Master the opportunities

Transcription

1 TM MasterDex 5 Annity Master the opportnities A fixed index annity with point-to-point monthly crediting and a premim bons Allianz Life Insrance Company of North America CB50626-CT Page 1 of 16

2 Discover the MasterDex 5 TM Annity from Allianz A fixed index annity from Allianz can be a valable asset. A prdent wealth management plan sholdn t rely solely on ftre Social Secrity to pay for an individal s retirement years. One way to accmlate additional assets for retirement income is an annity. The money in an annity has the potential to create an additional sorce of retirement income that can spplement Social Secrity. Assets placed in an annity can even provide a variety of income streams. This is one reason many individals se annities to help them achieve their long-term financial goals, inclding retirement income. Here s how an annity works. An annity is a contract between a contract owner and a life insrance company. The annity s vale is backed by the financial strength and claims-paying ability of the issing insrance company. As contract owner, yo pay premim to the insrance company. In exchange for yor premim, the insrance company promises to make payments to yo at some point in the ftre. Yo may also receive the benefits listed on the following page. Yo shold not by an annity for short-term prposes. Yo generally have to keep yor premim in the annity for a specified period of time to avoid the assessment of penalties, sch as srrender charges. Page 2 of 16

3 Annities offer important benefits. Potential growth dring the annity s accmlation phase: Dring this initial phase, an annity can be an ideal vehicle to help yo accmlate money for yor retirement. Income for life and other options dring the retirement income phase: When yo are ready to start taking income, the annity offers yo a range of payot options. Some options may offer an immediate, single payment. Others may inclde income payments schedled over a specific period of time, inclding yor entire lifetime. Tax deferral that can help yor money grow: The money in yor annity can grow tax-deferred. This means yo don t have to pay taxes on yor annity s growth ntil yo begin to withdraw money from the annity. The power of tax deferral, componded over the life of yor annity s accmlation phase, may have a positive impact on the vale yor annity generates for yor retirement. Any distribtion may be sbject to ordinary income taxes and, if taken prior to age 59 1 /2, to a 10% federal tax penalty. Death benefit protection for yor beneficiaries: As we noted earlier, annities are life insrance prodcts. So it s only natral that they can give yo peace of mind, knowing yor beneficiaries are protected if yo pass away. Fixed index annities are different. A fixed index annity earns interest based on changes in an external index. This is different from traditional annities, which credit interest calclated at a fixed rate set in the contract. The selected index varies from day to day and is not predictable. When yo by a fixed index annity yo own an insrance contract yo are not bying shares of any stock or index. Many fixed index annities also permit contract owners to allocate premim to a traditional fixed interest option, where interest is credited at a fixed rate of interest not based on any external index. The vale of a fixed index annity will not drop below a garanteed minimm specified in the contract. This means that if yo take money ot of the contract or die, yo (or yor beneficiaries) are garanteed to receive at least a minimm vale. To smmarize, a fixed index annity offers contract owners: The potential for growth by basing interest earned on the performance of an index or indexes (Interest earned on a fixed index annity cold be less than the interest earned in a traditional fixed annity.) A garanteed minimm vale Page 3 of 16 1

4 Annity from Allianz Discover the MasterDex 5 Annity from Allianz. MasterDex 5 can offer yo safety while it helps yo reach yor financial goals. With MasterDex 5: Yo earn a 3% bons on premim received for five years. 1 Each year, yo may receive indexed interest based on monthly changes of a market index, sbject to a monthly cap. After jst 10 years yo can take yor annity s fll vale. 2 Any indexed interest is locked in once a year, eliminating risk de to market index losses. 2 1 Bons annities may inclde higher srrender charges, longer srrender charge periods, lower caps, or other restrictions that are not inclded in similar annities that don t offer a premim bons featre. 2 Dring the first 10 contract years, we will apply a srrender charge and market vale adjstment if yo (or yor beneficiaries) partially or flly srrender yor contract. The same wold apply if yo begin annitization, which means taking income payments, prior to the sixth contract year (or for fewer than 10 years). Any amonts withdrawn may be sbject to ordinary income taxes and, if taken prior to age 59 1 /2, to a 10% IRS penalty. These charges and taxes may reslt in a loss of bons, indexed interest and fixed interest, and a partial loss of principal. 2 Page 4 of 16

5 Annity from Allianz Safety MasterDex 5 locks in any annal indexed interest atomatically. 2 If indexed interest is credited to yor annity s vales, it can never be lost de to market index volatility. MasterDex 5 protects yor principal and 3% bons from index losses. 2 Yor principal and bons are never sbject to market index risk. A downtrn in the market index(es) cannot have a negative impact on yor contract vales. We garantee it. Growth MasterDex 5 lets yo benefit when the market index is heading p. Control If yo need cash, MasterDex 5 gives yo access. 2 Beginning 12 months after yor last premim is received, yo may annally withdraw p to 10% of yor total premims paid withot a srrender charge or market vale adjstment ntil 50% of yor total premim has been withdrawn. After 10 years it s yor choice: take the money, or stay. 2 Anytime after yor 10th contract year, yo can walk away with yor annity s fll vale (mins any loans or withdrawals). Of corse, yo can leave yor money in the annity so it contines to benefit from potential indexed interest. When the market is headed p, the vale of yor MasterDex 5 can also increase. That s becase at the end of each year, yo get fll 100% participation in potential monthly gains sbject, however, to an established maximm, or monthly cap. MasterDex 5 has a real difference. This sms it p. Safety Growth Control The MasterDex 5 tracks point-to-point monthly changes (sbject to a monthly cap) in the market index(es). Once a year, those 12 months vales are atomatically added p and credited if positive. The sm helps determine the crrent vale of yor annity. 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 se by Allianz Life Insrance Company of North America. The prodct is not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of prchasing the prodct. The 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 se by Allianz Life Insrance Company of North America. The prodct(s) have not been passed on by the Corporations as to their legality or sitability. The prodct(s) are not issed, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S). Page 5 of 16 3

6 Annity from Allianz MasterDex 5 tracks market index changes, then pts it all together. Here s how. With MasterDex 5, the vale of yor annity is based on the monthly point-to-point flctations of two of America s most recognized stock indexes: the S&P 500 and the Nasdaq-100. MasterDex 5 Annity basics The MasterDex 5 Annity is a point-topoint fixed index annity that offers a 3% premim bons, retirement income and a choice of fixed interest and/or indexed interest based on changes in the S&P 500 and Nasdaq-100 indexes. Yo can get all the benefits offered by the MasterDex 5 with an initial premim amont of $25,000 or more. Yo can add money at any time dring the first five contract years and receive a 3% bons on it. Additional premim payments made dring a contract year, and any bons, are credited to yor contract s interim interest accont ntil the following contract anniversary, at which time yo can decide how they shold be allocated. Interest crediting calclations We captre the crrent vale of the market index on the date yo prchased yor contract, as well as on each contract s monthiversary. So if yor contract is dated the seventh of the month, yor monthiversary will be the seventh day of every scceeding month throghot the life of the contract. Monthly retrns are calclated in two steps. First, the change from the previos month s index vale to the crrent month s index vale is divided by the previos month s index vale. This amont is then mltiplied by the participation rate. In any given month, a positive monthly retrn may exceed yor annity s stated monthly cap. In that case, the monthly capped retrn will be sed in the indexed interest calclation. We can raise or lower the monthly cap annally bt it will never be less than 1%. At the end of each contract year, the monthly capped retrns are added together to calclate yor indexed interest for that year. If this sm is negative, the indexed interest for that year will be zero. Althogh there is a monthly cap on positive monthly retrns, there is no established limit on negative monthly retrns. This means that a large decrease in one month cold negate several monthly increases. Actal indexed interest may be lower (or zero) if the market index declines from one monthiversary to the next, even if the market index experienced an overall gain for the year. Althogh an external index may affect yor contract vales, the contract does not directly participate in any stock or investments. Yo are not bying any shares of stock or shares of an index. The market index vale does not inclde the dividends paid on the stocks nderlying the market index. These dividends are also not reflected in the interest credited to yor contract. 4 Page 6 of 16

7 Annity from Allianz Here s a hypothetical illstration showing indexed interest based on 12 months of hypothetical index retrns and a monthly cap. We establish this monthly cap on every anniversary, and garantee it for that contract year. We can lower the monthly cap bt it can never be less than. Figres impacted by the monthly cap are shown in bold type. Althogh yo can allocate premim to either index (or both), for simplicity s sake or example will presme all of the annity s premim has been allocated to a single index. To find the indexed interest for the year, simply add p the 12 monthly capped retrns. Accmlation vale at beginning of contract year: $103,000 Bons: 3% Assmed monthly cap percentage: Hypothetical monthly Monthly Month index retrn cap applied Vale at end of contract year: $109, % (The sm of monthly capped retrns eqals the year s indexed interest.) No representation is made of ftre performance. As a MasterDex 5 contract owner, yo do not invest directly in any index. We sed a hypothetical monthly cap. Using the minimm monthly cap the indexed interest for the year wold be 0%. Yo can earn fixed interest. Traditional fixed interest is calclated and credited daily for both the fixed interest allocation and the interim interest accont. Interest credit rates are declared annally by Allianz. We can raise or lower interest credit rates annally, bt they will never be less than 3%. There are no p-front fees or ftre sales charges. There are never any asset fees or p-front sales charges. 100% of yor premim is credited to yor accmlation vale. However, srrender charges and market vale adjstments do apply dring the first 10 contract years. Pt all yor eggs in one basket. Or two. Or three. When yo prchase yor MasterDex 5, yo can base yor annity s potential growth exclsively on the S&P 500 or the Nasdaq-100. Yo can also allocate yor entire premim to a fixed interest option. If yo wish, however, yo can allocate (in 25% increments) among all three options. Now THAT S control! Change yor mind? No problem! Shortly after yor contract anniversary each year, we ll notify yo that yo can change yor allocations. Changes to yor allocations mst be sbmitted in writing. If we receive yor changes within 21 days of yor contract anniversary, they will be effective dring that contract year. Allocation changes received more than 21 days after yor contract anniversary won t take effect ntil yor next contract anniversary. Page 7 of 16 5

8 Annity from Allianz No matter what the market index does MasterDex 5 gives yo: Potential indexed interest based on a market index Protection from market index losses All yor money (inclding indexed interest and bons) after 10 years! The large chart to the right trns back the clock to show how the MasterDex 5 Annity might have delivered from 1995 throgh 2004 if the contract had been offered. The vales shown are based on the following assmptions: $100,000 initial premim and a 3% premim bons 100% participation rate garanteed for the life of the contract Hypothetical monthly cap for each year Minimm garanteed monthly cap for each year Prodct available since % allocation to the S&P 500 The market vale adjstment (MVA) is not inclded in the calclation of the cash srrender vale. The MVA may increase or decrease the cash srrender vale shown. Under these assmptions, had the MasterDex 5 existed, it wold have provided an average annal interest rate of 6.09% sing the monthly cap over the 10-year period shown. Using the minimm monthly cap, the average annal interest rate wold be 1.84%. 40% 30% 20% 10% 0% Growth Cmlative capped monthly retrns, 1995 n 22.54% indexed interest n n n n n n n n n n n n n J F M A M Jn Jy A S O N D In the best year, MasterDex 5 can deliver potential growth. Month Jan Feb Mar Apr May Jn Jly Ag Sept Oct Nov Dec In these three magnified scenarios (Growth, Principal protection, and Performance), we take a closer look at the MasterDex 5 Annity dring three very different years. Note the way month-by-month changes in the market index have an impact on indexed interest. S&P monthly retrn 2.43% 3.61% 2.73% 2.80% 3.63% 2.13% 3.18% -0.03% 4.01% -0.50% 4.10% 1.74% Indexed interest capped monthly at at 2.13% -0.03% -0.50% 1.74% -0.03% -0.50% Total 34.11% 22.54% 9.47% 6 Page 8 of 16

9 Hypothetical example based on S&P 500 performance from: Vales in this chart are based on S&P 500 performance (withot dividends) dring the most recent 10-year period. All vales are year-end vales. Past performance is no garantee of ftre reslts. No representation is made of ftre performance. Yo are not bying shares of any stock or index. $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 p ln Accmlation vale at monthly cap $180,640 n Cash srrender vale at monthly cap p Accmlation vale at monthly cap n l Cash srrender vale at monthly cap n n n n n n n n l l pn p p p p p l l l l l l pl pl p p MasterDex 5 TM Annity from Allianz 10% 0% -10% -20% -30% n Principal protection Cmlative capped monthly retrns, 2000 Accont Contract vales n don t decline n n n n n n n n n n n n J F M A M Jn Jy A S O N D In a negative year, MasterDex 5 locks in previos indexed interest. Month Jan Feb Mar Apr May Jn Jly Ag Sept Oct Nov Dec S&P monthly retrn -5.09% -2.01% 9.67% -3.08% -2.19% 2.39% -1.63% 6.07% -5.35% -0.49% -8.01% 0.41% Indexed interest capped monthly at at -5.09% -2.01% -3.08% -2.19% 2.39% -1.63% -5.35% -0.49% -8.01% 0.41% -5.09% -2.01% -3.08% -2.19% -1.63% -5.35% -0.49% -8.01% 0.41% Total % 0.00% 0.00% 10% 5% 0% -5% Performance Cmlative capped monthly retrns, 2004 n n n n n n n n n n n n n n J F M A M Jn Jy A S O N D In an average year, MasterDex 5 can provide indexed interest. Page 9 of 16 Month Jan Feb Mar Apr May Jn Jly Ag Sept Oct Nov Dec S&P monthly retrn 1.73% 1.22% -1.64% -1.68% 1.21% 1.80% -3.43% 0.23% 0.94% 1.40% 3.86% 3.25% Indexed interest capped monthly at at 1.73% 1.22% -1.64% -1.68% 1.21% 1.80% -3.43% 0.23% 0.94% 1.40% -1.64% -1.68% -3.43% 0.23% 0.94% Total 8.99% 6.58% 1.42% 7

10 Choose from a variety of options to receive steady, predictable income from yor annity. Choose from several annity payment options. If yo keep yor contract in deferral for at least five years, yo can choose to receive annity payments in any of the following ways: Interest only Yo have the option to receive interest-only annity payments for five years. Interest will be paid as earned based on the amont of yor accmlation vale. After five years of interest only payments, yo can take yor fll accmlation vale as a lmp-sm payment. Installments for a garanteed period Yo can choose to receive annity payments in eqal installments for a period from 10 to 30 years. Each installment wold consist of part principal and part interest. 8 Installments for life Yo have the option to receive annity payments in eqal installments for the rest of yor life. Payments end pon yor death. Installments for life with a garanteed period Yo can choose to receive annity payments in eqal installments for the rest of yor life. Upon yor death, the balance of the garanteed period, if any, will be paid to yor beneficiary the same way as yo previosly selected. Installments for a selected amont Yo may select to receive annity payments in eqal installments of an amont that yo choose, as long as the payments last for at least 10 years. Payments contine ntil yor accmlation vale is gone. Page 10 of 16

11 Annity from Allianz Access yor money sooner to help pay for nrsing home care. Joint and srvivor Yo can select to have eqal installments paid ntil yor death, then contine to be paid to yor srvivor. In this case, yo can select 100%, 2/3, or 1/2 of yor payment amont to be paid to yor srvivor ntil his/her death. The payot rate sed to determine the income stream depends on the age of yor contract and the payot option selected. The garanteed interest rate in payot is 1%. MasterDex 5 offers yo a death benefit. The MasterDex 5 Annity provides a death benefit payable to yor named beneficiary. If taken as annity payments over at least five years, the annity payments will be based on yor contract s fll accmlation vale. If taken as a lmp sm, the death benefit will eqal the greater of the cash srrender vale (which is the accmlation vale adjsted for a srrender charge and market vale adjstment dring the srrender charge period) or the sm of premims paid less any withdrawals. The death benefit paid to a properly designated beneficiary (other than the estate) will pass withot the costs and delays of probate. If yo, as the contract owner, shold enter a nrsing home, long term care facility, or hospital for at least 30 days ot of a 35-consective-day period after the first contract year, yo may take an accelerated distribtion of yor contract s accmlation vale over a period as short as five years. If yo don t want yor annity proceeds to be a tax brden for yor beneficiary, here s a soltion. The Death Benefit Rider enables yor beneficiary to receive a tax-free death benefit p to 28% of taxable gain. It allows yo to pass on more of yor annity s vale to yor beneficiaries and redces a possible tax obstacle for them. Althogh the rate at which yor beneficiaries will pay income tax at some ftre date is nknown, the Death Benefit Rider can offset a sbstantial portion or all of the federal income taxes de at the time of yor death (state or local taxes may apply). Please note: A Death Benefit Rider charge will apply; benefit only applies to nonqalified contracts where owner/annitant are the same. Page 11 of 16 9

12 Annity from Allianz MasterDex 5 gives yo the freedom to access yor money in several ways. Take free withdrawals. Yo can take one free withdrawal of p to 10% of premims every 12 months withot a srrender charge or market vale adjstment as long as: It occrs 12 months after the last premim is received No more than one withdrawal is taken within a 12-month period Total free withdrawals do not exceed 50% of premims received If, within 12 months of a free withdrawal, the contract is srrendered or annitized, another withdrawal is taken, or additional premim is added, we will retroactively apply a srrender charge and market vale adjstment (MVA) to that withdrawal. This cold reslt in a loss of bons, indexed interest and fixed interest, and a partial loss of principal. Withdrawals will decrease the vale of the contract and its death benefit. A free withdrawal is eligible to receive partial indexed interest at the end of the contract year. Partial indexed interest is based on the annal indexed interest and the amont of time dring that year before the free withdrawal was taken. Schedle Systematic Withdrawal of Credits. Systematic Withdrawal of Credits allows yo to keep yor contract in deferral and receive payment of indexed interest. Yo can select to receive payments after yor fifth contract year. Payments will be based on indexed interest applied to yor contract after the reqest is received. Yo may take this Systematic Withdrawal of Credits withot srrender charges and MVA, and yor contract contines to benefit from potential indexed interest. To qalify for this option, yor contract mst be held at least five contract years and still be in deferral. Taking Systematic Withdrawal of Credits will lower the accmlation vale and vale of death benefits. Take a contract loan. A contract loan may be taken for p to 50% of the cash srrender vale (maximm of $50,000). The loan interest rate is 7.4% annally in advance. Loans are not available with IRA, SEP, or some other qalified plans. Unpaid loans will be treated as a partial srrender, which means it is sbject to srrender charges and MVA. Take reqired minimm distribtions. Reqired minimm distribtions from a tax-qalified plan (IRA, SEP, etc.) will qalify as a free withdrawal if taken annally in December or monthly throghot the year. Contract vales and the amont available for free withdrawal will be redced by the distribtion amont withdrawn. 10 Page 12 of 16

13 Annity from Allianz Srrender with lmp-sm payot. Walk away with yor annity s fll accmlation vale at any time after 10 contract years. If yo partially or flly srrender yor contract before the tenth contract anniversary, the amont yo receive will be redced by a srrender charge and an MVA as shown in the charts below. A srrender charge and an MVA will also apply if yo annitize prior to the sixth contract year or if the annity payments are taken over a period of fewer than 10 years. This cold reslt in loss of indexed interest, fixed interest, bons, and a partial loss of principal. However, the cash srrender vale will never be less than the garanteed minimm vale as described in yor contract. A srrender charge and an MVA may be applied pon death. Note: the money yo take ot may be taxable. Srrender charge percentages Start of Srrender contract year charge % 1 10% 2 9% 3 8% 4 7% 5 6% 6 5% 7 4% 8 3% 9 2% 10 1% 11 0% The srrender charge percentage will start at 10% on the date of contract isse. The srrender charge percentage will decrease by % on each monthly anniversary. Yor contract vales grow tax-deferred. However, any distribtions from yor contract, inclding free withdrawals, partial withdrawals, loans, Systematic Withdrawal of Credits and reqired minimm distribtions, may be taxable as ordinary income. If yo are nder age when a distribtion is taken, the IRS may impose an additional 10% penalty tax. A note abot the market vale adjstment (MVA): If yo partially or flly srrender yor MasterDex 5 Annity, it will be sbject to an MVA dring the srrender charge period. An MVA will also apply if yo annitize prior to the sixth contract year or if the annity payments are taken over a period of less than 10 years. An MVA is a calclation sed to adjst the vale of money withdrawn according to the interest rate environment at the time the withdrawal is taken. The MVA may increase or decrease yor contract s cash srrender vale. In general, if the 10-year US Treasry Constant Then the Matrity Interest Rate at time of withdrawal is: MVA is: Reslting in: Less than when the premim was sbmitted Greater than 1 Higher cash srrender vale Eqal to when the premim was sbmitted Eqal to 1 No effect on cash srrender vale Greater than when the premim was sbmitted Less than 1 Lower cash srrender vale Page 13 of 16 11

14 Annity from Allianz Is the MasterDex 5 Annity the right choice for yor retirement plans? The MasterDex 5 Annity offers a combination of insrance garantees and benefits. It merits yor carefl consideration if: Yo wold appreciate receiving an p-front bons to help accmlate money for retirement. Yo wish to receive indexed interest based on potential gains in the S&P 500 or Nasdaq-100. Yo want to protect yor principal, bons, fixed interest, and locked-in indexed interest if the market index declines. Yo want long-term tax-deferral of retirement assets. Yo want flexible income options. Yo want a death benefit for yor heirs. The MasterDex 5 Annity: a powerfl financial tool for principal protection along with potential growth. Make it part of yor retirement portfolio. 12 Page 14 of 16

15 Or top priority is the safety of yor money. All contracts are issed by Allianz Life Insrance Company of North America, a member of the Allianz Grop. With over 700 sbsidiaries in more than 70 contries, the Allianz Grop is one of the world s leading providers of integrated financial services. Or goal is to provide contract owners with wealth management prodcts that can help meet today s needs and financial objectives, with a prodct philosophy of offering fair and eqitable vales on each contract we isse. Foremost in or minds is the safety of the money yo entrst to or care. Allianz has consistently been assigned financial strength ratings by Standard & Poor s and A.M. Best that are among the highest available. It is one of a select grop of major insrance companies to receive sch high ratings. These independent agency ratings are based on an analysis of financial reslts and evalation of management objectives and strategies. The ratings do not indicate approval by the analysts and are sbject to change. Innovative prodcts, exceptional cstomer service, and sond financial strength make Allianz the place to trn to help meet yor retirement objectives. Contracts are issed by Allianz Life Insrance Company of North America (form P50614-CT with PS CT). Agent name License nmber Page 15 of 16

16 Allianz Life Insrance Company of North America 5701 Golden Hills Drive Minneapolis, MN (R-5/2006) Page 16 of 16