Allianz Life Insurance Review

Allianz Life Insurance
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Although they are one of the biggest insurance companies in the world, Germany-based Allianz isn’t particularly well known in the United States. Compared to the big players whose brands are household names, Allianz is a hardly on the radar; however, they rank as the third largest insurance company in the world. In fact, they are the 21st largest public company in the world overall, according to Forbes 2014 rankings.

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 Overview

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 doesn’t currently offer any online quoting, nor do they sell any 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.

Products

Allianz writes an incredible array of products across the globe, but in North America they are focused on retirement products and life insurance.

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.

Life Pro+

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:

  1. Level death benefit equal to the issued benefit amount.
  2. 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.
  3. 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.

Annuities

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
  • Signature 7
  • MasterDex 7
  • Aliianz Endurance Plus

Variable Annuities

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

Since Allianz doesn’t have any online quoting, we can’t 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, which aren’t 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 cheapest available option 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 aren’t 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.

Claims

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.

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 14 complaints against the company in the past three years, and only four of those 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 77 total reviews of the company. 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 77 complaints relate to Allianz Life Insurance of North America. In fact, it’s reasonable to guess the actual number is about half of that.

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.

Bottom Line

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.

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Review Information

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Comments

  1. Kenneth Crawford says

    As the complaint above I purchase an annuity in 2006 and was told if I did not touch the money for 10 years my money would double and after the 10 years I could withdraw the full amount. I was also told money would earn 7%. We had been using the same financial advisor since 1999. She was very friendly and came to several of our homes and at other times would take out to eat to discuss our investments. She shared some personal information with us and we shared personal info with her. We felt like she was a personal friend I was age 61 when she took my $75,000 in this 10 Allianz annuity. My wife and I did not know this was an annuity investment nor did the agent tell us what or how annuity works. In 2015 we found out she had been lying to us and she was terminated from the company she worked for. After that we found out after the 10 years is up I can only withdraw 5% a year over 20 years which will mean I will be age 92. Once me and my wife and I die the money ends I our sons don’t get any money given to our sons. The $75,000 I invested went down to $52,000,$53,000 and the life benefit went down to that amount. I don’t understand how they could have my money for 10 years and the current value is still so low. Makes me think that Allianz is not an honest company. That’s not my only problem. This investment advisor did not get any type of license until 2008. Her brother is a broker/investment broken and she wrote up the investments and she was either signing his name or sending him the contracts to sign. She has since been investigated and lost her license. Her brother is still working for investment company. We have hired an attorney and have written few letters to her and her brother but no response yet. That contract with Allianz was fraud because she did not have a license and her brothers name appears on that contract and also many of our other investments. We never met her brother and he is 400 plus miles away from us. We have not contacted Allianz to explain what happened yet. We cannot afford to sue anybody and we will only get $7500 a year. $7500 a year does not help our retirement life. We sometime cannot afford our medications and we cannot afford to payoff any of our loans. Do you have any suggestions or can you help us. We are desperate for help. Thanks.

    • Eric Stauffer says

      Hi Kenneth,

      I am sorry to hear about your situation.

      While I can understand you may be a little skeptical about meeting with another financial planner, I would recommend sitting down with a FEE-BASED advisor that charges you a flat fee for advice.

      The problem with the advisor you worked with through Allianz, is they are glorified sales people who are paid based on selling Allianz products. Their interests do not completely align with their “clients.” A fee-based advisor is not incentivized to sell you certain products, but rather give you a legitimate financial plan based around your current situation.

      Hope that helps.

      Best,
      Eric Stauffer

  2. Jack says

    If anyone is thinking of purchasing an Allianz product reconsider and find another company! I have been involved in a two year running dispute with this unscrupulous company! I was sold an annuity and was told it had a 10 year waiting period before I could receive my money! I was told that the money over that ten year period would double due to the fact that I would be paid 7% interest! Truth be told, I found out years later that it was not a 7% , 10 year growth period it was actually a 30 year 2.2% annuity! When this fraudulent sales practice was brought to the attention of the Allianz corporate folks I was told basically – too bad, you bought it, deal with it! There was no discussion or compromise basically I was told tough luck! I found the people that I spoke with and dealt with at the company rude , condescending and far from helpful! Again, if you’re thinking about purchasing an Allianz product I have one word for you – DON’T!!!

    • Debbie T says

      Jack, what was the name of the annuity, such Allianz 222 Annuity. Also, was it a fixed index annuity or something else. Please advise. I’m in the middle of investing with Allianz, but haven’t signed yet. Thank you. Hope you get some results.

      • Jack says

        Hi Debbie,
        My annuity is the Allianz Rewards deferred variable annuity! My advice is to run away from this Company as fast as you can! Do some research online and you will find out that Allianz has had numerous class-action lawsuits filed against it by upwards of 300,000 people for doing exactly what they did to me which was completely lying and distorting the facts about the annuity, it’s duration and how it actually worked! I was told nothing but lies and when you see what the annuity actually will pay it is nothing like what you were told at the sales pitch! I was told my money would double in 10 years and that I would have control of that money at that time! The truth is that it was a 30 year annuity and I can only get my hands on 5% of my own money each year for 20 years after the 10 year growth period! Honestly, do some research before you put any of your money into this fraudulent outfit! I’m sorry I didn’t respond sooner but I just saw your post now

        Jack

  3. Kate says

    We have just purchased an annuity from Allianz and we are very concerned. I have now read some disturbing information about this company. What should we do? We also have investments through Morgan Stanley. We need someone that is very honest as we can not afford to loose our investments. Your help is appreciated.

    • Eric Stauffer says

      Hi Kate,

      I would recommend contacting a local “FEE-BASED” financial planner to look over your finances. They can give you personalized advice for your specific situation, and they are not incentivized by commissions on financial products.

      Best,
      Eric Stauffer

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