdrawals for life. Initial withdrawal amount depends on client's age (joint available).

 Under both options, the annual payment amount may grow with indexed and/or fixed interest including the 110% interest enhancement. The options are treated as partial withdrawals for tax purposes and are subject to ordinary income tax. If exercised prior to age 59 1/2 a 10% federal tax penalty may also apply.
 

 

Product availability and features may vary by state
 
Please note:  This product is not a direct investment in an index.
 
1  "FTSE", "FT-SE", and "Footsie" are trademarks jointly owned by the London Stock Exchange Plc and the Financial Times, and are used by the FTSE International Limited ("FTSE") under license.  The FTSE 100 is calculated by FTSE.  FTSE does not sponsor, endorse, or promote this product and is not in any way connected to it and does not accept any liability in relation to its issue, operation and trading.
 
2  "Standard & Poor’s®," "S&P®," "S&P 500®," "Standard & Poor’s 500," and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Allianz Life Insurance Company of North America. The product is not sponsored, endorsed, or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of purchasing the product.
 
3  Nasdaq-100®, Nasdaq-100 Index®, and Nasdaq® are trade or service marks of The Nasdaq Stock Market, Inc. (which with its affiliates are the Corporations) and are licensed for use by Allianz Life Insurance Company of North America.  The product(s) have not been passed on by the Corporations as to their legality or suitability.  The product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
 

EDJ4now's picture
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Joined: 2006-02-08

Thanks!

troll's picture
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Joined: 2004-11-29

EDJ4now wrote:Thanks!
You're welcome. Let me know if I can help.

EDJ4now's picture
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Joined: 2006-02-08

I must be getting smarter, because you are being nicer.

troll's picture
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Joined: 2004-11-29

EDJ4now wrote:
I must be getting smarter, because you are being nicer.

Sounds like you've got a good grasp on the relationship between nice and smart.

Dust Bunny's picture
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Joined: 2007-05-07

EDJ4now wrote:
I must be getting smarter, because you are being nicer.

That was funny.
This sounds like a newer version of the Allianz annuity that my profit sharing people have with Allianz.  10% bonus 5% liquidity, have to annuitize over 10 years to get the full/bonus value.  Again not a problem for their IRA accounts, perfectly acceptable, but for a pooled plan...NOT.

AllREIT's picture
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Joined: 2006-12-16

Dust Bunny wrote:That was funny.
This sounds like a newer version of the Allianz annuity that my
profit sharing people have with Allianz.  10% bonus 5% liquidity,
have to annuitize over 10 years to get the full/bonus value. 
Again not a problem for their IRA accounts, perfectly acceptable, but
for a pooled plan...NOT.

Don't forget the 3% crediting rate.

How much are T-Bills paying these days?

troll's picture
Offline
Joined: 2004-11-29

AllREIT wrote: Dust Bunny wrote:
That was funny.
This sounds like a newer version of the Allianz annuity that my profit sharing people have with Allianz.  10% bonus 5% liquidity, have to annuitize over 10 years to get the full/bonus value.  Again not a problem for their IRA accounts, perfectly acceptable, but for a pooled plan...NOT.
Don't forget the 3% crediting rate. How much are T-Bills paying these days?

Dumbf**k.

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