Allianz Core Income 7 Annuity Review
Allianz Core Income 7 is a fixed indexed annuity that includes the Core Income Benefit rider. This add-on feature provides a valuable perk: guaranteed increases in your annual withdrawal percentage starting at age 45. These increases continue until you begin receiving lifetime income from the annuity.
But is this investment product really worth your consideration? Read this comprehensive review to find the answer.
About Allianz Life
Allianz Life specializes in fixed index annuities and life insurance products, providing a diverse range of investment products with interesting add-ons and features to help you build your retirement income.
Allianz Life specializes in fixed index annuities and life insurance products, providing a diverse range of investment products with interesting add-ons and features to help you build your retirement income.
Allianz Life Financial Rating
Rating Company
Rating
Moody’s
Aa3
S & P
AA
A.M. Best Rating
A+
Comdex
94
Allianz Core Income 7 Highlights
7-Year Fixed Index Annuity
This product is a 7-year fixed indexed annuity that offers you the option to start taking withdrawals immediately after buying your contract (if you’re at least 50 years old) or at the start of the year in which you turn 50.
The Core Income Benefit Rider
- Level Income: This option provides a steady, predictable income stream throughout your retirement.
- Increasing Income: Start with a lower income initially, but with the potential for automatic increases over time. These increases are linked to interest earned by your chosen investment mix (allocation).
Free Withdrawals
In each contract year (after the first year), you can withdraw up to 10% of your initial premium without any fees or penalties (surrender charges or MVAs).
If you take out more than 10%, a surrender charge and MVA will apply to the amount exceeding the limit.
After the contract’s term is ended, you have the option to withdraw all or some of your money in a lump sum, charge-free.
Death Benefit
- Current account value (accumulation value).
- Guaranteed minimum value (as specified in your contract).
- The total amount you paid into the annuity (premiums) minus any withdrawals and any associated fees.
Allianz Core Income 7 Annuity Overview
🔔 Important Information
Annuity Term
7 Years
Type of Annuity
Fixed Index
Interest
3.60% (fixed)
Premium Type
Flexible
Maximum Issue Age
80 years
Withdrawal Charge Schedule
8.5%, 8.0%, 7.0%, 6.0%, 5.0%, 4.0%, 3.0%, 0%
Minimum Premium
$10,000
Maximum Premium
$1,000,000
RMD
Yes
Market Value Adjustment
Yes
Allianz Core Income 7 Historical Rate of Return
The hypothetical historical performance provided herein showcases the annualized return of allocation strategies, representing the investment’s annual growth rate considering compounding effects. Similar analyses can be found for each account in official fixed index annuity illustrations provided by insurance carriers.
What’s not reflected:
The annualized return does not encompass rider charges, strategy fees, or applicable premium bonuses.
Notes on rates:
The information presented assumes the annuities’ current caps, spreads, participation rates, and other related rates, without guarantee.
No guarantees:
These actual elements are subject to change over time, resulting in potentially higher or lower outcomes. Additionally, no single index consistently outperforms in every scenario. It is advisable to consult with a properly licensed and educated annuity professional before making any decisions.
Fees and Charges
There are some additional fees attached to this annuity, particularly to the Core Income Benefit rider. You will be required to pay a charge of 1.25% of your annuity’s account value in the first year of the contract. The charge may change each year, but it won’t exceed 1.25%.
Index Options
Allianz Core Income 7 offers you a wide selection of possible allocations, such as:
S&P 500® Index
Bloomberg US Dynamic Balance II ER Index
Nasdaq-100 Index®
Bloomberg US Dynamic Balance Index II
Russell 2000® Index
Fixed Interest
Crediting Methods
Crediting methods are formulas that calculate how much interest your annuity earns based on the performance of a stock market index over a specific time frame.
When it comes to the Allianz Core Income 7 annuity, you have a few reading methods available. These would be:
Annual point-to-point with a cap
Annual point-to-point with a spread
Annual point-to-point with a participation rate
2-year point-to-point with a participation rate
Annuity Surrender Charge Schedule
The Allianz Core Income 7, similar to most annuities, assesses a surrender charge if you take out your money before the contract matures. This charge acts as a penalty and starts high but gradually reduces each year until it reaches zero at the end of the term (in this case, 7 years).
Allianz Core Income 7 Key Features
This annuity comes with features like the Market Value Adjustment, which determines how early withdrawals are calculated, and the Index Lock, which protects your gains. Let’s talk about them in more detail.
Market Value Adjustment (MVA)
A market value adjustment (MVA) is a recalculation of your annuity’s value when you make a withdrawal before the surrender period ends. This adjustment can be positive or negative, depending on current interest rates.
The Allianz Core Income 7 annuity’s MVA is tied to the performance of the Bloomberg US Intermediate Corporate Bond Index.
The MVA is a consideration for withdrawals made before the Core Income 7 annuity reaches maturity. By holding the annuity until its maturity date, you avoid any MVA charges.
Automatic Annual Withdrawal Percentage Increase
The Core Income 7 Annuity incentivizes saving for retirement early. Once you reach 45, your guaranteed annual withdrawal percentage automatically increases each year until you begin receiving lifetime income.
This translates to a potentially higher income stream when you decide to tap into your annuity.
Index Lock
Index Lock allows you to capture potential growth in the market. During each crediting period, you have the chance to lock in an index value for your chosen investment strategy.
This essentially freezes a potential interest rate based on that value. There are two ways to benefit from the locked value.
Annual method credits interest at the end of each year. The interest rate is based on the locked value you selected and the annuity’s participation rate.
Multi-year method applies interest based on the locked value for the year you activate it, offering a quicker boost to your earnings.
Pros and Cons
Reasonable 7-year term
5 different market indexes available
4 different crediting methods available
Allianz Core Income 7 is RMD-friendly
Index Lock feature
Excellent ratings from top rating companies
Flexible premiums and withdrawal amounts
Market value adjustments on withdrawals
Considerably high rider fee of 1.25%
Key Takeaways
The Allianz Core Income 7 annuity is a good option for risk-averse investors seeking a good balance between growth potential and guaranteed income for retirement.
One thing to keep in mind is the fact that this annuity includes a compulsory Core Income Benefit rider, which has a 1.25% annual charge that can reduce your overall returns.
But, with increasing lifetime payments and a reputable company like Allianz Life backing it up, this annuity product can be an interesting investment strategy to create retirement income.
Company information
Company Name
Allianz Life of North America
Website
Phone Number
800-950-1962
A.M. Best Rating
A+ (superior)
Moody’s Best Rating
Aa3 (fourth-highest)
S&P’S BEST RATING
AA (very strong)
About the Product
Product Name
Allianz Core Income 7
Product Type
Fixed Indexed Annuity
Launch Date
2013
Product Information
Allianz Core Income 7 is a fixed indexed annuity, which means it’s a hybrid of a fixed annuity that offers investors potential for growth based on a market index and an indexed annuity contract that guarantees your principal amount (the money you invest) is safe from market losses.
For this reason, FIAs are a good option for risk-averse investors seeking a balance between potential growth and security for their retirement savings.
Account Types
Personal, Traditional IRA, Roth IRA, SEP-IRA, Simple-IRA, 403(b)
Not Available In
PR, VI, NY
Annuity Expert
Jeremiah Konger
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Other Allianz Life Fixed Index Annuity Products
Allianz 222
Allianz 222 offers a unique blend of security and growth potential. This annuity features a built-in Protected Income Value benefit that increases your retirement income possibilities every year you defer withdrawals.
Allianz Accumulation
The Accumulation annuity from Allianz gives annuity holders the opportunity to invest using 17 different market indices for potential growth over time.
Allianz Benefit Control
With Allianz Benefit Control, you have more control over how you invest your annuity funds and can earn a bonus on premiums deposited in the initial 18-month period.
Allianz Core Income 7
With a 7-year term and a $10,000 minimum deposit, Allianz’s Core Income 7 comes with an income rider that boosts your accumulated value during the savings phase.
Allianz Essential Income 7
With a $10,000 minimum deposit, Allianz’s Essential 7 annuity allows your retirement income to grow each year. There are no surrender fees once the 7-year term is up.
Allianz Retirement Foundation
The Retirement Foundation annuity is only available from advisory platforms, not directly to individual investors, so you need to engage a financial advisor to purchase.
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