UPDATED: Nov 30, 2018
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Allianz is a global company operating in many different countries. They have billions in assets and offer different products depending on the country. In the U.S., Allianz offers mainly life insurance and annuities, competing with companies like Prudential and MetLife, both of which have the name and brand recognition that Allianz lacks.
Allianz Life Insurance Company of North America operates in all states with a focus on retirement planning. Like many such companies, they have a separate company in New York; the main insurance company is headquartered in Minneapolis.
Large companies that are based in other countries often face something of an uphill battle when it comes to the American market. Even though they have been operating in the U.S. for over 100 years, Allianz remains a foreign company and may not be viewed the same way as an American-born insurer – we’ll take a look at their reputation and where they stand in a very competitive market.
Allianz was founded in Berlin in 1890, providing marine and accident insurance. Three years later, they expanded to London, and in 1904 opened operations in the United States. By the time the First World War began the company had moved into several other countries and were the largest marine insurer in Germany.
The company continued to expand into new markets over the following years, while also adding new products, including auto insurance in 1918. In spite of having their headquarters bombed during the Second World War, Allianz survived those difficult years and moved their operations to Munich after the war left Germany divided.
The decades following the war saw enormous growth and expansion, with offices established in multiple countries and acquisitions of a number of companies around the world, eventually bringing Allianz into the ranks of the world’s biggest players in the insurance game.
Allianz today operates in 70 countries and employs more than 140,000 people. The Insurance Information Institute ranks them as the third largest insurance company in the world based on 2014 assets.
In the U.S., Allianz has focused its operations on the retirement planning market, providing life insurance and annuity products. Their products are sold through agents and financial planners across the country. Allianz does not currently offer online quoting, nor do they sell products directly.
Allianz is also known for providing travel insurance products to Americans and in other nations across the globe through Allianz Global Assistance. You can read our review of the travel insurance company here; this review will focus on the life insurance company.
Allianz life insurance products are pretty focused – they aim at the market seeking to plan for retirement and leave a legacy for loved ones. You won’t see the kind of simple term life or final expenses planning products that other life insurance companies offer as budget plans for those who are seeking basic coverage at a low price.
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Allianz writes an incredible array of products across the globe, but in North America they are focused on retirement products and life insurance.
The Allianz website lists only one type of life insurance product, and that’s fixed index life. This is a particular type of universal life insurance that includes an investment aspect with varied opportunities for growth. Investments are tied to a particular index that determines how the cash accumulation occurs.
Allianz offers two fixed index universal life insurance products, one for individuals and another for couples who want a survivorship policy option.
Allianz Life Pro+ Fixed Universal Life Insurance is the main life product for individuals. Like basic universal life, this policy has a death benefit that can be left to the beneficiary income-tax free, as well as paying for final expenses and other costs left behind after death.
Like a standard universal life product, the Pro+ has a cash accumulation account, but as a fixed index policy the growth of that product is tied to an index that can be selected based on the financial needs of the policyholder.
The Pro+ product can be issued between the ages of 18-80, and there is also a juvenile class for issue between the ages of 0-17.
Minimum death benefit at issue is $100,000, with coverage available up to $65,000,000. The minimum monthly premium is $25.
The plan offers three death benefit options, which can be changed after the first year, unless you want to choose the third option:
- Level death benefit equal to the issued benefit amount.
- Increasing death benefit that includes the issued amount along with the total of the cash accumulation account, which grows over time based on the options selected.
- Return of Premium, which pays out the death benefit amount plus the total of all premiums paid during the policy period. This option must be selected at issue and can’t be chosen later.
The policy offers several premium payment options, including monthly, quarterly, semi-annual, and annual.
There is also a Premium Deposit Fund rider that allows a single lump sum premium payment from which the annual premiums will be withdrawn. There are 3-10 year premium deposit plans available.
Two accelerated death benefit riders are available: a Chronic Illness rider and a Terminal Illness rider. These allow the policyholder to receive benefits prior to death in a qualifying illness situation.
The Pro+ policy has a number of fees associated with it:
- A 5% premium charge fee
- A monthly insurance cost charge that is based on the policyholder’s class (age, gender, health status)
- A monthly policy charge of $7.50
- A monthly expense charge, also based on the policy class
There is also a 10-year decreasing surrender charge.
As a fixed index universal policy, the Pro+ invests the cash accumulation into one of these four options:
- Barclays US Dynamic Balance Index
- A blended index comprised of Dow Jones, Barclays, EURO STOXX, and Russell 2000
- A blended index with a 2% annual floor
- S&P 500 Index
There are a number of riders that can be added to this policy:
- Inflation Protection
- Waiver of Specified Premium
- Enhanced Liquidity
- Enhanced Cash Value
- Additional Term
- Other Insured Term
- Long Term Care Accelerated Benefit
- Child Term
- Loan Protection
Life Pro+ Survivor
Life Pro+ Survivor is a similar policy, but designed to protect two people under one policy. Like the individual plan it is a fixed index universal life policy, but it pays out on the death of the second person listed on the policy and not the first. There is an optional First-to-Die rider that can be added to the policy to provide a death benefit when the firs insured dies.
This policy allows the cash value, which accumulates in an account linked to an index just like the Pro+ above, to be accessed tax-free as needed.
Issue age for the Pro+ Survivor is between 30 and 80 years old. The minimum death benefit for this product is a little higher at $200,000, with the same maximum of $65,000,000. Death benefit options are the same as the individual policy.
This policy offers most of the same rider options as the individual. The policy is much the same as the individual version with a few changes made to accommodate covering two people.
Allianz writes three types of annuities to provide income for retirement as well as provide a death benefit.
Fixed Index Annuities
These are designed to work in a similar manner to the life insurance policy we just discussed; only they are more aimed towards investment for supplemental income purposes and less towards providing a death benefit.
These annuities are tied to an index, which determines the level and rate of growth. They combine investment with the protection of an annuity by tying the growth to the index without actually putting the money into the market.
Allianz writes several different fixed index annuities, differing mainly based on the index and other investment details:
- Allianz 222
- Allianz 360
- Allianz 365i
- Essential Income 7
- Core Income 7
- Retirement Foundation ADV
These allow the investor to select where they’d like to see the money invested; these annuities do involve some risk and can result in losses. They also include greater growth potential than some other annuities.
Allianz has two variable annuity options: The Allianz Visions Variable Annuity and the Allianz Connections Variable Annuity. Both are designed to create growth for retirement income, but they have a few differences.
The Visions policy has a base contract option along with a bonus option, while Connections has just the base. Both have an initial payment of $10,000 minimum and a seven-year withdrawal schedule, although the details of that schedule vary.
Index Variable Annuities
Combining index fixed and variable annuities, the index fixed annuity allows a variety of options for growth including the use of indexes to increase the investment.
The Alliance Index Advantage is designed to provide both growth potential and protection for the investment. There are two index strategies as well as a variety of investment options. This annuity has a six-year withdrawal schedule.
Like the other plans, these can provide both a death benefit and tax-deferred retirement income.
Determining the right annuity for your needs – or even whether annuities are a good choice – requires a lot of research, and often the assistance of an expert. When choosing an expert, its best to go with a third-party that is not incentivized by selling a policy.
Quoting and Premiums
Because Allianz doesn’t offer online quoting, we are unable to provide a sample rate. Furthermore, they write different insurance products than those we normally quote, so it wouldn’t be a fair comparison.
Normally, we test rates on term life insurance policies, a product not available from Allianz. Their life products are designed to meet a specific need, and it’s best to discuss with a financial advisor whether or not that type of policy will work for your particular situation.
We would not expect Allianz to offer the least expensive option available for life insurance. There are a few reasons for that. First of all, there’s the fact that they write only through agents or financial advisors, who take a commission from every sale, increasing the price. Second, they are not positioned as a budget or low-cost insurance company. They’re aimed at people who want permanent coverage along with an opportunity for investment and growth.
It is also fairly well-known in the independent financial advisor industry that these types of insurance policies come with hefty premiums. Those looking for simple term life coverage would be better served with a different company.
Allianz accepts claims either by phone or online.
The toll-free claims line is available Monday-Friday 7 a.m. through 6 p.m. and until 5 p.m. on Fridays. The number to call is 1-800-950-1963, except for Variable Annuity claims, which are handled via a different line at 1-800-624-0197.
There is also a claims form that can be filled out online to open a claim for any of the products. This is somewhat unusual for this type of company, but becoming more popular and more expected by customers as well. This allows claims to be filed any time of day or night.
The website notes that all beneficiaries on the policy will be notified directly and receive a claims package in the mail that they can use to submit the claim.
Allianz states that they aim to process claims within 10 days of filing, which is a fair amount of time for a life insurance claim. They do note that claims processing time can vary – that’s standard, since every claim is a little different.
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Customer Feedback and Ratings
Allianz Life Insurance Company of North America has an A+ rating with the Better Business Bureau and has been accredited since 1972. There are only 27 complaints against the company in the past three years, 11 of which were closed in the past 12 months. That’s a very low number considering how large this company is.
Most life insurance and financial services companies of this sort do tend to have a low complaint volume, but this is particularly low given that Allianz is a huge company.
ConsumerAffairs.com has more complaints listed, with 66 ratings. Of the 66 ratings, 48 of them are rated as one out of five stars. There seems to be some confusion on the part of the reviewers, however, as multiple complaints regarding Allianz Global Services (the travel insurance part of Allianz) are mixed in with complaints regarding the annuities division. This tends to skew the numbers in terms of complaint volume; not all 66 complaints relate to Allianz Life Insurance of North America.
The complaints that do focus on the annuities seem to focus on difficulty with claims, some of which can be attributed to policyholders who did not clearly understand the terms of their contract, although there are some complaints regarding poor customer service.
It doesn’t seem that the customer complaints were out of line in terms of not understanding the terms of the products. In 2012 Allianz faced a $10 million settlement in a multi- state lawsuit accusing the company of unfairly and deceptively representing the suitability of their annuity products to customers. The suit focused on “two-tier” annuities.
The suit resulted not only in a settlement but also in required corrective action by Allianz in 44 states in regards to how they represent these annuity products to potential customers. Allianz responded to the suit with insistence that there was no wrongdoing, and agreed to make what they called “minor modifications” to their practices.
A lawsuit is always something that perks up interest and raises concerns, although suits of this nature aren’t always indicative of a major problem with the company.
What is important to note is that annuities overall tend to leave some investors unhappy with the results. As a general rule, financial experts don’t recommend annuities as the best choice for retirement income, and Allianz is no different. Annuities tend to have a lot of fees and not as much return on investment as most people would hope.
This article in particular, looks both at annuities in general and specifically Allianz annuity offerings and breaks down some of the things to consider before buying. Failure to learn about the fees, charges, and penalties as well as the reality of the potential for growth can lead to some very disappointed customers.
With that aside, Allianz does generally appear have a pretty solid reputation. The complaint volume is low, and the company holds a solid position in the market. In spite of the lawsuit, which points to a very particular and specific issue, there aren’t any major concerns regarding Allianz being a reputable company.
Allianz focuses all of their products on retirement planning, even their very specific type of life insurance. As a result, their products are going to appeal to an equally specific market. Those in search of traditional life insurance, especially term coverage, will need to look elsewhere, as Allianz doesn’t write that type of insurance.
Because of the heavy emphasis on investments and the investment choices that need to be made with these products, Allianz is best suited to those who are pretty savvy in terms of how these investment work, what they really want or need out of the products, and what they can expect in terms of return on investment. A good, trustworthy financial advisor is also your best bet when choosing products like those offered by Allianz.
Those who are looking to get the best price on a life insurance policy should consider another company, as Allianz is unlikely to fit into the budget shopper’s comparison list. But if you’re in the market to combine a death benefit for your family with some form of investment and retirement income, Allianz is worth a look.
For a list of companies that we recommend, visit our Best Insurance Companies page.