The Ultimate Guide to US Insurance Strategy: Allianz FIUL North America Fixed Index Universal Life Insurance

Ⅰ.Allianz – Company Overview

Allianz SE, a German company, is the largest insurance company in Europe and one of the largest insurance and asset management groups in the world. The Allianz Insurance Group was founded in Berlin, Germany, in 1890 and has a history of 129 years. Its headquarters are located in Munich, the capital of Bavaria, Germany. It is currently the largest financial group in Germany and one of the largest financial groups in Europe.

In 2012, it ranked 28th on the Fortune 500 list. On July 19, 2018, the Fortune Global 500 list was released, and the Allianz Insurance Group ranked 38th. In terms of premium income, Allianz Group is the largest insurance company in Europe, and its property insurance premium income has long ranked first in the world. Its life insurance premium income also ranks among the top in the world, and its comprehensive premium income has ranked first in the world in some years. It is one of the largest insurance companies in the world.

Today, Allianz Life and Allianz Life of NY are the only subsidiaries of the Allianz Group that offer life insurance in the United States.

Famous Claims Case In 1906, it paid economic losses to some customers caused by the San Francisco earthquake in the United States.

In 1912, when the large passenger liner Titanic sank, AGCS, a professional marine insurance company under Allianz, as the lead insurer of the liner, needed to pay about 70 million German marks in insurance, which exceeded Allianz’s payment capacity at the time, but the company resolutely raised insurance funds through selling and mortgaging assets, and calling on shareholders to contribute their own assets, completing the payment obligation stipulated in the insurance contract.

In 2001, after the “9/11 incident” in the United States, the Allianz Group became one of the insurance companies with the largest amount of net claims paid, with a total of up to 1.5 billion euros.

Financial Credit Rating With strong financial support and the company’s consistent pursuit of success, Allianz has won A-level evaluations from three of the four major international credit rating agencies. A.M. Best has even recently raised the rating of Allianz Life to “A+.” Standard & Poor’s gave Allianz an “AA,” while Moody’s gave Allianz an “A2” in its latest evaluation.

Ⅱ.Allianz – Product Introduction

Allianz is a life insurance company that differs from most other life insurance companies in that it focuses on cash value accumulation and retirement planning. Its flagship product is the Fixed Index Universal Life (FIUL), which emphasizes that the product can be linked to global indices, set as a fixed interest rate, or a combination of both. The allocation ratio can be freely adjusted, and the product is mainly designed for cash value accumulation and death benefit protection.

Allianz’s two main products are Allianz Life Pro+ Elite and Allianz Life Pro+ Survivor. The primary goals of both products are death benefit protection and cash value accumulation. The main difference between the two products is that Allianz Life Pro+ Survivor covers two insured individuals (usually a married couple), and the payout is made only when both individuals have passed away. This product is often used for estate planning and wealth transfer and is cheaper than two separate policies.

Allianz Life Pro+ Elite is available to customers aged 0 to 80 and offers coverage ranging from $100,000 to $65 million. This product is primarily used for cash value accumulation.

We will focus on introducing Allianz Life Pro+ Elite:

1. Flexible choices to meet future financial needs

Allianz Life Pro+ Elite offers flexible choices that allow you to access cash value when you need it, to supplement retirement, children’s education, weddings, entrepreneurship, or other financial needs.

Allianz Life Pro+ Elite also allows you to adjust your premiums to meet your financial goals.

2. Insurable age and death benefit

You must be under 80 years old to purchase Allianz Life Pro+ Elite.

The minimum initial premium is determined based on age, gender, risk class, death benefit, and additional riders. The minimum death benefit for the insured starts at $100,000, and the maximum death benefit is $65,000,000.

When the insured reaches the age of 120, the death benefit equals the accumulated cash value of the policy.

If the policyholder chooses to pay premiums for more than 10 years, the death benefit can be increased by 10% (the increased portion is subject to taxation).

The death benefit for Chinese customers must be at least $1,000,000.

3. Flexibility in payment methods

Available payment methods include:

annual payment, semi-annual payment, quarterly payment, monthly payment, etc.;

Premium Deposit Found (PDF) rider: Combines the advantages of life insurance with the simplicity of a single lump-sum payment. By submitting a total payment amount to the PDF, the annual premium can be automatically transferred to the life insurance policy. (PDF premium discount rate of 2%; the premium discount rate does not apply to the first-year premium; the insurance premium discount rate is guaranteed every year and will never be less than 0.25%)

This feature is available at no additional cost but may not be available in all states.

4. Risk class

Available risk classes include:

Non-Smoker (18-80 years old): Preferred Plus, Preferred, Standard Smoker (18-75 years old): Preferred Tobacco, Standard Tobacco Juvenile: (0-17 years old)

5. Guaranteed 10-year policy continuation

If you pay the minimum premium required for the first 10 policy years and do not take any policy loans or withdrawals, your policy will be guaranteed to continue for 10 years or until you reach age 75, whichever is earlier but not less than five policy years.

6. Death benefit payout options

You can choose the death benefit payout option that best suits your needs. Since your needs and goals may change, you also have the opportunity to change your death benefit option after the first policy year.

Death benefit option A (level): The death benefit payout equals the specified account value.

Death benefit option B (increasing): The death benefit payout equals the specified account value plus the accumulated cash value in the account.

Death benefit option C (return of premium): The death benefit payout equals the specified account value plus the premiums you paid into the policy. This option can only be chosen in certain circumstances.

7. Free riders

Chronic Illness Accelerated Death Benefit Rider

Terminal Illness Accelerated Death Benefit Rider

8. Three flexible withdrawal options

During the policy’s active period, Allianz Life Pro+ Elite offers access to the policy’s cash value through policy loans and withdrawals without incurring surrender charges:

Indexed loan: This option allows policyholders to borrow up to 5% of the policy’s cash value per year, with the loan interest rate potentially offset by the returns of the indexed strategy. If there are no returns from the indexed strategy, loan fees will not be offset.

Fixed interest loans: Policyholders can borrow at a fixed interest rate of 2.91% per year for years 1-10 and 1.96% per year for year 11 and beyond, with a 2% loan offset.

Withdrawals/partial surrenders: Policyholders can withdraw funds from the policy’s cash value, which will reduce the death benefit and cash value accordingly.

9. Policy charges/fees

Premium charge: The premium charge is 8% for policy years 1-9 and 4% for policy year 10 and beyond.

Monthly insurance cost charge: This charge is based on factors such as age, gender, risk classification, and death benefit and is deducted on a monthly anniversary.

Monthly policy charge: A monthly policy charge of $7.5 is deducted.

Monthly expense charge: This charge is calculated based on factors such as the insured’s gender, age, specified amount, and risk classification and is a monthly fee per $1,000 of coverage.

Surrender charge: The surrender charge decreases annually for the first 12 years based on factors such as age, gender, death benefit, and risk classification.

10. Flexible Index Tracking Strategy

The strategy for tracking indices can be adjusted once a year.

Allianz True Balance: S&P 500® Index (50%) and Bloomberg Barclays US Aggregate Bond Index (50%)

Blended Index: Dow Jones Industrial Average (35%), Bloomberg Barclays US Aggregate Bond Index (35%), EURO STOXX 50® (20%), and Russell 2000® Index (10%)

Ⅲ.Allianz – Case Study

Allianz Life Pro+ EliteSM Fixed Index Universal Life Insurance policy for Alice, a 28-year-old female non-smoker in good health with a coverage amount of $3,316,592:

Annual premium of $50,000 for 5 years, total premium of $250,000

Index strategy selection for the policy:

Blended Index annual point-to-point 34%

Bloomberg US Dynamic Balance II ER Index annual point-to-point 33%

PIMCO Tactical Balanced ER Index annual point-to-point 33%

Policy Analyse:

At the end of the 5th policy year, the cash value account of the policy is $262,708, which has exceeded the total premium paid of $250,000 in 5 years.

At the end of the 16th policy year, the cash value account of the policy is $523,804, which is twice the total premium paid.

At the end of the 40th policy year, the cash value account of the policy is $2,936,458, and the death benefit begins to grow.

At the end of the 57th policy year, when Alice is 85 years old, the policy account has accumulated $10,495,418, and the death benefit is $11,020,189. At this point, if Alice chooses to surrender the policy, she can receive $10.49 million from the policy, and if she passes away, her beneficiaries can claim $11.02 million.

IRR

Compared with AIA’s Savings Insurance Plan – Abundant Future in Hong Kong, which has an average annual compound interest rate of 6.5% after 100 years of premiums, Allianz’s IUL has achieved the same level of return as AIA’s Savings Insurance Plan in just over 30 years, while also enjoying a high death benefit!

Ⅳ.

1. Allianz – Comprehensive Evaluation

Allianz is a trustworthy brand, and its strong financial strength is well demonstrated by its famous past claim cases.

It is worth mentioning that in 2006, the China Social Security Fund became a customer of the Allianz Group, and PIMCO, a subsidiary of Allianz, became one of the overseas investment managers for the Social Security Fund, with a total investment share of 15%.

Of course, scale is not the decisive factor in purchasing life insurance products from a company, unless you can be sure that it can provide you with the best value, the most suitable allocation, and the highest quality after-sales service.

In the current economic environment, high-net-worth individuals in China are always facing many challenges such as medical environment, overseas investment, children’s education, and wealth inheritance. If you want to achieve a balance between conservatism and aggressiveness, and ensure worry-free family life while preserving and increasing your wealth, Allianz’s fixed indexed universal life insurance is worth considering.