Never buy like this, look properly at what you are putting your money into.
This product is designed for annuity payout and holding at least 15 years.
Many good 5, 7 year products out there.
- 10,704
Allen,
I am afraid that you might not fully understand this product. The 22% upfront bonus is ONLY if you choose to take a lifetime income option once you hit retirement. If you choose to cash out or take normal withdrawals, you will not receive the 22% bonus.
In other words, you can not "walk away" with the 22% bonus. You only receive it slowly over the course of your entire retirement.
So if at age 60 you wanted to take the funds and put them into another investment, you would lose the 22% bonus.
That means this is a LIFETIME product if you actually want to keep the 22% bonus....
$80k is not going to grow to be a significant income source that you are going to have a huge benefit from by taking the lifetime income option. Therefore, imo, you would be MUCH better served by an annuity that concentrates on accumulation and not income.... because $80k is not insignificant and is a LOT of money to lock up for the rest of your life.
It is the #1 selling annuity for income... but it is designed specifically to create a lifetime income from. It is designed to be kept until the day you die, and that is the only way to get the bonus out of it.
If you would like to see what some alternatives might look like let me know. I am actually licensed in IL and annuities are an area I specialize in... and if you want me to write the biz I can 1099 you for half the commission...
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- 8,448
SCAgent, thank-you for taking the time to explain how the 22% bonus works. Since it's my wife's money, she went ahead and let the College Planning firm go through with the $80k transfer to the Allianz 222. They're doing several things to structurally to best situate our 17 year old for college. This was just one of the steps being taken. She's 60 and needs to start withdrawing at age 70 (I believe) because it's qualified.
At any rate, I did read the details on the Allianz website and saw that "Lifetime Annuity" requirement. After I told her that she had to take a Life Annuity, and explained the ramifications of that, wifey got really upset and called the college planner guy on his cell, this past Saturday morning. He reassured her that the money CAN be withdrawn, and the 22% bonus, along with interest/earnings attributable to that up-front 22% bonus, is available too.
What we're going to do is sit down with him after the policy arrives, during the Free-Look period. I'm going to ask him to show us in the policy documents where it states that none of the 22% (or it's earnings) are sacrificed if anything other than a Lifetime Annuity is chosen. If he can't do that, I'll get in touch with you, SCAgent.
Footnote: Actually, the IRA portfolio she has/had with IDS (or whatever it's called now) wasn't performing badly. She invested $150 a month via teacher salary auto-deduction since 1992. Now it's up to $103K. Some went to Money Market but most went into the IRA. Total is now $103K. Her IDS advisor died 8 years ago and his replacement just called one time to say "hi". In my mind, this college planning service is just making the transfer to earn money in addition to the $1,200 she paid for their guidance. But like I said, it's her money and schoolteachers can be pretty bull-headed.
SCAgent, thank-you for taking the time to explain how the 22% bonus works. Since it's my wife's money, she went ahead and let the College Planning firm go through with the $80k transfer to the Allianz 222. They're doing several things to structurally to best situate our 17 year old for college. This was just one of the steps being taken. She's 60 and needs to start withdrawing at age 70 (I believe) because it's qualified.
At any rate, I did read the details on the Allianz website and saw that "Lifetime Annuity" requirement. After I told her that she had to take a Life Annuity, and explained the ramifications of that, wifey got really upset and called the college planner guy on his cell, this past Saturday morning. He reassured her that the money CAN be withdrawn, and the 22% bonus, along with interest/earnings attributable to that up-front 22% bonus, is available too.
What we're going to do is sit down with him after the policy arrives, during the Free-Look period. I'm going to ask him to show us in the policy documents where it states that none of the 22% (or it's earnings) are sacrificed if anything other than a Lifetime Annuity is chosen. If he can't do that, I'll get in touch with you, SCAgent.
Footnote: Actually, the IRA portfolio she has/had with IDS (or whatever it's called now) wasn't performing badly. She invested $150 a month via teacher salary auto-deduction since 1992. Now it's up to $103K. Some went to Money Market but most went into the IRA. Total is now $103K. Her IDS advisor died 8 years ago and his replacement just called one time to say "hi". In my mind, this college planning service is just making the transfer to earn money in addition to the $1,200 she paid for their guidance. But like I said, it's her money and schoolteachers can be pretty bull-headed.
You're confusing a life annuity with a guaranteed lifetime withdrawal benefit (which is where the 22% comes into play)
Ask the agent that you're dealing with if you can just walk away after surrender with the 22% Bonus and all of your money.
You can't.
An illustration will also show you this instead of trying to decipher the contract.
- 10,704
I can show you in the sales material were it says that. Not only is it in the contract, but it is in the illustrations that she should have been shown.
There are 3 different accounts on this product:
1. Accumulation Value (what you can walk away with after 10 years is up)
2. Surrender Value (what you can walk away with before the 10 years is up)
3. PIV Value "Protected Income Value" (what your lifetime income is based on, if you choose to trigger lifetime income)
The 22% Bonus is only to the PIV Account, not to the "get your hands on and walk away with" Accumulation Value.
There are actually disclaimers on the sales material and most likely on the app saying that the 22% bonus is only to the PIV account and is not available in any form other than lifetime withdrawals.
Whenever a product offers a huge bonus like that there is a catch. I am only a fan of bonus product if you absolutely plan to pay extra for the lifetime income benefits like the 222 does. I know annuities like you know health insurance... the bonus money is only available in the PIV account and is only accessible through the lifetime income benefit.
Shoot me a PM with your email and I will email you the relevant info if you would like.
- 11,457
I take it you've never been married?
There's a tendency within married couples that one spouse "handles all the money". They pay the bills, they do the planning, etc. It can feel like that spouse has total financial control within the marriage.
By having money that's designated for the "non-money spouse" (for lack of a better term), it gives them a feeling of control for themselves. It can be a slush fund, or it can just be savings for something personal. But it's a way for the "money managing spouse" to say "I'm not telling you or asking you what you want to do with that money."
There's more to financial planning than just the money. It's the relationships that get involved and our ability to help them make good decisions that's important.
InsuranceCat
New Member
- 11
The PIV is an optional living and optional death benefit. If you dont want it you can take it off at any time (you just cant put it back on).
If you pass, the remaining spouse can continue the contract, or take the lump sum accumulation value (account value) or take the PIV value as a 5 year annuitization (5 payments over 5 years).
The disclosures, Statement of Understanding that the client and agent signed, as well as the marketing material is all very clear using simple language to describe how the 222 has 2 ways to get to your objective. Basically a short-term viewpoint or a long-term viewpoint. The client also gains flexibility of anywhere in the middle; its just the PIV gets proportionally reduced. Obviously the company is giving a bonus because the incentive helps achieve the company's goal. The video is also clear (albeit speaking rapidly) in describing the product's features.
Using life insurance and annuities for college planning may be valid and suitable; it all depends on your situation. Since your wife is already older than 59.5, then using a retirement annuity may come into play probably also because she wants safety. She also expanded her estate by buying the 222, basically making more future money for you and your children. How she wants to do it is up to her while she is alive which is her right as the contract owner.
The 222 works well for situations where people want their money to last longer than 10 years. Also for qualified funds where people want a DIY pension with cash refund and survivorship. Most pensions also do not have benefits that go past spousal, so the 222 can be designed to take care of both parents and have the rest go to the kids without any commitment other than the original 10 years surrender charge. You generally want qualified money to be spread out over long periods of time rather than withdrawing all at once. Even ignoring the bonus, the accumulation growth potential is competitive for an A+ carrier in this low interest rate high volatility economic environment.
If you pass, the remaining spouse can continue the contract, or take the lump sum accumulation value (account value) or take the PIV value as a 5 year annuitization (5 payments over 5 years).
The disclosures, Statement of Understanding that the client and agent signed, as well as the marketing material is all very clear using simple language to describe how the 222 has 2 ways to get to your objective. Basically a short-term viewpoint or a long-term viewpoint. The client also gains flexibility of anywhere in the middle; its just the PIV gets proportionally reduced. Obviously the company is giving a bonus because the incentive helps achieve the company's goal. The video is also clear (albeit speaking rapidly) in describing the product's features.
Using life insurance and annuities for college planning may be valid and suitable; it all depends on your situation. Since your wife is already older than 59.5, then using a retirement annuity may come into play probably also because she wants safety. She also expanded her estate by buying the 222, basically making more future money for you and your children. How she wants to do it is up to her while she is alive which is her right as the contract owner.
The 222 works well for situations where people want their money to last longer than 10 years. Also for qualified funds where people want a DIY pension with cash refund and survivorship. Most pensions also do not have benefits that go past spousal, so the 222 can be designed to take care of both parents and have the rest go to the kids without any commitment other than the original 10 years surrender charge. You generally want qualified money to be spread out over long periods of time rather than withdrawing all at once. Even ignoring the bonus, the accumulation growth potential is competitive for an A+ carrier in this low interest rate high volatility economic environment.
