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Allianz Life Insurance Company of North America (Allianz) wants consumers who are considering our products to be fully informed and knowledgeable. The frequently asked questions below are intended to provide an overview of fixed annuities and how they work.
What is a fixed annuity?
An annuity is a contract between a contract owner and an insurance company in which the insurer agrees to make periodic payments in exchange for a premium.
How does a fixed annuity work?
An annuity is a contract between a contract owner and a life insurance company. The annuity’s value is backed by the financial strength and claims-paying ability of the issuing insurance company.
As the contract owner, you pay a premium to the insurance company. In exchange for your premium, the insurance company promises to make payments to you at some point in the future. You may also receive the benefits as outlined below.
You should not buy an annuity for short-term purposes. You generally have to keep your premium in the annuity for a specified period of time (with the exception of immediate annuities) to avoid the assessment of penalties, such as surrender charges.
What are the benefits of fixed annuities?
Annuities offer benefits that help people establish a guaranteed retirement income stream. The wide range of annuity choices allows people to select those that are best suited to meet their financial goals. Fixed annuities protect the principal and offer minimum interest rate guarantees. Other annuities, such as fixed index annuities provide a combination of minimum interest rate guarantees and the potential for interest based on changes in a market index. Interest earned on a fixed index annuity is subject to a cap, spread, or participation rate and could be less or more than the interest earned in a traditional fixed annuity.
How are annuities taxed?
Prior to purchasing an annuity, you should consult with a tax professional to discuss your individual situation. In general, income tax on annuities is deferred, which means you aren’t taxed on the interest until you begin to take money out of the annuity, at which time they are taxed as ordinary income. You may also have to pay a 10% federal tax penalty if you withdraw any of the annuity's value prior to age 59 ½.
What is the record of customer satisfaction at Allianz?
Allianz has a strong customer satisfaction record. In fact, fewer than one percent of our annuity contract owners have filed a complaint with Allianz.
What does Allianz do to ensure consumers are educated about their products?
We host product education workshops for financial professionals every year and have trained call center professionals on staff to answer questions from contract owners and financial professionals. We also deliver a clear and succinct disclosure document at the point of sale for every fixed annuity we sell in all states that both customers and agents must sign.
If a customer has a complaint, does Allianz have a formal review process?
Yes. Allianz contract owners can call 800.950.1962 to ask questions related to their contract or [to] obtain information on how to file a complaint.
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