Standard Annuity Features | Available Investment Options | Additional Features |
• Five fixed annuitization options (Annuity Options)• Free
withdrawal privilege allows you to withdraw up to 10% of the total Annual Contribution Amounts (the amount that is subject to market value adjustment) during the seven-year market value
adjustment period• Minimum distribution program for certain tax-qualified Contracts• Guaranteed death benefit (Traditional Death Benefit) |
• 31 index-linked investment options (Index Options) based on different combinations of five credit calculation methods (Crediting Methods), four nationally recognized third-party broad based equity securities indexes and an exchange-traded fund (Index or Indexes), and three time periods for measuring Index performance (Term) | • Income Benefit: Provides guaranteed lifetime income (Income Payments) based on a percentage of your investment value that can begin as early as age 50, or as late as age 100. This benefit is automatically included in the Contract, cannot be removed, and has an additional rider fee.• Maximum Anniversary Value Death Benefit: Locks in any annual investment gains to potentially provide a death benefit greater than the Traditional Death Benefit. This optional benefit must be selected at issue, cannot be removed, and has an additional rider fee. |
The risk of loss can become greater in the case of an early withdrawal (a withdrawal taken within seven years after a purchase payment is applied to an Index Option) due to the market value adjustment. The maximum loss from a market value adjustment on a full withdrawal is 10% of Contract Value, and on a partial withdrawal it is 10% of the amount withdrawn. Withdrawals will be subject to federal and state taxation, and withdrawals taken before age 59 1⁄2 may also be subject to a 10% additional federal tax. If this is a Non-Qualified Contract, a withdrawal will be taxable to the extent that gain exists within the Contract. A Non-Qualified Contract is a Contract that is not purchased under a pension or retirement plan that qualifies for special tax treatment under sections of the Internal Revenue Code (the Code). |
Crediting Methods Currently Available Only the Index Performance Strategy offers 1-year, 3-year, and 6-year Terms. All other Crediting Methods only offer 1-year Terms. |
Indexes Currently Available with 1-year Terms |
Indexes Currently Available with 3-year and 6-year Terms (Index Performance Strategy only) |
• Index Protection Strategy with Declared Protection Strategy Credit (the
DPSC is the return you receive if Index performance is zero or positive) • Index Protection Strategy with Cap • Index Precision Strategy (only available before Income Payments begin) • Index Guard Strategy (only available before Income Payments begin) • Index Performance Strategy (only available before Income Payments begin) |
• S&P 500® Index • Russell 2000® Index • Nasdaq-100® Index • EURO STOXX 50® • iShares® MSCI Emerging Markets ETF |
• S&P 500® Index • Russell 2000® Index |
Crediting Methods, Indexes, and the 3-year and 6-year Terms may not be available in all states as detailed in Appendix D. |
Crediting Method Highlights All Crediting Methods provide a level of protection against negative Credits from negative Index performance, and a limit on positive Credits from positive Index performance. Credits are the return you receive from the Index Options. |
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Negative Index Performance Protection | Positive Index Performance Participation Limit | |
Index Protection Strategy with DPSC |
• 100% – You will never receive a negative Credit |
• Declared Protection Strategy Credits (DPSCs) – DPSCs cannot be less than 0.50% |
Crediting Method Highlights All Crediting Methods provide a level of protection against negative Credits from negative Index performance, and a limit on positive Credits from positive Index performance. Credits are the return you receive from the Index Options. |
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Negative Index Performance Protection | Positive Index Performance Participation Limit | |
Index Protection Strategy with Cap |
• 100% – You will never receive a negative Credit |
• Caps (the upper limit on positive Index performance) – Caps cannot be less than 0.50% |
Index Precision Strategy |
• Buffers (the amount of negative Index performance we absorb over
the duration of a Term before you receive a negative Credit) – Buffers cannot be less than 5% |
• Precision Rates (the return you receive if Index performance is zero or positive) – Precision Rates cannot be less than 3% |
Index Guard Strategy |
• Floors (the maximum amount
of negative Index performance you absorb) – Floors cannot be less than -25% |
• Caps – Caps cannot be less than 3% |
Index Performance Strategy | • Buffers – Buffers cannot be less than 5% |
• 1-year Term: Caps – Caps cannot be less than 3% |
• 3-year and 6-year Terms: Caps and Participation Rates (a percentage of Index performance) – Caps for 3-year Terms cannot be less than 5% – Caps for 6-year Terms cannot be less than 10% – Both 3-year and 6-year Terms can be “uncapped” (i.e., we do not declare a Cap for that Term) – Participation Rates cannot be less than 100% |
Variable Investment Option – AZL® Government Money Market Fund |
• | total Purchase Payments reduced proportionately for withdrawals you take (including any MVA) if you select the Traditional Death Benefit, or |
• | the Maximum Anniversary Value (the highest Contract Value on any Index Anniversary before age 91, increased by the dollar amount of subsequent Purchase Payments, and reduced proportionately for subsequent withdrawals you take including any MVA) if you select the Maximum Anniversary Value Death Benefit. |
Purchasing a Contract: Key Features at a Glance | |
Issue Age (see section 3) |
On the date we issue the Contract (the Issue Date), all Owners and the Annuitant must be either: • age 80 or younger, or • age 75 or younger if you select the Maximum Anniversary Value Death Benefit. The Owner is the person or entity designated at issue who may exercise all Contract rights. The Annuitant is the individual upon whose life we base Annuity Payments. |
Purchase Payment Standards (see section 3) |
• $5,000 minimum initial Purchase Payment due on the Issue Date. • We restrict additional Purchase Payments during the Accumulation Phase. Each Index Year before the Income Period you cannot add more than your initial amount without our prior approval. An Index Year is a twelve-month period beginning on the Index Effective Date or a subsequent Index Anniversary. Your initial amount is all Purchase Payments received before the first Quarterly Contract Anniversary of the first Contract Year. A Quarterly Contract Anniversary is the day that occurs three calendar months after the Issue Date or any subsequent Quarterly Contract Anniversary. A Contract Year is any period of twelve months beginning on the Issue Date or a subsequent Contract Anniversary. A Contract Anniversary is a twelve-month anniversary of the Issue Date or any subsequent Contract Anniversary. We allow you to add up to the initial amount in the remainder of the first Index Year, and each Index Year thereafter before the Income Period begins. The minimum additional Purchase Payment we will accept is $50. • $3 million maximum in total Purchase Payments unless we give prior approval for a higher amount. • We do not accept additional Purchase Payments during the Income Period or the Annuity Phase. |
Purchasing a Contract: Key Features at a Glance | |
Allocation of Purchase Payments and Contract Value Transfers (see section 3) |
You can allocate your Purchase Payments to any or all of the Index Options available under your Contract. We only allow assets to move into the Index Options
on the Index Effective Date and on subsequent Index Anniversaries. • As a result, we hold Purchase Payments in the AZL Government Money Market Fund until we transfer them to your selected Index Options according to your instructions. For additional Purchase Payments we receive after the Index Effective Date, we transfer the amounts held in the AZL Government Money Market Fund to your selected Index Options on the next Index Anniversary. However, you cannot allocate Purchase Payments to the AZL Government Money Market Fund. • On each Index Option’s Term End Date, you can transfer Index Option Value (the portion of your Contract Value in a particular Index Option) between Index Options. • We do not allow assets to move into an established 3-year or 6-year Term Index Option until the Term End Date. • Purchase Payments you allocate to an Index Option must be held in the Index Option for the full Term before they can receive a Credit. Therefore, additional Purchase Payments we receive after the Index Effective Date that you allocate to a 1-year Term Index Option are not eligible to receive a Credit until the second Index Anniversary after we receive them, or the fourth Index Anniversary after we receive them for allocations to a 3-year Term Index Option, or the seventh Index Anniversary after we receive them for allocations to a 6-year Term Index Option. |
Daily Adjustment (see “What is the Daily Adjustment?” in this Summary and section 5) |
• We apply a Daily Adjustment if before the Term End Date you take a full or partial withdrawal, or when we deduct Contract
fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. All withdrawals you take are subject to the Daily Adjustment, even MVA-Free Withdrawals. • The Daily Adjustment takes into account any Index gains subject to the applicable DPSC, Precision Rate, Cap, and/or Participation Rate, or either any Index losses greater than the Buffer or Index losses down to the Floor, but in the form of the estimated present value. Therefore, the Daily Adjustment could result in a loss beyond the protection of the Buffer or Floor. However, the Daily Adjustment for the Index Protection Strategy with DPSC and Index Protection Strategy with Cap cannot be negative. • In extreme circumstances the Daily Adjustment could result in a loss beyond the protection of the Buffer or Floor, but it cannot result in a total loss of -100%. Such losses will be greater if the amount withdrawn is also subject to a negative MVA, or is a deduction of Contract fees, expenses, or investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. |
Performance Lock (see “What is the Performance Lock?” in this Summary and section 5) |
A feature that allows you to capture the current Index Option Value during the Term. If we execute a Performance Lock for an Index Option we do not apply the Daily Adjustment to it for the remainder of the Term and the Index Option Value will not receive a Credit on the Term End Date. |
Purchasing a Contract: Key Features at a Glance | |
Market Value Adjustment (MVA) (see section 5) |
• An increase or decrease to Contract Value based on changes in interest rates if within seven Index Years of the
establishment of an Annual Contribution Amount you take a full or partial withdrawal (including an Excess Withdrawal), begin Annuity Payments, or if we pay a death benefit. An Excess Withdrawal
is the amount of any withdrawal taken during an Income Benefit Year that causes the total amount withdrawn in that year to exceed the annual maximum Income Payment. An Income Benefit Year is a
period of twelve months beginning on the Income Benefit Date or any subsequent Income Benefit Anniversary. • We do not apply an MVA to MVA-Free Withdrawals, or to deductions we make for Contract fees, expenses, or investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract. • The MVA will be negative if the corporate bond yield on the date of withdrawal is higher than the corporate bond yield on the date the Annual Contribution Amount was established, and vice versa. A negative MVA will decrease the Contract Value, and a positive MVA will increase the Contract Value. • If you take a full withdrawal, begin Annuity Payments, or if we pay a death benefit the maximum total positive or negative MVA is 10% of Contract Value. On a partial withdrawal, we limit the maximum total positive or negative MVA to 10% of the amount withdrawn. |
Product and Rider Fees (see the Fee Tables and section 6) |
Accrued daily and deducted on each Quarterly Contract Anniversary. Each fee is calculated as a percentage of the Charge Base,
which is the Contract Value on the preceding Quarterly Contract Anniversary increased by the dollar amount of subsequent Purchase Payments, and reduced proportionately for subsequent withdrawals you take (including any MVA) and
deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. All withdrawals you take reduce the Charge Base, even MVA-Free
Withdrawals. • Product fee is 0.25%. • Rider fee is 0.70% for the Income Benefit. • Rider fee is 0.20% for the Maximum Anniversary Value Death Benefit. If you select this benefit, you will pay 1.15% in total annual Contract fees (product fee plus the rider fees). |
Other Contract Fees and Expenses (see the Fee Tables and section 6) |
• $50 contract maintenance charge assessed annually if the total Contract Value is less than $100,000. • AZL Government Money Market Fund operating expenses before fee waivers and expense reimbursements of 0.66% of the average daily net assets. |
You can withdraw your Cash Value subject to any applicable federal and state taxation. Withdrawals taken before age 59 1⁄2 may also be subject to a 10% additional federal tax. | |
Free Withdrawal Privilege (see section 7) |
Allows you to withdraw 10% of your total Annual Contribution Amounts each Index Year during the Accumulation Phase and before the Income Period without
incurring an MVA. • Any unused free withdrawal privilege in one Index Year is not added to the amount available in the next Index Year. • If you withdraw more than the free withdrawal privilege we will apply an MVA if the withdrawal is taken from an Annual Contribution Amount that we established within the last seven Index Years. • Not available if you take a full withdrawal of your Cash Value or during the Income Period. If you take a full withdrawal you will be subject to an MVA on any Annual Contribution Amounts that are still within the seven Index Year MVA period. This may include amounts you previously withdrew under the free withdrawal privilege. |
Minimum Distribution Program and Required Minimum Distribution
(RMD) Payments (see section 7) |
If you own an Individual Retirement Annuity (IRA) or SEP IRA Contract, this program
provides payments to you designed to meet the Code’s minimum distribution requirements. These withdrawals: • reduce the amount available under the free withdrawal privilege before the Income Period, but • are not subject to an MVA if you exceed the free withdrawal privilege before the Income Period, and are not considered to be an Excess Withdrawal during the Income Period. |
Purchasing a Contract: Key Features at a Glance | |
Annuity Payments (see section 8) |
Annuity Payments can provide a guaranteed lifetime fixed income stream with certain tax advantages. We designed the Annuity Payments for Owners who no longer
need immediate access to Contract Value to meet their short-term income needs. • We offer five Annuity Options that provide payments for a guaranteed period, life, life with a guaranteed period, joint and last survivor, or joint and 2/3 survivor. • We base Annuity Payments on the greater of your Contract Value or Cash Value, the Annuity Option you select, and the lifetime and age of the Annuitant(s). • For an individually owned Contract, Annuity Payments can be either single or joint. |
Income Benefit (see “How Does the Income Benefit Work?” later in this Summary and section 9) |
The Income Benefit (0.70% rider fee) is automatically included in your Contract and you cannot remove it. It provides guaranteed lifetime Income Payments based
on a percentage of your Contract Value. • Once the Income Payment waiting period has expired, Income Payments can begin as early as age 50 or as late as age 100. • Unlike Annuity Payments, the Income Benefit allows access to your Contract Value and death benefit for a period of time after Income Payments begin. • Once Income Payments begin your Crediting Methods are limited to the Index Protection Strategy with DPSC and Index Protection Strategy with Cap. • The Income Benefit also includes the Income Multiplier Benefit for no additional charge, which can increase the annual maximum Income Payment after the required wait period to help pay for care if you should need it. For information on the terms used to determine your Income Payments, please see the Income Benefit Supplement. |
Death Benefit (see section 10) |
When you purchase the Contract you select either the Traditional Death Benefit (no additional fee) or the Maximum Anniversary Value Death Benefit (0.20% rider
fee). In either case, the death benefit is paid upon the first death of any Determining Life during the Accumulation Phase. • We establish the Determining Lives at Contract issue and they generally do not change unless there is a change of ownership due to divorce, marriage, or establishment of a Trust. • The Determining Life (or Lives) is either the Owner(s) or the Annuitant if the Owner is a non-individual.If a Determining Life dies during the Accumulation Phase your Beneficiary(s) will receive the greater of the Contract Value, Cash Value, or the Guaranteed Death Benefit Value. The Guaranteed Death Benefit Value is either total Purchase Payments reduced proportionately for withdrawals you take (including any MVA) if you select the Traditional Death Benefit, or the Maximum Anniversary Value if you select the Maximum Anniversary Value Death Benefit. All withdrawals you take reduce the Guaranteed Death Benefit Value, even MVA-Free Withdrawals. However, we do not reduce the Guaranteed Death Benefit Value for deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. These deductions will, however, decrease the Contract Value and Cash Value by the dollar amount withdrawn and reduce the likelihood of receiving increases to the Maximum Anniversary Value. In addition, because the death benefit is based on the greater of Contract Value, Cash Value or the Guaranteed Death Benefit Value, deductions we make for Contract fees, expenses, or authorized investment advisory fees reduce the death benefit available to your Beneficiaries. |
• Withdrawals you take (including Income Payments) reduce your Guaranteed Death Benefit Value proportionately, which means this value may be reduced by more than the amount
withdrawn. • The Maximum Anniversary Value Death Benefit cannot be less than the Traditional Death Benefit, but they can be equal. • If you change Owner(s) the death benefit may be reduced to Contract Value. |
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Material Contract Variations (see Appendix D) |
The product or certain product features may not currently be available in all states or all Contracts, may vary in your state (such as the free look), or may not be available from all selling firms or from all Financial Professionals. Your Financial Professional can also provide information regarding availability of Index Options. |
Purchasing a Contract: Key Features at a Glance | |
Customer Service (see the last page of this prospectus) |
If you need customer service (for Contract changes, information on Contract Values, requesting a withdrawal or transfer,
changing your allocation instructions, etc.) please contact our Service Center at (800) 624-0197. Our Service Center is the area of our company that issues Contracts and provides Contract
maintenance and routine customer service. You can also contact us by: • mail at Allianz Life Insurance Company of North America, P.O. Box 561, Minneapolis, MN 55440-0561, or • email at Contact.Us@allianzlife.com. |
• | If the Index Return is positive, the Protection Credit is equal to the Index Return up to the Cap. |
• | If the Index Value on the Term End Date is equal to or less than the Index Value on the Term Start Date, the Protection Credit is zero. |
• | If the Index Value on the Term End Date is equal to or greater than the Index Value on the Term Start Date, regardless of the amount of actual Index Return, the Performance Credit is equal to the Precision Rate. |
• | If the Index Return is negative and the loss is: |
– | less than or equal to the Buffer, the Performance Credit is zero. We absorb any loss up to the Buffer. |
– | greater than the Buffer, the negative Performance Credit is equal to the negative Index Return in excess of the Buffer. You participate in any losses beyond the Buffer. |
• | If the Index Return is positive, the Performance Credit is equal to the Index Return up to the Cap. |
• | If the Index Value on the Term End Date is equal to the Index Value on the Term Start Date, the Performance Credit is zero. |
• | If the Index Return is negative, the negative Performance Credit is equal to the negative Index Return down to the Floor. You participate in any losses down to the Floor. We absorb any negative Index Return beyond the Floor. |
• | If the Index Return is positive, the Performance Credit is equal to: |
– | the Index Return up to the Cap for a 1-year Term. |
– | Index Return multiplied by the Participation Rate, up to the Cap for a 3-year or 6-year Term. If the 3-year or 6-year Term is uncapped, the Performance Credit is equal to the Index Return multiplied by the Participation Rate. We apply the Participation Rate and Cap for the entire Term length; we do not apply the Participation Rate and Cap annually on a 3-year or 6-year Term. |
• | If the Index Value on the Term End Date is equal to the Index Value on the Term Start Date, the Performance Credit is zero. |
• | If the Index Return is negative and the loss is: |
– | less than or equal to the Buffer, the Performance Credit is zero. We absorb any loss up to the Buffer. We apply the Buffer for the entire Term length; we do not apply the Buffer annually on a 3-year or 6-year Term Index Option. |
– | greater than the Buffer, the negative Performance Credit is equal to the negative Index Return in excess of the Buffer. You participate in any losses beyond the Buffer. |
• The Index Precision Strategy, Index Guard Strategy, and Index Performance Strategy allow negative Performance Credits. A negative Performance Credit means you can lose principal and previous earnings. These losses could be significant. |
• Because we calculate Index Returns only on a single date in time, you may experience negative or flat performance even though the Index you selected for a given Crediting Method experienced gains through some, or most, of the Term. |
• If a 3-year or 6-year Term Index Option is “uncapped” for one Term (i.e., we do not declare a Cap for that Term) it does not mean that we will not declare a Cap for it on future Term Start Dates. On the next Term Start Date we can declare a Cap for the next Term, or declare it to be uncapped. |
What is the asset protection? | |
Index Protection Strategy with DPSC | • Most protection. • If the Index loses value, the Credit is zero. You do not receive a negative Credit. |
Index Protection Strategy with Cap | • Most protection. • If the Index loses value, the Credit is zero. You do not receive a negative Credit. |
Index Precision Strategy | • Less protection than the Index Protection Strategy with DPSC, Index Protection Strategy with Cap, and
Index Guard Strategy. Protection may be more or less than what is available with the Index Performance Strategy depending on Buffers. • Buffer absorbs a percentage of loss, but you receive a negative Performance Credit for losses greater than the Buffer. • Potential for large losses in any Term. • More sensitive to large negative market movements because small negative market movements are absorbed by the Buffer. In a period of extreme negative market performance, the risk of loss is greater with the Index Precision Strategy than with the Index Guard Strategy. |
What is the asset protection? | |
Index Guard Strategy | • Less protection than the Index Protection Strategy with DPSC and Index Protection Strategy with Cap, but more than Index
Precision Strategy and Index Performance Strategy. • Permits a negative Performance Credit down to the Floor. • Protection from significant losses. • More sensitive to smaller negative market movements that persist over time because the Floor reduces the impact of large negative market movements. • In an extended period of smaller negative market returns, the risk of loss is greater with the Index Guard Strategy than with the Index Performance Strategy and Index Precision Strategy. • Provides certainty regarding the maximum loss in any Term. |
Index Performance Strategy | • Less protection than the Index Protection Strategy with DPSC, Index Protection Strategy with Cap, and
Index Guard Strategy. Protection may be more or less than what is available with the Index Precision Strategy depending on Buffers. • Buffers may be different between 1-year, 3-year, and 6-year Terms. Buffers can also be different between Index Options with the same Term length. • Buffer absorbs a percentage of loss, but you receive a negative Performance Credit for losses greater than the Buffer. • Potential for large losses in any Term. • More sensitive to large negative market movements because small negative market movements are absorbed by the Buffer. In a period of extreme negative market performance, the risk of loss is greater with the Index Performance Strategy than with the Index Guard Strategy. • In extended periods of moderate to large negative market performance, 3-year and 6-year Terms may provide less protection than the 1-year Terms because, in part, the Buffer is applied over a longer period of time. |
What is the growth opportunity? | |
Index Protection Strategy with DPSC | • Growth opportunity limited by the DPSCs. • Least growth opportunity. • May perform best in periods of small positive market movements. • DPSCs will generally be less than the Precision Rates and Caps. |
Index Protection Strategy with Cap | • Growth opportunity limited by the Caps. • May perform best in periods of small positive market movements. • Generally more growth opportunity than the Index Protection Strategy with DPSC, but less than the Index Precision Strategy, Index Guard Strategy, and Index Performance Strategy. • Caps will generally be greater than DPSCs, but less than the Precision Rates and Caps for the Index Guard Strategy and Index Performance Strategy. |
Index Precision Strategy | • Growth opportunity limited by the Precision Rates. • May perform best in periods of small positive market movements. • Generally more growth opportunity than the Index Protection Strategy with DPSC and Index Protection Strategy with Cap, but less than the Index Performance Strategy. • Growth opportunity may be more or less than the Index Guard Strategy depending on Precision Rates and Caps. |
Index Guard Strategy | • Growth opportunity limited by the Caps. • May perform best in a strong market. • Growth opportunity that generally may be matched or exceeded only by the Index Performance Strategy. However, growth opportunity may be more or less than the Index Precision Strategy or Index Performance Strategy depending on Precision Rates and Caps. |
What is the growth opportunity? | |
Index Performance Strategy | • Growth opportunity limited by the Caps and/or Participation Rates. If we do not declare a Cap for a 3-year or 6-year Term Index Option there is no maximum limit on the positive Index Return for that Index Option. In addition, you can receive more than the
positive Index Return if the Participation Rate applies and is greater than its 100% minimum. • May perform best in a strong market. • Generally the most growth opportunity. However, growth opportunity may be less than the Index Precision Strategy or Index Guard Strategy depending on Precision Rates, Caps, and/or Participation Rates. |
What can change within a Crediting Method? | |
Index Protection Strategy with DPSC | • Renewal DPSCs for existing Contracts can change on each Term Start Date. • DPSCs are subject to a 0.50% minimum. |
Index Protection Strategy with Cap | • Renewal Caps for existing Contracts can change on each Term Start Date. • Caps are subject to a 0.50% minimum. |
Index Precision Strategy | • Renewal Precision Rates for existing Contracts can change on each Term Start Date. • If we add a new Index Option to your Contract after the Issue Date, we establish the Buffer for it on the date we add the Index Option to your Contract. Your actual Buffers cannot change once they are established. • Precision Rates are subject to a 3% minimum, and Buffers are subject to a 5% minimum. |
Index Guard Strategy | • Renewal Caps for existing Contracts can change on each Term Start Date. • If we add a new Index Option to your Contract after the Issue Date, we establish the Floor for it on the date we add the Index Option to your Contract. Your actual Floors cannot change once they are established. • Caps are subject to a 3% minimum, and Floors are subject to a -25% minimum. |
Index Performance Strategy | • Renewal Caps and/or Participation Rates for existing Contracts can change on each Term Start Date. • If we add a new Index Option to your Contract after the Issue Date, we establish the Buffer for it on the date we add the Index Option to your Contract. Your actual Buffers cannot change once they are established. • Caps are subject to a 3% minimum for 1-year Terms, 5% for 3-year Terms, or 10% for 6-year Terms. Participation Rates are subject to a 100% minimum. Buffers are subject to a 5% minimum. |
• For any Index Option with the Index Precision Strategy or Index Performance Strategy, you participate in any negative Index Return in excess of the Buffer, which reduces your Contract Value. For example, if we set the Buffer at 5% we would absorb the first -5% of Index Return and you could lose up to 95% of the Index Option Value. However, for any Index Option with the Index Guard Strategy, we absorb any negative Index Return in excess of the Floor. For example, if we set the Floor at -25%, your maximum loss would be limited to -25% of the Index Option Value due to negative Index Returns. |
• The minimum Buffer and Floor are the least amount of protection that you could receive from negative Index Returns for any Index Option with the Index Precision Strategy, Index Guard Strategy, or Index Performance Strategy. |
• DPSCs, Precision Rates, Caps, and Participation Rates as set by us from time-to-time may vary substantially based on market conditions. However, in extreme market environments, it is possible that all DPSCs, Precision Rates, Caps, and Participation Rates will be reduced to their respective minimums of 0.50%, 3%, 5%, 10%, or 100% as stated above. |
• Buffers, Floors, DPSCs, Precision Rates, Caps, and Participation Rates can be different from Index Option to Index Option. For example, Caps for the Index Performance Strategy 1-year Terms can be different between the S&P 500® Index and the Nasdaq-100® Index, and Caps for the S&P 500® Index can be different between 1-year and 3-year Terms on the Index Performance Strategy, and between the 1-year Terms for the Index Guard Strategy and Index Performance Strategy. They may also be different from Contract-to-Contract depending on the Index Effective Date and the state of issuance. |
• If your Contract is within its free look period you may be able to take advantage of any increase in initial DPSCs, Precision Rates, Caps, and/or Participation Rates by cancelling your Contract and purchasing a new Contract. |
• If the initial DPSCs, Precision Rates, Caps, and/or Participation Rates available on the Index Effective Date are not acceptable to you can: |
– cancel your Contract if you are still within the free look period, |
– request to extend your Index Effective Date if you have not reached your first Quarterly Contract Anniversary, |
– on or before the Index Effective Date, cancel the Contract and request a full withdrawal of the money held in the AZL Government Money Market Fund and receive the Contract Value less any final product and rider fees and contract maintenance charge; on or before the Index Effective Date you are not subject to an MVA or Daily Adjustment, or |
– after the Index Effective Date, cancel the Contract and request a full withdrawal of the Cash Value; after the Index Effective Date, you will be subject to an MVA and Daily Adjustment. |
• DPSCs, Precision Rates, Caps, and Participation Rates may be different between newly issued and existing Contracts, and between existing Contracts issued on the same month and day in different years. For example, assume that in August 2023 we set Caps for the Index Performance Strategy 1-year Term with the S&P 500® Index as follows: |
– 13% initial rate for new Contracts issued in 2023, |
– 14% renewal rate for existing Contracts issued in 2022, and |
– 12% renewal rate for existing Contracts issued in 2021. |
• | The Contract Value is the sum of your Variable Account Value and Index Option Values. Contract Value reflects any previously deducted Contract fees and expenses, but does not reflect Contract fees and expenses that we would apply on liquidation. The Cash Value reflects all Contract fees and expenses that we would apply on liquidation and any MVA. |
• | Your Variable Account Value is the value of the shares in the AZL Government Money Market Fund subaccount which holds your Purchase Payments until the Index Effective Date or next Index Anniversary. It reflects deduction of the fund’s operating expenses, and previously assessed contract maintenance charge, product fee, and rider fees. It changes each Business Day based on the performance of the AZL Government Money Market Fund. |
• | Your total Index Option Value is the sum of the values in each of your selected Index Options. Each Index Option Value includes any Credits from previous Term End Dates, reduced proportionately for previous partial withdrawals you took (including any MVA), and previous deductions we made for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. Amounts removed from the Index Options during the Term for withdrawals you take and deductions we make for fees and expenses do not receive a Credit on the Term End Date, but the amount remaining does receive a Credit subject to the applicable Buffer, Floor, DPSC, Precision Rate, Cap, and/or Participation Rate. |
– | On each Business Day during the Term other than the Term Start Date or Term End Date, we calculate the current Index Option Value by adding a Daily Adjustment to the Index Option Base. The Index Option Base is the amount you allocate to an Index Option. We reduce the Index Option Base proportionately for withdrawals you take (including any MVA), and deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract; we increase/decrease it by the dollar amount of additional Purchase Payments allocated to, and transfers into or out of the Index Option; and we increase/decrease it by the percentage of any Credit. |
(i) | any Index gains during the Term subject to the applicable DPSC, Precision Rate, Cap, and/or Participation Rate, |
(ii) | either any Index losses greater than the Buffer or Index losses down to the Floor (not applicable to the Index Protection Strategy with DPSC or the Index Protection Strategy with Cap), and |
(iii) | the number of days until the Term End Date. |
We will not provide advice or notify you regarding whether you should exercise a Performance Lock or the optimal time for doing so. We will not warn you if you exercise a Performance Lock at a sub-optimal time. We are not responsible for any losses related to your decision whether or not to exercise a Performance Lock. |
• | An Income Percentage for each payment type using the Eligible Person’s current age, or younger Eligible Person’s current age for joint payments. This Income Percentage is also the initial Lifetime Income Percentage for each payment type. |
• | An Income Percentage Increase for each Eligible Person based on their current age (or younger Eligible Person’s current age for joint payments). However, if there are two Eligible Person(s) the Index Options Statement will not display a single Lifetime Income Percentage for an Eligible Person who is only a Beneficiary, because only an Eligible Person who is also an Owner (or Annuitant if the Owner is a non-individual) can become a Covered Person if you select single payments. |
• | you will not receive an increase to a Lifetime Income Percentage based on that Eligible Person until the Index Anniversary that the Eligible Person (or younger Eligible Person for joint payments) reaches age 45, and |
• | you will pay a rider fee during the period you are not eligible for an Income Percentage Increase. |
• | the Income Percentage for the Eligible Person’s current age, and |
• | the Variable Account Value’s percentage of total Contract Value. |
• YOU SHOULD NOT PURCHASE THIS CONTRACT WITHOUT FIRST OBTAINING THE CURRENT INCOME BENEFIT SUPPLEMENT. We publish any changes to the Income Benefit Supplement at least seven calendar days before they take effect on our website at www.allianzlife.com/indexincomeadvrates. |
• Please discuss the Income Benefit’s appropriateness with your Financial Professional and tax adviser. |
• | You will receive Income Payments as long as a Covered Person is alive and continues to meet the requirements stated in section 2. However, Income Payments and the Income Benefit may end prematurely if you: |
– | change the Owner(s) or Beneficiary and all Covered Persons are removed from the Contract because they no longer meet the requirements stated in section 2, |
– | take an Excess Withdrawal that reduces the Contract Value to $2,000 or less, or |
– | you annuitize your Contract. However, we can convert your Income Payment to Annuity Payments as described in section 8, The Annuity Phase – When Annuity Payments Begin. |
• | If you begin Income Payments before age 59 1⁄2, the payments will generally be subject to a 10% additional federal tax. |
• | Any part of your annual maximum Income Payment that you do not withdraw in a given Income Benefit Year remains in your Contract for the remainder of that year, but is not added to the annual maximum payment available next year. |
• | Excess Withdrawals reduce your annual maximum Income Payment by the percentage of Contract Value withdrawn (including any MVA) on the next Income Benefit Anniversary. |
• | You cannot make additional Purchase Payments. If your Contract includes the Traditional Death Benefit your Guaranteed Death Benefit Value no longer increases. |
• | The Contract Value continues to fluctuate as a result of Index Option performance. However, only the Index Protection Strategy with DPSC and Index Protection Strategy with Cap are available to you. This may limit your Contract’s performance potential, and if your Contract includes the Maximum Anniversary Value Death Benefit, this may also limit your Guaranteed Death Benefit Value. |
• | The Contract Value decreases on a dollar for dollar basis with each Income Payment, Excess Withdrawal, and deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. If your Contract includes the Maximum Anniversary Value Death Benefit, this decrease in Contract Value also reduces the likelihood of locking in investment gains to the Maximum Anniversary Value. |
• | Each Income Payment and any Excess Withdrawal also reduces your Guaranteed Death Benefit Value by the percentage of Contract Value withdrawn (including any MVA), which means this value may be reduced by more than the amount withdrawn. |
• | The Income Benefit rider fee continues until the Business Day the Contract Value reduces to zero, you annuitize the Contract, or the Income Benefit ends. |
• | If your Contract also includes the Maximum Anniversary Value Death Benefit, its rider fee continues as indicated in section 6, Expenses. |
• | The free withdrawal privilege is no longer available. |
• | If you exercise the Income Multiplier Benefit, we will increase your annual maximum Income Payment for the remainder of that Income Benefit Year and the next year. To continue receiving this increase each Income Benefit Year you must reestablish eligibility. Any increase to your Income Payments as a result of this benefit will more rapidly reduce your Guaranteed Death Benefit Value. |
• | If your Contract Value reduces to zero during the Income Period for any reason other than an Excess Withdrawal or annuitization that does not convert your Income Payments to Annuity Payments, you will continue to receive your maximum available Income Payment at the previous selected payment frequency until the earlier of the death of the Owner or last surviving Covered Person. If you exercised the Income Multiplier Benefit it will also end on the Income Benefit Anniversary that occurs on or immediately after your Contract Value reduces to zero, and although you receive the maximum available Income Payment, it will be less than the amount you previously received under the Income Multiplier Benefit. |
The COVID-19 pandemic has at times led to significant volatility and negative returns in the financial markets. These market conditions have impacted the performance of the Indexes to which the Index Options are linked, as well as securities held by the AZL Government Money Market Fund. If these market conditions continue or reoccur, and depending on your individual circumstances (e.g., your selected Index Options and the timing of any Purchase Payments, transfers, or withdrawals), you may experience (perhaps significant) negative returns under the Contract. The COVID-19 pandemic and other market factors have resulted in an abnormally low interest rate environment, in which certain rates have gone negative. This low level of rates can affect the returns of an Index, the level of DPSCs, Precision Rates, Caps, and Participation Rates, and other product features, and the performance of your Contract. The duration of the COVID-19 pandemic, and the future impact that the pandemic may have on the financial markets and global economy, cannot be foreseen. You should consult with a Financial Professional about how the COVID-19 pandemic and the recent market conditions may impact your future investment decisions related to the Contract, such as purchasing the Contract or making Purchase Payments, transfers, or withdrawals, based on your individual circumstances. |
• | interest rate decreases, |
• | dividend rate increases, |
• | poor market performance, and |
• | the expected volatility of Index prices. Increases in the expected volatility of Index prices negatively affect the Index Precision Strategy and Index Performance Strategy with 1-year Terms, while decreases in the expected volatility of Index prices negatively affect the Index Guard Strategy. For the Index Performance Strategy with 3-year and 6-year Terms, and Index Protection Strategy with Cap, the impact of changes in the expected volatility of Index prices is dependent on the market environment and the applicable Caps and Participation Rates. For the Index Protection Strategy with DPSC, the impact of changes in the expected volatility of Index prices is dependent on the market environment. |
January 1, 2011 through December 31, 2020 | |||||||||
S&P 500® Index |
Nasdaq-100® Index |
Russell 2000® Index |
EURO STOXX 50® |
iShares® MSCI Emerging Markets ETF |
|||||
Returns without dividends | 12.15% | 20.28% | 10.65% | 3.22% | 2.27% | ||||
Returns with dividends | 14.45% | 21.66% | 12.17% | 7.09% | 4.38% |
• | You will no longer participate in Index performance, positive or negative, for the remainder of the Index Year for the locked Index Option. This means that under no circumstances will your Index Option Value increase during the remainder of the Index Year. |
• | You will not receive a Credit on any locked Index Option on the Term End Date. |
• | We use the Daily Adjustment calculated at the end of the current Business Day on the Lock Date to determine your locked Index Option Value. This means you will not be able to determine in advance your locked Index Option Value, and it may be higher or lower than it was at the point in time you requested a Performance Lock, or if you set a lower target your locked Index Option Value could be less than your selected target. Through your account on our website you can request a Performance Lock based on upper and/or lower targets you set using Index Option Value returns. |
• | If a Performance Lock is executed when your Daily Adjustment has declined, you will lock in any loss. It is possible that you would have realized less of a loss or no loss if the Performance Lock occurred at a later time, or if the Index Option was not locked. |
• | We will not provide advice or notify you regarding whether you should exercise a Performance Lock or the optimal time for doing so. We will not warn you if you exercise a Performance Lock at a sub-optimal time. We are not responsible for any losses related to your decision whether or not to exercise a Performance Lock. |
• | the Index is discontinued, |
• | we are unable to use the Index because, for example, changes to an Index make it impractical or expensive to purchase derivative hedging instruments to hedge the Index, or we are not licensed to use the Index, |
• | the method of calculation of the Index Values changes substantially, resulting in significantly different Index Values and performance results. This could occur, for example, if an Index altered the types of securities tracked, or the weighting of different categories of securities, or |
• | we determine in our sole discretion that the substitution is necessary. It is our policy that we will exercise this discretion only to respond as we deem necessary to unanticipated events outside of our direct control. This might include other events similar to those listed above, other changes to the Index (such as name or ownership changes) that legally may be considered a substitution or that do not align with our business strategy or values, or a breach by the Index provider of the Index intent or performance expectations. |
• | we do not change the Charge Base we use to calculate the product and rider fees, and |
• | the Buffers, Floors, DPSCs, Precision Rates, Caps, and Participation Rates for the replaced Index will apply to the new Index. We do not change the Buffers and Floors applicable to your Contract, or the current DPSCs, Precision Rates, Caps, and Participation Rates that we set on the Term Start Date. |
• | market volatility, |
• | our hedging strategies and investment performance, |
• | the availability of hedging instruments, |
• | the amount of money available to us through Contract fees and expenses to purchase hedging instruments, |
• | your Index Effective Date, |
• | the level of interest rates, |
• | utilization of Contract benefits by Owners, and |
• | our profitability goals. |
As a result of the COVID-19 pandemic, economic uncertainties have arisen which could negatively impact Allianz Life’s net income and surplus. The extent to which the COVID-19 pandemic impacts our business (including our ability to timely process applications or claims), net income, and surplus, as well as our capital and liquidity position, will depend on future developments, which are highly uncertain and cannot be estimated, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic. |
Premium Tax(1)
|
3.5% |
(as a percentage of each Purchase Payment) |
Index Protection Strategy with DPSC and Index Protection Strategy with Cap |
Index Precision Strategy and Index Performance Strategy |
Index Guard Strategy |
|||
Daily Adjustment Maximum Potential Loss |
0% | 99% | 35% | ||
(as a percentage of Index Option Value, applies for distributions from an Index Option before the Term End Date)(2) |
Contract Maintenance Charge(3)
|
$50 |
(per Contract per year) |
(1) | Not currently deducted, but we reserve the right to do so in the future. This is the maximum charge we could deduct if we exercise this right, as discussed in section 6, Expenses – Premium Tax. |
(2) | This shows the maximum potential loss due to the application of the Daily Adjustment. The Daily Adjustment could result in a loss beyond the protection of the Buffer or Floor. The Daily Adjustment applies if you take a full or partial withdrawal, or when we deduct Contract fees, expenses, or investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract before the Term End Date. The actual Daily Adjustment calculation is determined by a formula described in Appendix B. |
(3) | Waived if the Contract Value is at least $100,000, as discussed in section 6, Expenses – Contract Maintenance Charge. |
Annual Contract Fees(4) (as a percentage of the Charge Base) |
|
Product Fee
|
0.25% |
Rider Fee for the Income Benefit
|
0.70% |
Rider Fee for the optional Maximum Anniversary Value Death Benefit
|
0.20% |
Total Contract Fees for Contracts with the Income Benefit and optional Maximum Anniversary Value Death Benefit
|
1.15% |
(4) | We assess the product and rider fees during the Accumulation Phase (and Income Period, if applicable), but we do not assess the product or rider fees during the Annuity Phase. See section 6, Expenses – Annual Contract Fees: Product and Rider Fees. |
Management fees |
Rule 12b-1 fees |
Other expenses |
Acquired fund fees and expenses |
Total annual fund operating expenses before fee waivers and/or expense reimbursements |
|
BLACKROCK | |||||
AZL Government Money Market Fund | .35 | .25 | .06 | – | .66 |
0.66% total annual operating expenses for the AZL Government Money Market Fund before any fee waivers or expense reimbursements: | 1 Year | 3 Years | 5 Years | 10 Years |
• If you surrender your Contract (take a full withdrawal) at the end of each time period. | $234 | $722 | $1,238 | $2,671 |
• If you annuitize your Contract and begin Annuity Payments at the end of each time period. The earliest available Annuity Date (the date we begin making Annuity Payments) is two years after the Issue Date. | N/A | $722 | $1,238 | $2,671 |
• If you do not surrender your Contract. | $234 | $722 | $1,238 | $2,671 |
Period or Year Ended | AUV at Beginning of Period | AUV at End of Period | Number of Accumulation Units Outstanding at End of Period |
AZL Government Money Market Fund | |||
12/31/2018 | N/A | 12.893 | 375.00 |
12/31/2019 | 12.893 | 13.072 | 3867.00 |
12/31/2020 | 13.072 | 13.099 | 8622.00 |
• | The Business Day we process your request for a full withdrawal. |
• | The Business Day before the Annuity Date. |
• | Upon the death of any Owner (or the Annuitant if the Owner is a non-individual), the Business Day we first receive Valid Claim from any one Beneficiary, unless the surviving spouse/Beneficiary continues the Contract. If there are multiple Beneficiaries, the remaining Contract Value continues to fluctuate with the performance of the Index Options and the AZL Government Money Market Fund until the complete distribution of the death benefit. A Valid Claim is the documents we require to be received in Good Order at our Service Center before we pay any death claim. |
• | the total amount of investment advisory fees cannot exceed 1.5% of the Contract Value in each Contract Year. |
• | that the investment advisory fee compensate the Financial Professional only for advice they provide to you with respect to this Contract and not for any other services or accounts, |
• | this Contract be solely liable for paying these investment advisory fees directly to your Financial Professional’s firm, and |
• | while we are deducting these fees from the Contract, you agree to not pay investment advisory fees to your Financial Professional or anyone else from any other assets. |
• | are not treated as a taxable distribution, |
• | are not subject to the 10% additional federal tax if you are under age 59 1⁄2, |
• | are not subject to an MVA; |
• | are not considered to be an Income Payment, Excess Withdrawal, or RMD payment under our minimum distribution program; and |
• | do not reduce the Annual Contribution Amounts, free withdrawal privilege, total Purchase Payments reduced proportionately for withdrawals you take (including any MVA) used to determine the minimum initial Income Payment under the Level Income payment option, or your Contract's Guaranteed Death Benefit Value. |
Investment Advisory Fee Withdrawal That Is Not a Taxable Distribution |
Contract Value |
Cash Value |
Guaranteed Death Benefit Value for a Contract with the Traditional Death Benefit |
Guaranteed Death Benefit Value for a Contract with the Maximum Anniversary Value Death Benefit |
||||
Prior to 1st fee deduction | $ 100,000 | $ 97,000 | $ 90,000 | $ 105,000 | ||||
$1,500 fee deduction | – $1,500 | – $1,500 | = – $0 | = – $0 | ||||
After fee deduction | $ 99,300 | $ 96,300 | $ 90,000 | $ 105,000 | ||||
Prior to 2nd fee deduction | $ 100,500 | $ 97,100 | $ 90,000 | $ 105,000 | ||||
$1,507 fee deduction | – $1,507 | – $1,507 | = – $0 | = – $0 | ||||
After fee deduction | $ 98,993 | $ 95,593 | $ 90,000 | $ 105,000 | ||||
Prior to 3rd fee deduction | $ 97,800 | $ 95,200 | $ 90,000 | $ 105,000 | ||||
$1,467 fee deduction | – $1,467 | – $1,467 | = – $0 | = – $0 | ||||
After fee deduction | $ 96,333 | $ 93,733 | $ 90,000 | $ 105,000 |
• | $99,300 Contract Value under the Traditional Death Benefit, or the $105,000 Guaranteed Death Benefit Value under the Maximum Anniversary Value Death Benefit after the first fee. |
• | $98,993 Contract Value under the Traditional Death Benefit, or the $105,000 Guaranteed Death Benefit Value under the Maximum Anniversary Value Death Benefit after the second fee. |
• | $96,333 Contract Value under the Traditional Death Benefit, or the $105,000 Guaranteed Death Benefit Value under the Maximum Anniversary Value Death Benefit after the third fee. |
• | all applicable phases of the Contract (Accumulation Phase, Income Period and/or Annuity Phase) have ended, and/or |
• | if we received a Valid Claim, all applicable death benefit payments have been made. |
• | you remove a Joint Owner due to divorce, then we also remove that person as a Determining Life, |
• | you add or change a Joint Owner, then that person will become a Determining Life if they are the current spouse within the meaning of federal tax law of an existing Owner, or |
• | you establish a jointly owned Non-Qualified Contract and change ownership to a Trust, then we remove the prior Owner who is not the Annuitant as a Determining Life. |
• FOR JOINTLY OWNED CONTRACTS: The sole primary Beneficiary is the surviving Joint Owner regardless of any other named primary Beneficiaries. If both Joint Owners die within 120 hours of each other, we pay the death benefit to the named contingent Beneficiaries or equally to the estate of the Joint Owners if there are no named contingent Beneficiaries. |
• NAMING AN ESTATE AS A BENEFICIARY: If an estate is the Beneficiary, the estate must be the sole primary Beneficiary, unless the Spouse is the sole primary Beneficiary. If the Spouse is the sole primary Beneficiary, then an estate can be a contingent beneficiary. |
• | there is more than a 50-year age difference between spouses; |
• | you select the Traditional Death Benefit and purchase this Contract at the maximum issue age of 80 and there is more than a 20-year age difference between spouses; or |
• | you select the Maximum Anniversary Value Death Benefit and purchase this Contract at the maximum issue age of 75 and there is more than a 25-year age difference between spouses. |
• | You, the Owner, are an Eligible Person. |
• | If you and the sole primary Beneficiary are spouses within the meaning of federal tax law, the sole primary Beneficiary is also an Eligible Person. |
• | If you select single Income Payments only you, the Owner, can be the Covered Person. |
• | If you select joint Income Payments you must designate yourself, the Owner, to be a Covered Person. |
• | Both Joint Owners are Eligible Persons. |
• | If you select single Income Payments you can designate either Eligible Person to be the Covered Person. |
• | If you select joint Income Payments you must designate both Joint Owners to be the Covered Persons. |
• | The Annuitant is the Eligible Person. |
• | For Non-Qualified Contracts, we only allow one Eligible Person and joint Income Payments are not available. |
• | For Qualified Contracts, if the Owner is a qualified plan or a custodian and the Annuitant and sole contingent Beneficiary are spouses within the meaning of federal tax law, the sole contingent Beneficiary is also an Eligible Person. However, joint Income Payments are only available if the qualified plan or custodian is also the sole primary Beneficiary. This structure allows the surviving non-Annuitant spouse to continue to receive Income Payments, assuming the surviving non-Annuitant spouse is the beneficiary under the qualified plan or custodial IRA. |
• | If you select single Income Payments only the Annuitant can be the Covered Person. |
• An assignment may be a taxable event. In addition, there are other restrictions on changing the ownership of a Qualified Contract and Qualified Contracts generally cannot be assigned absolutely or on a limited basis. You should consult with your tax adviser before assigning this Contract. |
• An assignment will only change the Determining Life (Lives) if it involves removing a Joint Owner due to divorce, replacing Joint Owners with a Trust, or adding a Joint Owner if that person is a spouse within the meaning of federal tax law of the existing Owner. |
• | age 80 or younger, or |
• | age 75 or younger if you select the Maximum Anniversary Value Death Benefit. |
• | The minimum initial Purchase Payment due on the Issue Date is $5,000. |
• | We restrict additional Purchase Payments. Each Index Year during the Accumulation Phase and before the Income Benefit Date you cannot add more than your initial amount without our prior approval. Your initial amount is all Purchase Payments received before the first Quarterly Contract Anniversary of the first Contract Year. We allow you to add up to the initial amount in the remainder of the first Index Year. The minimum additional Purchase Payment we will accept is $50. |
• | We do not accept additional Purchase Payments on or after the Income Benefit Date, or on or after the Annuity Date. |
• | The maximum total Purchase Payments we accept without our prior approval is $3 million. |
On your application if you select… | Your Index Effective Date will be either… |
the earliest Index Effective Date | • your Issue Date, or • the first Business Day of the next month if the Issue Date is the 29th, 30th, or 31st of a month |
the deferred Index Effective Date | • your first Quarterly Contract Anniversary, or • the next Business Day if the first Quarterly Contract Anniversary occurs on a non-Business Day, or the first Business Day of the next month if the first Quarterly Contract Anniversary is the 29th, 30th, or 31st of a month |
• In order to apply Purchase Payments we receive after the Index Effective Date to your selected Index Option(s) on the next Index Anniversary, we must receive them before the end of the Business Day on the Index Anniversary (or before the end of the prior Business Day if the anniversary is a non-Business Day). |
• Purchase Payments we hold in the AZL Government Money Market before transferring them to your selected Index Options are subject to Contract fees and expenses (e.g. product fee), and market risk and may lose value. |
• | cancel your Contract during this time, we return the greater of Purchase Payments less withdrawals and less any investment advisory fees deducted from your Contract if you authorize your Financial Professional’s firm to receive these fees, or Contract Value. We do not apply an MVA or deduct any other Contract fees or expenses if you cancel your Contract during the free look period. |
• | do not cancel your Contract during this time, we re-allocate your Contract Value to the Index Options according to your Purchase Payment default instructions on the Index Effective Date. |
Investment Management Company and Adviser/Subadviser |
Investment Option Name |
Asset Class | Investment Objective |
Principal Investment Strategies (Normal market conditions) |
Blackrock | ||||
Allianz Investment Management LLC/BlackRock Advisors, LLC | AZL Government Money Market Fund | Cash Equivalent | Current income consistent with stability of principal | Invests at least 99.5% of its total assets in cash, government securities, or repurchase agreements that are collateralized fully. Invests at least 80% in government securities or in repurchase agreements collateralized by government securities. Investments include U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations. In addition, the Fund may invest in variable and floating rate instruments. During extended periods of low interest rates, and due in part to contract fees and expenses, the yield of the AZL Government Money Market Fund may also become extremely low and possibly negative. |
Currently the Contract does not offer any variable investment options to which you can allocate money. If we were to offer variable investment options in the future they would be subject to the following provisions. |
• | Dilution of the interests of long-term investors in a variable investment option, if market timers or others transfer into a variable investment option at prices that are below their true value, or transfer out at prices above their true value. |
• | An adverse effect on portfolio management, such as causing a variable investment option to maintain a higher level of cash or causing a variable investment option to liquidate investments prematurely. |
• | Increased brokerage and administrative expenses. |
• | Limit transfer frequency (for example, prohibit more than one transfer a week, or more than two a month, etc.). |
• | Restrict the transfer method (for example, requiring all transfers be sent by first-class U.S. mail and rescinding electronic transfer privileges). |
• | Require a minimum time period between each transfer into or out of the same variable investment option. Our current Excessive Trading and Market Timing policy, which is subject to change without notice, prohibits “round trips” within 14 calendar days. We do not include transfers into and/or out of the AZL Government Money Market Fund when available in your Contract or any automatic transfers made under any of our programs or Contract features. Round trips are transfers into and back out of the same variable investment option, or transfers out of and back into the same variable investment option. |
• | Refuse transfer requests made on your behalf by an asset allocation and/or market timing service. |
• | Limit the dollar amount of any single Purchase Payment or transfer request to a variable investment option. |
• | Prohibit transfers into specific variable investment options. |
• | Impose other limitations or restrictions to the extent permitted by federal securities laws. |
• | Our monitoring will be 100% successful in detecting all potentially disruptive trading activity. |
• | Revoking electronic transfer privileges will successfully deter all potentially disruptive trading. |
This Contract is not designed for professional market timing organizations, or other persons using programmed, large, or frequent transfers, and we may restrict excessive or inappropriate transfer activity. |
• | You can provide voting instructions based on the dollar value of the AZL Government Money Market Fund’s shares in your Contract’s subaccount. We calculate this value based on the number and value of accumulation units for your Contract on the record date. We count fractional units. |
• | You receive proxy materials and a voting instruction form. |
Variable Account Value increases when…. | Variable Account Value decreases when…. |
• we hold Purchase Payments in the AZL Government Money Market Fund before transferring them to your selected
Index Options, or • there is positive AZL Government Money Market Fund performance |
• we take assets out of the AZL Government Money Market Fund and transfer them to your selected Index Options, • there is negative AZL Government Money Market Fund performance, or • we deduct Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract |
Contract fees and expenses we deduct from the AZL Government Money Market Fund include the product fee, rider fee, and contract maintenance charge as described in section 6, Expenses. |
Index Option Values increase when…. | Index Option Values decrease when…. |
• you add assets to an Index Option by Purchase Payment or Contract Value transfer, or • you receive a positive Credit or Daily Adjustment |
• you take assets out of an Index Option by withdrawal (including any MVA) or Contract Value transfer, • you receive a negative Credit or Daily Adjustment, or • we deduct Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract |
Contract fees and expenses we deduct from the Index Options include the product fee, rider fee, and contract maintenance charge as described in section 6, Expenses. |
• | increase when we add Purchase Payments to the AZL Government Money Market Fund, and |
• | decrease when assets are removed from the AZL Government Money Market Fund by transfer, withdrawals you request, or when we deduct Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. |
• | We receive at our Service Center an additional Purchase Payment of $3,000 from you before the end of the Business Day. |
• | When the New York Stock Exchange closes on that Business Day, we determine that the accumulation unit value is $13.25 for the subaccount of the AZL Government Money Market Fund. |
• | We then divide $3,000 by $13.25 and credit your Contract that night with 226.415094 subaccount accumulation units for the AZL Government Money Market Fund. |
• | any Purchase Payment received that day which you allocated to that Index Option, and |
• | any Contract Value transferred into that Index Option. |
• | the Daily Adjustment if this is not the Term End Date, or |
• | a Credit if this is the Term End Date. |
• | We multiply each Index Option Base by its Credit and add this amount to its Index Option Base. |
• | Then we set each Index Option Value equal to its Index Option Base. |
• | Additional Purchase Payments received on the Term End Date and allocated to this Index Option, and transfers of Variable Account Value or Index Option Value into this Index Option, increase these values by the dollar amount allocated or transferred. |
• | Transfers out of this Index Option reduce these values by the dollar amount removed from the Index Option. |
• | Partial withdrawals you take (including any MVA), and deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract reduce these values by the dollar amount withdrawn from the Index Option. |
– | We deduct partial withdrawals you take, and deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract from the Index Options proportionately based on the percentage of Contract Value in each Index Option using values determined at the end of the Business Day before we process the withdrawal or deduct the Contract expense. |
– | We then reduce each Index Option Base by the same percentage that the amount withdrawn reduced its associated Index Option Value. |
• | Your Contract Value is $100,000 and you selected two Index Options. The first Index Option has an Index Option Value of $75,000 and an Index Option Base of $72,000. The second Index Option has an Index Option Value of $25,000 and an Index Option Base of $22,000. You take a $10,000 partial withdrawal (including any MVA). |
• | Your partial withdrawal reduces your Index Option Value by the percentage of Contract Value in each Index Option (Index Option Value ÷ Contract Value). |
– | For the first Index Option this percentage is 75% ($75,000 ÷ $100,000) and the $10,000 partial withdrawal reduces this value by $7,500 ($10,000 x 75%). For the second Index Option this percentage is 25% ($25,000 ÷ $100,000) and the $10,000 partial withdrawal reduces this value by $2,500 ($10,000 x 25%). |
• | We then reduce each Index Option Base by the same percentage that the amount withdrawn reduced its associated Index Option Value (amount withdrawn from Index Option Value ÷ Index Option Value). |
– | For the first Index Option this percentage is 10% ($7,500 ÷ $75,000) and the $10,000 partial withdrawal reduces this value by $7,200 ($72,000 x 10%). For the second Index Option this percentage is also 10% ($2,500 ÷ $25,000) and the $10,000 partial withdrawal reduces this value by $2,200 ($22,000 x 10%). |
• | Deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract also reduce these values proportionately in the same way as a partial withdrawal. |
First Index Option | Second Index Option | ||||||
Index Option Value | Index Option Base | Index Option Value | Index Option Base | ||||
Prior to partial withdrawal | $ 75,000 | $ 72,000 | $ 25,000 | $ 22,000 | |||
$10,000 partial withdrawal | – $7,500 | – $7,200 | – $2,500 | – $2,200 | |||
After partial withdrawal | $ 67,500 | $ 64,800 | $ 22,500 | $ 19,800 |
• Amounts removed from the Index Options during the Term for partial withdrawals you take and deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract do not receive a Credit on the Term End Date. However, the remaining amount in the Index Options is eligible for a Credit on the Term End Date. |
• You cannot specify from which Index Option or the AZL Government Money Market Fund (if applicable) we deduct Contract expenses; we deduct Contract expenses from each Index Option and the AZL Government Money Market Fund proportionately based on its percentage of Contract Value. However, you can specify from which Index Option or the AZL Government Money Market Fund (if applicable) we deduct a partial withdrawal. There is no consistent financial advantage to providing partial withdrawal deduction instructions. |
Crediting Method | If Index Value is less than it was on the Term Start Date (i.e., Index Return is negative): |
If Index Value is equal to or greater than it was on the Term Start Date (i.e., Index Return is zero or positive): |
Index Protection Strategy with DPSC | Credit is zero | Credit is equal to the DPSC set on the Term Start Date |
Crediting Method | If Index Value is less than it was on the Term Start Date (i.e., Index Return is negative): |
If Index Value is equal to or greater than it was on the Term Start Date (i.e., Index Return is zero or positive): |
Index Protection Strategy with Cap | Credit is zero | Protection Credit is equal to the Index Return up to the Cap set on the Term Start DateAssume the Cap is 5%. If the Index Return is… • 0%, the Protection Credit is zero. • 4%, the Performance Credit is 4%. • 12%, the Performance Credit is 5%. |
Index Precision Strategy | Performance Credit is equal to the negative Index Return in excess of the BufferAssume the Buffer is 10%. If the Index
Return is… • -8%, the Performance Credit is zero. • -12%, the Performance Credit is -2%. |
Performance Credit is equal to the Precision Rate set on the Term Start Date |
Index Guard Strategy | Performance Credit is equal to the negative Index Return subject to the FloorAssume the Floor is -10%. If the Index Return
is… • -8%, the Performance Credit is -8%. • -12%, the Performance Credit is -10%. |
Performance Credit is equal to the Index Return up to the Cap set on the Term Start DateAssume the Cap is 8%. If the Index Return is… • 0%, the Performance Credit is zero. • 6%, the Performance Credit is 6%. • 12%, the Performance Credit is 8%. |
Index Performance Strategy – 1-year Term | Performance Credit is equal to the negative Index Return in excess of the Buffer. Assume the Buffer for the 1-year Term is 10%. If the Index Return for the year is…• -8%, the Performance Credit is zero. • -12%, the Performance Credit is -2%. |
Performance Credit is equal to the Index Return up to the Cap set on the Term Start Date Assume the Cap for the 1-year Term is 8%. If the Index Return for the year is…• 0%, the Performance Credit is zero. • 6%, the Performance Credit is 6%. • 12%, the Performance Credit is 8%. |
Index Performance Strategy – 3-year Term | Performance Credit is equal to the negative Index Return in excess of the Buffer. Assume the Buffer for the 3-year Term is 10%. If the Index Return for the Term is…• -19%, the Performance Credit is -9%. • -24%, the Performance Credit is -14%. |
Performance Credit is equal to the Index Return multiplied by the Participation Rate, up to any Cap set on the Term Start
Date Assume the Participation Rate is 100% and the Cap is 80%. If the Index Return for the Term is…• 0%, the Performance Credit is zero. • 65%, the Performance Credit is 65%. • 90%, the Performance Credit is 80%. If instead, the Participation Rate is 110% and the 3-year Term were uncapped, then if the Index Return for the Term is…• 0%, the Performance Credit is zero. • 65%, the Performance Credit is 71.5%. • 90%, the Performance Credit is 99%. |
Crediting Method | If Index Value is less than it was on the Term Start Date (i.e., Index Return is negative): |
If Index Value is equal to or greater than it was on the Term Start Date (i.e., Index Return is zero or positive): |
Index Performance Strategy – 6-year Term | Performance Credit is equal to the negative Index Return in excess of the Buffer. Assume the Buffer for the 6-year Term is 10%. If the Index Return for the Term is…• -19%, the Performance Credit is -9%. • -24%, the Performance Credit is -14%. |
Performance Credit is equal to the Index Return multiplied by the Participation Rate, up to any Cap set on the Term Start
Date Assume the Participation Rate is 100% and the Cap is 95%. If the Index Return for the Term is…• 0%, the Performance Credit is zero. • 65%, the Performance Credit is 65%. • 90%, the Performance Credit is 90%. If instead, the Participation Rate is 110% and the 6-year Term were uncapped, then if the Index Return for the Term is…• 0%, the Performance Credit is zero. • 65%, the Performance Credit is 71.5%. • 90%, the Performance Credit is 99%. |
In general, if corporate bond yields at the time of the withdrawal are… |
then the MVA will be… |
Less than they were when the Annual Contribution Amount was established |
Positive |
Equal to what they were when the Annual Contribution Amount was established |
Zero |
Greater than what they were when the Annual Contribution Amount was established |
Negative |
• | A is one plus the initial yield on the Bloomberg Barclays US Long Corporate Bond Index on the Index Effective Date or Index Anniversary that we established the Annual Contribution Amount. |
• | B is one plus the yield on the Bloomberg Barclays US Long Corporate Bond Index at the end of the last Business Day prior to the date we apply the MVA. |
• | t is the number of days from the date we apply the MVA to the next Index Anniversary, divided by 365, plus the number of whole Index Years remaining in the Annual Contribution Amount’s MVA period. |
Calculating an MVA on a partial withdrawal | Example | |
For purposes of calculating an MVA on a partial withdrawal, we withdraw Purchase Payments on a “first-in-first-out” (FIFO) basis as indicated below. | You make an initial Purchase Payment on a Non-Qualified Contract of $55,000 on the Index Effective Date (your 1st Annual Contribution Amount), and make another Purchase Payment on the first Index Anniversary of $45,000 (your 2nd Annual Contribution Amount), for a total Annual Contribution Amount of $100,000. The yield on the Bloomberg Barclays US Long Corporate
Bond Index on the Index Effective Date is 2.00%, and is 3.00% on the first Index Anniversary (these are “A” in the MVA factor formula). On the third Index Anniversary, your Contract Value is $110,000, the yield on the Bloomberg Barclays US Long Corporate Bond Index is 2.50% (this is “B” in the MVA factor formula), Income Payment have not yet begun, and you request a $70,000 withdrawal. The time remaining in each Annual Contribution Amount is 4 years for the 1st amount, and 5 years for the 2nd amount (“t” in our MVA factor formula). We withdraw money and compute the MVA as follows. |
|
1. First we withdraw from any Variable Account Value in the AZL Government Money Market Fund. This withdrawal is not subject to an MVA, but it does reduce the Purchase Payments we apply to the next Annual Contribution Amount dollar for dollar. | 1. Variable Account Value in the AZL Government Money Market Fund. You made no Purchase Payments during the third Index Year, so there is no Variable Account Value in the fund and this does not apply. | |
2. Next we withdraw from any Annual Contribution Amounts that are beyond the seven Index Year MVA period. This withdrawal is not subject to an MVA and it reduces your Annual Contribution Amounts dollar for dollar. | 2. Annual Contribution Amounts beyond the MVA period. Both Annual Contribution Amounts are still within the MVA period, so this does not apply. | |
3. Amounts available as an MVA-Free Withdrawal. This includes partial withdrawals you take during the Accumulation Phase and before the Income Period under the free withdrawal privilege, Income Payments, and RMD payments under our minimum distribution program. MVA-Free Withdrawals are not subject to an MVA and do not reduce your Annual Contribution Amounts. | 3. Amounts available as an MVA-Free Withdrawal. You did not take any other withdrawals this Index Year, so the entire free withdrawal privilege (10% of your total Annual Contribution Amounts, or $10,000) is available to you without incurring an MVA. This withdrawal will not reduce your Annual Contribution Amounts. |
Calculating an MVA on a partial withdrawal | Example | |
4. Next, on a FIFO basis, we withdraw from any Annual Contribution Amounts within your Contract’s seven Index Year MVA period and assess an MVA. The MVA for an Annual Contribution Amount is equal to the amount of Purchase Payment withdrawn from that Annual Contribution Amount multiplied by the MVA factor. We determine your total MVA by multiplying each Annual Contribution Amount by its applicable MVA and then totaling the MVAs. These withdrawals reduce your Annual Contribution Amounts. | 4. Annual Contribution Amounts within the MVA period on a FIFO basis. The total amount we withdraw
from the 1st Annual Contribution Amount is $55,000, which is subject to a -$1,065.34 MVA, and you receive $53,934.66. We determine this
amount as follows: The MVA factor is [(A ÷ B)t -1] = [(1 + 2%) ÷ (2% + 2.50%)]4 – 1] = -1.94%. (amount withdrawn) x (1 + MVA factor) = the amount you receive, or: $55,000 x 0.9806) = $53,934.66 Next we withdraw from the 2nd Annual Contribution Amount. So far, you received $64,934.66 ($10,000 under the free withdrawal privilege, and $53,934.66 from the 1st Annual Contribution Amount which is now reduced to $0), so you must receive an additional $6,065.34 to equal the $70,000 you requested. We determine the amount we must withdraw from the 2nd Annual Contribution Amount as follows: The MVA factor is [(A ÷ B)t -1] = [(1 + 3%) ÷ (1 + 2.50%)]5 – 1 = 2.46%. We calculate the amount withdrawn and its partial MVA as follows: (the amount you receive) ÷ (1 + MVA factor) = amount withdrawn, or: $6,065.34 ÷ (1 + 2.46%) = $5,919.55 Because the MVA is positive we withdraw $5,919.55 from the 2nd Annual Contribution Amount to get you $6,065.34. |
|
5. Finally, we withdraw from any Contract earnings. This withdrawal is not subject to an MVA and does not reduce your Annual Contribution Amounts. | 5. Contract earnings. We already withdrew your requested amount, so this does not apply. In total we withdrew $70,919.55 from your Contract, of which you received $70,000 due to the partial MVA of -$919.55 (which is less than the 10% limit on the amount withdrawn). We also reduced the 1st Annual Contribution Amount from $55,000 to $0, and your 2nd Annual Contribution Amount from $45,000 to $39,080.45 ($45,000 - $5,919.55). |
• Upon a full withdrawal the free withdrawal privilege is not available to you, and we apply an MVA against Annual Contribution Amounts that are still within their MVA period. On a full withdrawal your total Annual Contribution Amounts may be greater than your Contract Value because the following reduce your Contract Value, but do not reduce your Annual Contribution Amounts: |
– prior MVA-Free Withdrawals, |
– deductions we make for Contract fees, expenses, or investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract, and/or |
– poor performance. |
• Withdrawals may also be subject to ordinary income taxes, and a 10% additional federal tax if you are under age 59 1⁄2, and the amount of Contract Value available for withdrawal may be affected by the Daily Adjustment (which can be negative). |
• For tax purposes in most instances, withdrawals from Non-Qualified Contracts are considered to come from earnings first, not Purchase Payments. |
Annual Contract Fees (as a percentage of the Charge Base) |
|
Product Fee(1)
|
0.25% |
Rider Fee for the Income Benefit
|
0.70% |
Rider Fee for the optional Maximum Anniversary Value Death Benefit(2)
|
0.20% |
Total Contract Fees for Contracts with the Income Benefit and optional Maximum Anniversary Value Death Benefit
|
1.15% |
(1) | Upon the death of the Owner, we continue to assess this product fee under death benefit payment Option B, and with optional payments under death benefit payment Option C, as noted in section 10, Death Benefit. |
(2) | We no longer assess the 0.20% rider fee for the Maximum Anniversary Value Death Benefit once we receive either the first Valid Claim from any one Beneficiary, or due proof of a Determining Life’s death if you and the Determining Life are different individuals and the Determining Life predeceases you. |
Issue Date | Non-Quarterly Contract Anniversaries | Quarterly Contract Anniversaries* |
• The Charge Base is equal to your initial Purchase Payment.• We begin calculating and accruing the daily product fee, and rider fee if applicable, on the day after the Issue Date. | • First we calculate and accrue the daily product and rider fees, using the Charge Base. If this is a non-Business Day we use the Charge Base
from the end of the prior Business Day.• Then if this is a Business Day we increase/decrease the Charge Base as follows. – If we receive an additional Purchase Payment, we increase the Charge Base by the dollar amount we receive. – If you take a partial withdrawal, or we deduct Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract, we decrease the Charge Base by the percentage of Contract Value withdrawn (including any MVA). All withdrawals you take reduce the Charge Base, even MVA-Free Withdrawals. |
• First we process all daily transactions and determine your Contract Value. Daily transactions include any gains/losses due to AZL Government
Money Market Fund performance or application of any Daily Adjustment (or Credit if this is also the Term End Date), any additional Purchase Payment, any partial withdrawals you take (including any MVA), and deductions we make for
Contract fees and expenses (including deduction of the accrued daily product and rider fees for the prior quarter) and any investment advisory fees that you authorize your
Financial Professional’s firm to receive from the Contract. All partial withdrawals you take reduce the Charge Base, even MVA-Free Withdrawals. – We deduct the accrued product and rider fees for the prior quarter on a dollar for dollar basis from the Contract Value, and proportionately from each Index Option and the AZL Government Money Market Fund.• Then we set the Charge Base equal to this Contract Value and we calculate and accrue the next quarter’s daily product and rider fees using the newly set Charge Base.* Or the next Business Day if the Quarterly Contract Anniversary is a non-Business Day. |
Example: Contract Value is $125,000; Charge Base is $127,000; a $10,000 partial withdrawal
(including any MVA) would decrease the Charge Base by $10,160. [($10,000 ÷ $125,000) x $127,000] Any increase/decrease to the Charge Base will increase/decrease the daily product and rider fees we calculate and accrue on the next day. |
||
Examples of how we calculate the product and rider fees are included in Appendix C. |
We do not treat the deduction of the accrued product and rider fees as a withdrawal when computing your Guaranteed Death Benefit Value (see section 10). However, if you select the Maximum Anniversary Value Death Benefit we deduct all Contract fees and expenses on the Index Anniversary (including the accrued product and rider fees if this is also a Quarterly Contract Anniversary) before we capture any annual investment gains in the Maximum Anniversary Value. |
• | If you take a full withdrawal we deduct the final accrued product and rider fees before processing the withdrawal. |
• | If you annuitize the Contract, we deduct the final accrued product and rider fees before calculating Annuity Payments. |
• | Upon the death of an Owner (or Annuitant if the Owner is a non-individual), we deduct the final accrued rider fee for the Maximum Anniversary Value Death Benefit before calculating the death benefit, and we deduct the final accrued product fee before calculating the death benefit if death benefit payment Option A or Annuity Payments under death benefit payment Option C is selected. If the Income Benefit ends due to death, we also deduct its final rider fee before calculating the death benefit. For more information on the death benefit payment options see section 10, Death Benefit. |
If on a Quarterly Contract Anniversary (or the next Business Day if the Quarterly Contract Anniversary is a non-Business Day) the Contract Value is less than the accrued product and rider fees, we deduct your total remaining Contract Value to cover the accrued product and rider fees and reduce your Contract Value to zero. If the deduction of the accrued product and rider fees reduces your Contract Value to zero and the Income Benefit and your selected death benefit have ended, we treat this as a full withdrawal and your Contract ends. |
• | During the Accumulation Phase (and Income Period, if applicable), if the Contract Value is at least $100,000 on the Contract Anniversary. |
• | During the Annuity Phase if the Contract Value on the last Business Day before the Annuity Date is at least $100,000. |
• | When paying death benefits. |
• | on a dollar for dollar basis from the Contract Value on the Contract Anniversary (or the next Business Day if the Contract Anniversary is a non-Business Day), and |
• | we deduct it proportionately from each Index Option and the AZL Government Money Market Fund. |
• | by taking a withdrawal (including withdrawals under the free withdrawal privilege; Income Payments and Excess Withdrawals; and for Qualified Contracts only, RMD payments under our minimum distribution program); |
• | by taking Annuity Payments; or |
• | when we pay a death benefit. |
* | Does not apply to RMD payments under our required minimum distribution program. |
** | Does not apply to Income Payments or RMD payments under our required minimum distributions program. |
• | total Contract Value, |
• | less any final product and rider fees, and contract maintenance charge, and |
• | increased or decreased for any MVA. |
• Withdrawals may be subject to an MVA, state and federal taxation, and a 10% additional federal tax if you are under age 59 1⁄2, and the amount of Contract Value available for withdrawal may be affected by the Daily Adjustment (which can be negative). |
• Joint Owners: We send each Joint Owner a check for half of the withdrawal amount and tax that Joint Owner individually. This can create a discrepancy in taxation if only one Joint Owner is under age 59 1⁄2 because that Joint Owner will be subject to the 10% additional federal tax. |
• We may be required to provide information about you or your Contract to government regulators. We may also be required to stop Contract disbursements and thereby refuse any transfer requests, and refuse to pay any withdrawals (including a full withdrawal), or death benefits until we receive instructions from the appropriate regulator. If, pursuant to SEC rules, the AZL Government Money Market Fund suspends payment of redemption proceeds in connection with a fund liquidation, we will delay payment of any transfer, full or partial withdrawal, or death benefit from the AZL Government Money Market Fund subaccount until the fund is liquidated. |
The free withdrawal privilege is not available upon a full withdrawal or during the Income Period. |
You should consult a tax adviser before purchasing a Qualified Contract that is subject to RMD payments. |
• | the New York Stock Exchange is closed (other than customary weekend and holiday closings); |
• | trading on the New York Stock Exchange is restricted; |
• | an emergency (as determined by the SEC) exists as a result of which disposal of the AZL Government Money Market Fund shares is not reasonably practicable or we cannot reasonably value the shares; or |
• | during any other period when the SEC, by order, so permits for the protection of Owners. |
* | Including Income Payments and Excess Withdrawals. |
• | The Contract Value less the final product and rider fees, or Cash Value on the Annuity Date. |
• | The age of the Annuitant and any joint Annuitant on the Annuity Date. |
• | The gender of the Annuitant and any joint Annuitant where permitted. |
• | The Annuity Option you select. |
• | Your Contract’s interest rate (or current rates, if higher) and mortality table. |
If you do not choose an Annuity Option before the Annuity Date, we make Annuity Payments to the Payee under Annuity Option C with ten years of guaranteed monthly payments. |
• If Annuity Payments would be less than $100, we reserve the right to require you to take a full withdrawal and your Contract will then terminate. |
• If on the maximum Annuity Date your Contract Value is greater than zero, you must annuitize the Contract. We notify you of your available options in writing 60 days in advance. If on your maximum Annuity Date you have not selected an Annuity Option, we make payments under Annuity Option C with ten years of guaranteed monthly payments. Upon annuitization you no longer have Contract Value or a death benefit, and you cannot receive any other periodic withdrawals or payments other than Annuity Payments. |
• For Contracts in the Income Period: We will convert your Income Payments to Annuity Payments if your Contract Value is greater than zero and you take Annuity Payments under Annuity Option B or F as follows. |
For single Income Payments, if you choose Annuity Option B (Life) the sole Covered Person becomes the sole Annuitant and your Annuity Payments are equal to the greater of: |
– annual Annuity Payments under Annuity Option B based on the greater of Contract Value or Cash Value; or |
– the current annual maximum Income Payment available to you. |
For joint Income Payments, if you choose Annuity Option F (Joint and Survivor) the joint Covered Persons become the joint Annuitants and your Annuity Payments are equal to the greater of: |
– annual Annuity Payments under Annuity Option F based on the greater of Contract Value or Cash Value; or |
– the current annual maximum Income Payment available to you. |
If you select Annuity Option A, C, or G, we do not convert your Income Payments to Annuity Payments. This means you may receive less as Annuity Payments than you would have received as Income Payments. You should consult with your Financial Professional before requesting Annuity Payments. On request we provide illustrations showing you the amount of Annuity Payments you could receive. |
If we convert your Income Payments to Annuity Payments: |
– On the Annuity Date we establish a “remaining value” equal to your Contract Value. Each Annuity Payment reduces the remaining value by the dollar amount paid. Upon the death of the last surviving Annuitant, we will pay any remaining value to the named Beneficiary(s). |
– If you selected the Increasing Income payment option, your Annuity Payments will increase on each Index Anniversary if your selected Index Options receive a DPSC or Protection Credit, or by the Daily Adjustment if you exercise a Performance Lock, as described in section 9. |
– If you have a Non-Qualified Contract, these Annuity Payments will receive the benefit of the exclusion ratio, which causes a portion of each Annuity Payment to be non-taxable as described in section 11, Taxes – Taxation of Annuity Contracts. |
• | the Index Anniversary that Income Payments can begin once the Eligible Person(s) reaches age 50, |
• | the last Index Anniversary that joint Income Payments will be available because the older Eligible Person is reaching age 100 if there are two Eligible Persons, and |
• | the last Index Anniversary that Income Payments will be available because the younger Eligible Person is reaching age 100. |
• If Income Payments do not begin by the Index Anniversary upon which the younger Eligible Person reaches age 100, the Income Benefit ends. |
• If the Income Benefit ends before Income Payments begin, you will have paid for the benefit without receiving any of its advantages. |
• | The Level Income Guarantee Payment Percentage based on the Covered Person’s current age (or the younger Covered Person’s current age for joint payments) multiplied by total Purchase Payments reduced for withdrawals you took. Withdrawals reduce total Purchase Payments by the percentage of Contract Value withdrawn (including any MVA), determined at the end of each Business Day. All withdrawals you take reduce your total Purchase Payments, even MVA-Free Withdrawals. However, we do not reduce your total Purchase Payments for deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. |
• | The Lifetime Income Percentage for the payment type you select multiplied by the Contract Value determined at the end of the Business Day after we deduct the product fee, rider fee, and contract maintenance charge and apply any Credits, but before we make any Income Payments or Excess Withdrawals, or we deduct any investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract. |
• If you have Contract Value in a 3-year or 6-year Term Index Option and the Income Benefit Date is not a Term End Date, we will execute a Performance Lock for that Index Option if it is not locked and then immediately calculate and begin your Income Payments. This means you may not receive the full benefit of the Credit that you would have received if you had waited until the Term End Date to begin Income Payments. |
• We use Contract Value to calculate your initial annual maximum Income Payment, and Income Payment increases under the Level Income payment option. Negative Index Option performance, withdrawals you take, and deductions we make for Contract fees, expenses, and investment advisory fees that you authorize your Financial Professional’s firm to receive from the Contract decrease the Contract Value, which reduces the initial annual maximum Income Payment available to you, and the likelihood you will receive Income Payment increases if you select the Level Income payment option. |
Covered Person’s age (or younger Covered Person’s age for joint payments) on the Income Benefit Date |
Level Income Guarantee Payment Percentage |
50 | 2.23% |
51 | 2.28% |
52 | 2.33% |
53 | 2.39% |
54 | 2.44% |
55 | 2.50% |
56 | 2.57% |
57 | 2.64% |
58 | 2.71% |
59 | 2.78% |
60 | 2.86% |
61 | 2.95% |
62 | 3.04% |
63 | 3.13% |
64 | 3.23% |
65 | 3.34% |
66 | 3.45% |
67 | 3.58% |
68 | 3.71% |
69 | 3.85% |
70 | 4.00% |
71 | 4.17% |
72 | 4.35% |
73 | 4.55% |
74 | 4.77% |
75 | 5.00% |
76 | 5.27% |
77 | 5.56% |
78 | 5.89% |
79 | 6.25% |
80 | 6.67% |
• For Qualified Contracts: If we calculate a required minimum distribution (RMD) based on this Contract, after making all Income Payments for the calendar year we determine whether this calendar year’s total RMD has been satisfied by these payments and any Excess Withdrawals. If the RMD amount for this Contract has not been satisfied, we send you this remaining amount as one RMD payment by the end of the calendar year. We consider this payment to be a withdrawal, but it is not an Excess Withdrawal and it is not subject to an MVA. |
• For annuitization: If on the Annuity Date you are receiving Income Payments and your Contract Value is positive, we will convert your Income Payments to Annuity Payments if you take Annuity Payments under Annuity Option B or F. If you select any other Annuity Option, we will not convert your Income Payments to Annuity Payments. This means that if you annuitize your Contract you may receive less as Annuity Payments than you would have received as Income Payments. For more information, see section 8, The Annuity Phase – When Annuity Payments Begin. |
• | you are age 58 and the Income Percentages are 4.60% for Level Income, and 3.60% for Increasing Income, |
• | the Variable Account Value for the additional Purchase Payment is now $2,002.50, and |
• | the Contract Value after application of the additional Purchase Payment, Credits and before deducting all Contract fees and expenses is $25,000. |
• | Lifetime Income Percentages for the initial Purchase Payment are now 5.20% (4.20% + (0.25% x 4)) for Level Income and 4.20% (3.20% + (0.25% x 4)) for Increasing Income. |
• | Lifetime Income Percentages for the additional Purchase Payment are 4.60% for Level Income and 3.60% for Increasing Income. |
• | The Variable Account Value’s percentage of total Contract Value is 8.01% ($2,002.50 ÷ $25,000), which means the initial Purchase Payment is 91.99% of total Contract Value (100% - 8.01%). |
– | for Level Income: (5.20% x 91.99%) + (4.60% x 8.01%) = 4.78% + 0.37% = 5.15% |
– | for Increasing Income: (4.20% x 91.99%) + (3.60% x 8.01%) = 3.86% + 0.29% = 4.15% |
If you select Level Income, you receive the greater of…. | If you select Increasing Income, you receive… |
• Level Income Guarantee Payment Percentage multiplied by total Purchase Payments reduced
proportionately for withdrawals you took, or: (2.71% x $22,000) = $596.20 • Lifetime Income Percentage multiplied by the Contract Value, or: (5.15% x $25,000) = $1,287.50 |
• Lifetime Income Percentage multiplied by the Contract Value, or: (4.15% x $25,000) = $1,037.50 |
If you select Level Income, you receive the greater of…. | If you select Increasing Income, you receive… |
• Level Income Guarantee Payment Percentage multiplied by total Purchase Payments reduced
proportionately for withdrawals you took, or: (2.71% x $20,000) = $542.00 • Lifetime Income Percentage multiplied by the Contract Value, or: (5.20% x $22,997.50) = $1,195.87 |
• Lifetime Income Percentage multiplied by the Contract Value, or: (4.20% x $22,997.50) = $965.90 |
When it increases the initial Income Payment | When it does not increase the initial Income Payment |
• Assume your Contract Value decreases to $50,000 due to negative performance. You would
receive the greater of: – Level Income Guarantee Payment Percentage multiplied by total Purchase Payments reduced proportionately for withdrawals you took, or: (4.00% x $100,000) = $4,000.00 – Lifetime Income Percentage multiplied by the Contract Value, or: (7.70% x $50,000) = $3,850 |
• Assume your Contract Value decreases to $70,000 due to negative performance. You would receive the greater
of: – Level Income Guarantee Payment Percentage multiplied by total Purchase Payments reduced proportionately for withdrawals you took, or: (4.00% x $100,000) = $4,000.00 – Lifetime Income Percentage multiplied by the Contract Value, or: (7.70% x $70,000) = $5,390 |
Excess Withdrawal |
Contract Value |
Cash Value |
Guaranteed Death Benefit Value for a Contract with the Traditional Death Benefit |
Guaranteed Death Benefit Value for a Contract with the Maximum Anniversary Value Death Benefit |
Next anniversary’s annual maximum Income Payment |
|||||
Prior to withdrawal | $ 100,000 | $ 97,000 | $ 90,000 | $ 105,000 | $ 4,800 | |||||
$1,500 withdrawal | – $1,500 | – $1,500 | – [($1,500 ÷ 100,000) | – [($1,500 ÷ 100,000) | – [($1,500 ÷ 100,000) | |||||
x 90,000)] = $1,350 | x 105,000)] = $1,575 | x 4,800)] = $72 | ||||||||
-$100 MVA | – $100 | – [($100 ÷ 100,000) | – [($100 ÷ 100,000) | – [($100 ÷ 100,000) | ||||||
x 90,000)] = $90 | x 105,000)] = $105 | x 4,800)] = $5 | ||||||||
– $1,600 | – $1,500 | = – $1,440 | = – $1,680 | = – $77 |
Excess Withdrawal |
Contract Value |
Cash Value |
Guaranteed Death Benefit Value for a Contract with the Traditional Death Benefit |
Guaranteed Death Benefit Value for a Contract with the Maximum Anniversary Value Death Benefit |
Next anniversary’s annual maximum Income Payment |
|||||
After withdrawal | $ 98,400 | $ 95,500 | $ 88,560 | $ 103,320 | $ 4,723 |
If we increase the Contract Value to equal the death benefit due to a spousal continuation of the Contract during the last Income Benefit Year, we also subtract the amount of this increase from the Contract Value on the next Income Benefit Anniversary when determining annual payment increases under the Level Income option. |
• | If you select multiple Index Options, we take the weighted average of all DPSCs, Protection Credits, and locked increased Index Option Values based on the percentage of Contract Value in each of your selected Index Options to determine your payment increase as indicated in the example below. |
• | When calculating this payment increase we use the Contract Value determined at the end of the Business Day before we apply any Credits, or we deduct any Income Payment, Excess Withdrawal, Contract fees or expenses, or investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract. If the Income Benefit Date or an Income Benefit Anniversary does not occur on a Business Day, we use Contract Values from the next Business Day. |
• | If you selected multiple Index Options, we determine your weighted average of all DPSCs, Protection Credits, and locked Daily Adjustments using the percentage of Contract Value in each Index Option either at the end of the prior Business Day before your Contract Value reduced to zero, or at the end of the Business Day on the Annuity Date if you convert Income Payments to Annuity Payments. |
• | We determine this Contract Value after we apply any Daily Adjustments (if this day is not an Index Anniversary) or Credits (if this day is an Index Anniversary), and after we deduct any Income Payment, Excess Withdrawal, Contract fees and expenses, or investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract. |
• | You can change the proportions that we use to calculate this weighted average by submitting an authorized request to our Service Center. |
• | have to stay in an eligible facility (a hospital, nursing facility, or assisted living facility) for at least 90 days in a consecutive 120-day period, or |
• | are unable to perform at least two of six activities of daily living (ADLs) for at least 90 consecutive days. ADLs include bathing, dressing, toileting, continence, eating, and transferring (moving into or out of a bed, chair, or wheelchair). |
• | The Annuity Date. |
• | The Income Benefit Anniversary that occurs on or immediately after the date the Contract Value is reduced to zero. |
• | The Business Day the Income Benefit ends. |
• | The Business Day the Contract ends. |
• | The Business Day all Eligible Persons or Covered Persons are removed from the Contract because they no longer meet the requirements (Owner, Annuitant or sole Beneficiary) stated in section 3. If this occurs after the Income Benefit Date, Income Payments stop when the last Covered Person is removed from the Contract. |
• | The Index Anniversary upon which the younger Eligible Person reaches age 100 if it occurs before the Income Benefit Date. |
• | The Business Day we process your request for a full withdrawal, other than a full withdrawal caused by an Income Payment. |
• | The Income Benefit Date or an Income Benefit Anniversary if the annual maximum Income Payment is less than $100. |
• | Upon the death of an Owner (or Annuitant if the Owner is a non-individual), the end of the Business Day we first receive a Valid Claim from any one Beneficiary. However, if a federally recognized spouse is an Eligible Person or Covered Person and continues this Contract, the Income Benefit also continues. |
• | During the Accumulation Phase and before the Income Benefit Date, the Income Benefit ends on the date of death of the last surviving Eligible Person. |
• | During the Income Period, the Income Benefit ends on the date of death of the last surviving Covered Person. |
• | The Business Day the Contract ends. |
If we receive notice of death of a Covered Person during the Income Period we will suspend Income Payments and the Income Benefit will end as described above. However, if a federally recognized spouse who is also a joint Covered Person continues this Contract, we will resume Income Payments and add any Income Payments that we would have paid between the time we suspended Income Payments and when they resume to future Income Payments. |
• | total Purchase Payments reduced for withdrawals you take if you select the Traditional Death Benefit, or |
• | the Maximum Anniversary Value if you select the Maximum Anniversary Value Death Benefit. |
• | We increase it by the dollar amount of any additional Purchase Payments. |
• | We reduce it by the percentage of any Contract Value you withdraw (including any MVA). |
• | its current value after processing any additional Purchase Payments, or withdrawals you take (including any MVA), or |
• | the Contract Value determined at the end of the Business Day after we process all daily transactions including Credits, any additional Purchase Payments, withdrawals you take including any MVA, and deductions we make for Contract fees, expenses, and investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract. Contract Value reflects the Daily Adjustment if you select a 3-year or 6-year Term Index Option and this anniversary is not a Term End Date. Negative Index Option performance, withdrawals you take, and deductions we make for Contract fees, expenses, and investment advisory fees you authorize your Financial Professional’s firm to receive from the Contract decrease the Contract Value and reduce the likelihood of receiving increases to the Maximum Anniversary Value. |
• | the older Determining Life’s 91st birthday, or |
• | the end of the Business Day we receive the first Valid Claim from any one Beneficiary. |
During the Income Period: |
• You cannot make additional Purchase Payments. If your Contract includes the Traditional Death Benefit this means the Guaranteed Death Benefit Value no longer increases. |
• Index Precision Strategy, Index Performance Strategy, and Index Guard Strategy are no longer available. This may limit your Contract’s performance potential and the Guaranteed Death Benefit Value if your Contract includes the Maximum Anniversary Value Death Benefit. Income Payments and Excess Withdrawals also decrease your Contract Value, which also reduces the likelihood of locking in investment gains to the Guaranteed Death Benefit Value if your Contract includes the Maximum Anniversary Value Death Benefit. |
• Each Income Payment and any Excess Withdrawal reduces the Guaranteed Death Benefit Value by the percentage of Contract Value withdrawn (including any MVA), which means this value may be reduced by more than the amount withdrawn. Taking Excess Withdrawals may also cause your selected death benefit to end prematurely. |
• | Guaranteed Death Benefit Value determined at the end of the Business Day we receive the first Valid Claim from any one Beneficiary, |
• | Contract Value determined at the end of the Business Day during which we receive his or her Valid Claim, or |
• | Cash Value determined at the end of the Business Day during which we receive his or her Valid Claim. |
• | If a Determining Life dies before you, we do not pay a death benefit to the Beneficiary(s) but we may increase the Contract Value if the Traditional Death Benefit or Maximum Anniversary Value Death Benefit are still in effect. At the end of the Business Day we receive due proof of a Determining Life’s death if the Contract Value is less than the Cash Value or Guaranteed Death Benefit Value, we increase the Contract Value to equal the the greatest of these amounts, and your selected death benefit ends. We allocate any Contract Value increase to the AZL Government Money Market Fund. Then on the next Index Anniversary we transfer the Variable Account Value to the Index Options according to your allocation instructions. |
• | Upon your death your Beneficiary(s) receive the the greater of Contract Value or Cash Value determined at the end of the Business Day during which we receive each Beneficiary’s Valid Claim. |
• | The Business Day before the Annuity Date. |
• | The Business Day that the Guaranteed Death Benefit Value and Contract Value are both zero. |
• | Upon the death of a Determining Life, the end of the Business Day we receive a Valid Claim from all Beneficiaries if you and the Determining Life are the same individuals, or if you and the Determining Life (Lives) are different individuals and die within 120 hours of each other. |
• | Upon the death of a Determining Life, the end of the Business Day we receive due proof of the Determining Life’s death if you and the Determining Life (Lives) are different individuals and do not die within 120 hours of each other. |
• | Upon the death of an Owner (or Annuitant if the Owner is a non-individual), the end of the Business Day we receive the first Valid Claim from any one Beneficiary, if the Owner (or Annuitant) is no longer a Determining Life. |
• | The Business Day the Contract ends. |
We base the Guaranteed Death Benefit Value on the first death of a Determining Life (or Lives). This means that upon the death of an Owner (or Annuitant if the Owner is a non-individual), if a surviving spouse continues the Contract: |
• the Guaranteed Death Benefit Value is no longer available, and |
• if you selected the Maximum Anniversary Value Death Benefit, we no longer assess its 0.20% rider fee. |
Also, if you and the Determining Life (Lives) are different individuals and you die first, the Guaranteed Death Benefit Value is not available to your Beneficiary(s). |
• | he or she becomes the new Owner and may exercise all of the Owner’s rights, including naming a new Beneficiary or Beneficiaries; |
• | he or she is subject to any remaining MVA; and |
• | upon the surviving spouse’s death their Beneficiary(s) receive the Contract Value determined at the end of the Business Day during which we receive a Valid Claim from each Beneficiary. |
Type of Contract | Persons and Entities that can buy the Contract |
IRA | Must have the same individual as Owner and Annuitant. |
Roth IRA | Must have the same individual as Owner and Annuitant. |
Simplified Employee Pension (SEP) IRA | Must have the same individual as Owner and Annuitant. |
Certain Code Section 401 Plans | A qualified retirement plan is the Owner and the Annuitant must be an individual. We may determine which types of qualified retirement plans are eligible to purchase this Contract. |
• | Taxes on earnings are deferred until you take money out. Non-Qualified Contracts owned by corporations or partnerships do not receive income tax deferral on earnings. |
• | When you take money out of a Non-Qualified Contract, earnings are generally subject to federal income tax and applicable state income tax. All pre-tax money distributed from Qualified Contracts are subject to federal and state income tax, but qualified distributions from Roth IRA Contracts are not subject to federal income tax. This prospectus does not address specific state tax laws. You should discuss state taxation with your tax adviser. |
• | Taxable distributions are subject to an ordinary income tax rate, rather than a capital gains rate. |
• | Distributions from Non-Qualified Contracts are considered investment income for purposes of the Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may apply to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax adviser for more information. |
• | If you take partial withdrawals from your Non-Qualified Contract, the withdrawals are generally taxed as though you were paid taxable earnings first, and then as a non-taxable return of Purchase Payments. |
• | If you annuitize your Non-Qualified Contract and receive a stream of Annuity Payments, you receive the benefit of the exclusion ratio. The exclusion ratio is a calculation that causes a portion of each Annuity Payment to be non-taxable, based upon the percentage of your Contract Value that is from Purchase Payments. Purchase Payments are treated as a non-taxable return of principal, whereas earnings are taxable. |
• | If you take partial withdrawals or annuitize a Qualified Contract, you will be responsible for determining what portion, if any, of the distribution consists of after-tax money. |
• | Requests to have us pay investment advisory fees from this Contract to your Financial Professional's firm will not be treated as taxable distributions if the requirements discussed in section 1 - Investment Advisory Fees, are satisfied. If the requirements stated in section 1 are not met, deduction of these investment advisory fees may result in a taxable distribution. You should consult a tax adviser regarding the tax treatment of the payment of investment advisory fees from your Contract since federal and/or state taxing authorities could determine that such fees should be treated as taxable distributions. |
• | Income Payments are taxed as partial withdrawals before the Contract Value is reduced to zero. |
• | If you take out earnings before age 59 1⁄2, you may be subject to a 10% additional federal tax, unless you take a lifetime annuitization of your Contract or you take money out in a stream of substantially equal payments over your expected life in accordance with the requirements of the Code. If the Contract is jointly owned, we send each Joint Owner a check for half of the withdrawal amount and tax that Joint Owner individually. This can create a discrepancy in taxation if only one Joint Owner is under age 59 1⁄2 because that Joint Owner will be subject to the 10% additional federal tax. |
• | A pledge, assignment, or ownership change of a Contract may be treated as a taxable event. You should discuss any pledge, assignment, or ownership change of a Contract with your tax adviser. |
• | If you purchase multiple non-qualified deferred annuity contracts from an affiliated group of companies in one calendar year, these contracts are treated as one contract for purposes of determining the tax consequences of any distribution. |
• | Death benefit proceeds from Non-Qualified Contracts are taxable to the beneficiary as ordinary income to the extent of any earnings. Death benefit proceeds must be paid out in accordance with the requirements of the Code. |
• | Depending upon the type of Qualified Contract you own, required minimum distributions (RMDs) must be satisfied when you reach a certain age. If you enroll in our minimum distribution program, we make RMD payments to you that are designed to meet this Contract’s RMD requirements. |
• | When you take money out of a Contract, we may deduct premium tax that we pay on your Contract. This tax varies from 0% to 3.5%, depending on your state. Currently, we pay this tax and do not pass it on to you. |
• | you might have to pay a withdrawal charge on your previous contract, |
• | you are subject to an MVA for this Contract, which can be negative, |
• | other fees and expenses under this Contract may be higher (or lower), |
• | the benefits may be different, and |
• | you no longer have access to any benefits from your previous contract. |
• | overhead, |
• | legal fees, |
• | accounting fees, |
• | Financial Professional training, |
• | compensation for the ALFS management team, and |
• | other expenses associated with the Contracts. |
• | marketing services and increased access to their Financial Professionals; |
• | sales promotions relating to the Contracts; |
• | costs associated with sales conferences and educational seminars; |
• | the cost of client meetings and presentations; and |
• | other sales expenses incurred by them. |
• | issuance and maintenance of the Contracts, |
• | maintenance of Owner records, and |
• | routine customer service including: |
– | processing of Contract changes, |
– | processing withdrawal requests (both partial and total), and |
– | processing requests for fixed annuity payments. |
• | Walter R. White, President and Chief Executive Officer |
• | William E. Gaumond, Senior Vice President, Chief Financial Officer and Treasurer |
• | Eric J. Thomes, Senior Vice President, Chief Distribution Officer |
• | Jasmine M. Jirele, Senior Vice President, Chief Growth Officer |
• | Neil H. McKay, Senior Vice President, Chief Actuary |
• | providing total compensation opportunities that are competitive with the levels of total compensation available at the large diversified financial services companies with which Allianz Life most directly competes in the marketplace; |
• | setting performance metrics and objectives for variable compensation arrangements that reward executives for attaining both annual targets and long-term business objectives, thereby providing individual executives with the opportunity to earn above-average compensation by achieving above-average results; |
• | establishing equity-based arrangements that align executives’ financial interests with those of Allianz SE by ensuring executives have a material financial stake in the equity value of Allianz SE and the business success of its affiliates; and |
• | structuring compensation packages and outcomes to foster internal pay equity. |
Compensation Element | Description | Objective |
Base Salary | Fixed rate of pay that compensates employees for fulfilling their basic job responsibilities. For NEOs, increases are generally provided in the case of a significant increase in responsibilities or a significant discrepancy versus the market. | Attract and retain high-caliber leadership. |
Annual Incentive Plan | Incentive compensation that promotes and rewards the achievement of annual performance objectives through awards under the Allianz Life Annual Incentive Plan (“AIP”). | • Link compensation to annual performance results. • Attract and motivate high-caliber leadership. • Align the interests of NEOs and our stockholder. |
Performance-Based Equity Incentives | Incentive compensation through restricted stock unit awards made under the Allianz Equity Incentive Plan (“AEI”) that promotes and rewards the achievement of long term performance objectives. | • Retain high-caliber leadership with multi-year vesting. • Align the interests of NEOs and our stockholder. |
Severance Arrangements | Severance payments to employees, including NEOs, under certain company-initiated termination events. | Compensate employees for situations where the employee’s employment is involuntarily terminated in a qualifying termination of employment. |
Perquisites-Benefits | Perquisites provided to our NEOs include employer matching contributions to the NEOs’ accounts in the 401(k) plan and may also include the payment of life insurance premiums, relocation reimbursements, and reimbursements for financial planning, tax preparation services, and spousal travel expenses. | Provide market competitive total compensation package. |
• | In general, establish the compensation philosophy and strategy of Allianz Life and oversee the development and implementation of compensation, benefit, and perquisite programs for corporate executives consistent with the principles of ensuring that leadership is compensated effectively in a manner consistent with the stated compensation strategy, internal equity considerations, competitive practices, shareholder interests, and the requirements of any applicable regulatory bodies in order to attract and retain high-quality leadership. This responsibility includes periodic review of Allianz Life’s compensation programs to pursue certain goals, with the expectation that changes will be made periodically to ensure these goals are attained. |
• | Review and approve the establishment of, or material modification to, any executive incentive compensation plans or programs for Allianz Life. |
• | Review and approve any special benefits or perquisites in effect for, or offered to, any prospective, current or former Allianz Life employee, regardless of the employee’s level or assignment within Allianz Life. Such benefits and perquisites are those that are unusual or different from the benefits offered to all similarly-situated employees. |
• | Review and approve any employment agreements proposed to be made with any prospective or current employee of Allianz Life. |
• | Review and approve any individual severance agreement with any Allianz Life officer. This does not include an arrangement where the employee receives severance or incentive payments under existing terms of a broad-based benefit or compensation plan. |
• | Oversee Allianz Life’s compliance with regulations with respect to compensation matters and adopt and monitor adherence to global and local process requirements and timelines, including those required under the Corporate Rules (as defined under the Allianz Life Standard for Corporate Rules) mandated by Allianz SE. |
• | evaluating the compensation data from industry groups, national executive pay surveys, and other sources for the NEOs and other executive officers as appropriate; |
• | gathering and correlating performance ratings and reviews for individual executive officers, including the NEOs; |
• | reviewing executive compensation recommendations against appropriate market data and for internal consistency and equity; and |
• | reporting to, and answering requests for information from, the Compensation Committee. |
• | reward the performance of participants who have made significant contributions to the achievement of annual goals and objectives; |
• | provide an incentive that will encourage future superior individual performance; and |
• | encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of Allianz Life. |
• | reward the performance of participants who have made significant contributions to the achievement of their company’s annual goals and objectives, |
• | provide an incentive that will encourage future superior individual performance, and |
• | encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success Allianz. |
Name and Principal Position (a) |
Year (b) |
Salary (c) |
Bonus (d) |
Stock Awards (e)(2) |
Non-Equity Incentive Plan Compensation (g) |
All Other Compensation (i)(3) |
Total (j) |
Walter R. White President and Chief Executive Officer |
2020 | $865,100 | N/A | $1,593,774 | $1,062,516 | $27,721 | $3,549,111 |
William E. Gaumond Senior Vice President, Chief Financial Officer and Treasurer |
2020 | $468,885 | N/A | $482,241 | $321,494 | $26,300 | $1,298,920 |
Eric J. Thomes Senior Vice President, Chief Distribution Officer |
2020 | $525,000 | N/A | $699,679 | $333,119 | $30,427 | $1,588,225 |
Jasmine M. Jirele Senior Vice President, Chief Growth Officer |
2020 | $458,380 | $200,000(1) | $471,436 | $314,291 | $22,787 | $1,466,894 |
Neil H. McKay Senior Vice President, Chief Actuary |
2020 | $510,000 | N/A | $490,212 | $326,808 | $27,538 | $1,354,558 |
(1) | A retention bonus of $800,000 will be paid over four years in increments of $200,000 with the first payment paid in March 2019 and the final payment in 2022 so long as Ms. Jirele remains employed by Allianz Life. |
(2) | Represents the grant date fair value of the RSUs issued pursuant to the AEI. The RSUs vest over a four-year period. The RSUs issued in 2021 for the 2020 performance year have a March 2025 exercise date. The grant price of the RSUs was the arithmetic average of the closing prices of an |
Allianz SE share in the electronic cash market trading system Xetra (or any successor system) on the date of grant and the nine immediately preceding trading days, less the present value of dividends expected to be paid on one Allianz SE share over the vesting period, and less the fair value of the payout restrictions deriving from the vesting period and the payout cap. These numbers show the amount realized for financial reporting purposes as calculated in accordance with the FASB ASC Topic 718. Under FASB ASC Topic 718, the grant date fair value is calculated using the closing market price of the common stock of Allianz SE on the date of grant, which is then recognized over the requisite service period of the award. | |
(3) | The following table provides additional details regarding compensation found in the “All Other Compensation” column. |
Name | Year | Spousal Travel(4) |
Milestone/ Anniversary/ Recognition(5) |
Life Insurance Premiums |
Employer Match to 401(k) Plan |
ASAAP Contribution(6) |
Total |
Walter R. White | 2020 | $5,431 | -- | $915 | $21,375 | -- | $27,721 |
William E. Gaumond | 2020 | $4,257 | -- | $668 | $19,500 | $1,875 | $26,300 |
Eric J. Thomes | 2020 | $6,445 | $1,800 | $807 | $19,500 | $1,875 | $30,427 |
Jasmine M. Jirele | 2020 | -- | $1,000 | $412 | $19,500 | $1,875 | $22,787 |
Neil H. McKay | 2020 | $5,431 | -- | $732 | $21,375 | -- | $27,538 |
(4) | Represents reimbursement or payments made to defray the costs of a spouse’s travel. |
(5) | Represents Milestone Anniversary Program, which pays a bonus at three and five year anniversaries, and then every five years thereafter. |
(6) | Represents company matching contribution to the Allianz Supplemental Asset Accumulation Plan for deferrals in excess of IRS compensation limit. |
Name (a) |
Grant Date (b) |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1),(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | ||||
Threshold ($) (c) |
Target ($) (d) |
Maximum ($) (e) |
Threshold ($) (f) |
Target ($) (g) |
Maximum ($) (h) |
||
Walter R. White | 3/5/2021 | ||||||
RSUs (under AEI) | $0 | $1,557,180 | $7,708,041 | ||||
AIP Award | $0 | $1,038,120 | $1,712,898 | ||||
William E. Gaumond | 3/5/2021 | ||||||
RSUs (under AEI) | $0 | $506,396 | $2,506,659 | ||||
AIP Award | $0 | $337,597 | $675,194 | ||||
Eric J. Thomes | 3/5/2021 | ||||||
RSUs (under AEI) | $0 | $567,000 | $2,806,650 | ||||
AIP Award | $0 | $378,000 | $756,000 | ||||
Jasmine M. Jirele | 3/5/2021 | ||||||
RSUs (under AEI) | $0 | $495,050 | $2,450,499 | ||||
AIP Award | $0 | $330,034 | $660,067 | ||||
Neil H. McKay | 3/5/2021 | ||||||
RSUs (under AEI) | $0 | $550,800 | $2,726,460 | ||||
AIP Award | $0 | $367,200 | $734,400 |
(1) | The target and maximum columns show the target award and maximum award for 2020 for each NEO under the AIP. There is no threshold amount for any participant in the AIP. The actual 2020 awards granted to the NEOs are listed in the Non-Equity Incentive Compensation column of the Summary Compensation Table. AIP target and maximum awards are a pre-designated percentage of base salary determined at the executive’s level. |
(2) | RSUs have a vesting schedule as disclosed in the footnotes to the Summary Compensation Table. See “Outstanding Equity Awards at December 31, 2020” for disclosure regarding the number of RSUs that are unvested as of December 31, 2020. |
(3) | The target and maximum columns show the target award and maximum award for 2020 for each NEO under the AEI. There is no threshold amount for any participant in the AEI. The actual 2020 awards granted to the NEOs are listed in the Stock Awards column of the Summary Compensation Table. |
Name (a) |
RSUs | |
Number of RSUs That Have Not Vested (g)(1),(2) |
Market Value of RSUs That Have Not Vested (h)(3) |
|
Walter R. White | ||
8,161 | $1,985,898 | |
7,030 | $1,710,680 | |
5,239 | $1,274,858 | |
6,097 | $1,483,644 | |
William E. Gaumond | ||
1,452 | $353,330 | |
2,039 | $496,170 | |
1,538 | $374,257 | |
1,948 | $474,026 | |
Eric J. Thomes | ||
617 | $150,141 | |
492 | $119,723 | |
457 | $111,206 | |
1,474 | $358,683 | |
Jasmine M. Jirele | ||
0 | $0 | |
0 | $0 | |
1,467 | $356,980 | |
1,886 | $458,939 | |
Neil H. McKay | ||
2,550 | $620,517 | |
2,203 | $536,078 | |
1,731 | $421,222 | |
2,123 | $516,611 |
(1) | Represents unvested RSUs issued pursuant to the AEI. RSUs issued under the AEI during 2020 are subject to a four-year vesting period from the grant date. At the end of the respective vesting period, the RSUs are exercised uniformly for all participants, provided they remain employed by Allianz Life or terminate after retirement or early retirement eligibility, or under certain other circumstances. Vesting and exercise may accelerate if a participant leaves employment under other “good leaver” circumstances set forth in the AEI. |
(2) | For each of the NEOs, the number of RSUs listed on the first line were exercised in 2021, the RSUs listed on the second line will exercise in 2022, the RSUs listed on the third line will exercise in 2023, and the RSUs listed on the fourth line will exercise in 2024. |
(3) | Based on an assumed stock price of $243.34 per share, which was the arithmetic average of the closing prices of an Allianz SE share in the electronic cash market trading system Xetra (or any successor system) on December 30, 2020 and the nine immediately preceding trading days, converted from Euros into U.S. dollars. |
Name | Stock Awards | |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($)(1) |
|
Walter R. White | 10,097 | $2,259,088 |
William E. Gaumond | 721 | $161,315 |
Eric J. Thomes | 732 | $163,777 |
Jasmine M. Jirele | - | $0 |
Neil H. McKay | 3,536 | $791,140 |
(1) | Represents Allianz SE RSUs that were exercised during 2020 pursuant to the AEI. Amounts realized were paid in cash. |
NEOs | Lump Sum Payment |
Walter R. White | $1,730,200 |
William E. Gaumond | $703,328 |
Eric J. Thomes | $787,500 |
Jasmine M. Jirele | $687,570 |
Neil H. McKay | $765,000 |
(1) | Mr. White is not eligible to receive payments pursuant to the Executive Severance Plan. See “Allianz Life Executive Severance Agreement” for information regarding severance payments that Mr. White is eligible to receive upon termination of service. |
Name | Fees Earned or Paid in Cash ($)(1) |
Total ($) |
(a) | (b) | (h) |
Jacqueline Hunt(2) Chair of the Board |
N/A | N/A |
Walter R. White(3) President and Chief Executive Officer |
N/A | N/A |
William E. Gaumond(3) Senior Vice President, Chief Financial Officer and Treasurer |
N/A | N/A |
Anna Sophie Herken(3) Non-Independent Director |
N/A | N/A |
Ronald M. Clark Independent Director |
$10,000 | $10,000 |
Howard E. Woolley Independent Director |
$40,000 | $40,000 |
Kevin E. Walker Independent Director |
$50,000 | $50,000 |
Udo Frank Independent Director |
$75,000 | $75,000 |
(1) | Represents cash compensation provided to our independent directors that is formalized in the Non-Employee Director Compensation Plan for the year ended December 31, 2020. |
(2) | Mses. Hunt and Herken did not receive any compensation for their services as directors since they are employed by one of our affiliates. |
(3) | As employee directors, Messrs. White and Gaumond do not receive any compensation for their service as directors. The compensation Messrs. White and Gaumond received as executive officers of Allianz Life is disclosed in the Summary Compensation Table as set forth herein. |
• | Difficult Economic Conditions. Our financial condition is materially affected by conditions in the global capital markets and the economy generally. During an economic downturn, the demand for our financial insurance products and services could be adversely affected. In addition, an economic downturn could cause the number and amount of full and partial withdrawals under our insurance products to increase significantly, and owners of our insurance products may choose to defer making purchase payments or paying insurance premiums or stop them altogether. |
• | Unfavorable Interest Rate Environments. During periods of declining interest rates, we may experience financial losses as the spread between interest rates that we credit to customers under our insurance products and returns on our investments tighten. The ongoing low interest rate environment presents challenges for us and other life insurance companies, as it has generally reduced investment returns, raised the value of future obligations, and challenged asset-liability matching. During periods of increasing interest rates, we may experience financial losses due to increases in full and partial withdrawals under our insurance products as our customers choose to forgo insurance protection in favor of potentially higher returns. Although we take measures to manage economic risks associated with different interest rate environments, we may not be able to fully mitigate those risks. |
• | Losses on Fixed Maturity Investments. Our fixed maturity investments are subject to interest rate risk and credit risk. Interest rate risk refers to how the values of our fixed maturity investments fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally result in decreases and increases, respectively, in the values of our fixed maturity investments. Credit risk refers to the risk that a counterparty will default on its commitments to us under a fixed maturity investment. See “Defaults by Counterparties” below. |
• | Losses on Equity Investments. Our equity investments are generally valued based on quoted market prices and are subject to market risk. Market risk refers to how market prices for equity investments are subject to fluctuation. A downward fluctuation in the market price for an equity investment could result in losses upon the sale of that investment. Fluctuations in market prices may result from, among other things, actual or perceived changes in the attractiveness of specific investments or in general market conditions. |
• | Losses on Real Estate Investments. A portion of our investment portfolio consists of mortgage loans and mortgage-backed securities related to commercial, agricultural and residential real estate. The value of our real estate investments may be negatively impacted by general economic conditions in the real estate sector, including supply and demand, market volatility, and interest rate fluctuations, as well as the creditworthiness of obligors. |
• | Losses upon the Sale of Illiquid Investments. We hold certain investments that may lack liquidity, such as privately placed fixed maturity investments, mortgage loans, collateralized debt obligations, commercial mortgage-backed securities, equity real estate and limited partnership interests. Although we seek to minimize the likelihood that we would need to sell illiquid investments, if we were required to liquidate these investments on short notice, we may have difficulty doing so and may be forced to sell them for less than their fair value. |
• | Loss of Market Share to Competitors. There is strong competition among insurers, banks, brokerage firms and other financial institutions and providers seeking clients for the types of products and services that we provide. A loss of market share to our competitors could result in financial losses to our business. Our ability to successfully compete is dependent on numerous factors, some of which include the successful implementation of our business strategy, our financial strength, the attractiveness of our products and services, our relationships with distributors, and our reputation. Our ability to compete may also be hindered if our competitors obtain or seek to enforce intellectual property rights against us, or if we are otherwise precluded from offering products or services that are in demand. Our ability to compete may also be hindered if we are not able to protect or enforce our own intellectual property rights. |
• | Defaults by Counterparties. Third-parties that owe us money, securities, or other assets may not fulfill their obligations to us. These parties may include issuers of investments that we may hold, borrowers under loans that we may hold or extend, counterparties under swap and other derivative contracts and other third-parties (e.g., customers, trading counterparties, brokers, dealers, banks, investment funds, clearing agents, exchanges and clearing houses). In addition, with respect to secured transactions, the risk of default may be exacerbated when the collateral held by us cannot be liquidated or is liquidated at a price that is not sufficient to cover the full amount owed to us. A party may default on its obligations for a variety of reasons, including bankruptcy, lack of liquidity, downturns in the economy or real estate market and operational failure. General economic conditions and trends may also result in increased defaults. |
• | Impairments of Other Financial Institutions. We routinely execute transactions with counterparties in the financial services industry, including brokers, dealers, commercial banks, investment banks, insurers, reinsurers and other investment and financial institutions. A disruption to, or decline in the financial condition of, such financial institutions may expose us to financial losses. |
• | Payments through Guaranty Associations. When an insurance company becomes insolvent, state insurance guaranty associations have the right to assess other insurance companies doing business in their state for funds to pay obligations to policyholders of the insolvent company, up to the state-specified limit of coverage. The future failure of a large life, health or annuity insurer could trigger assessments which we would be obligated to pay. Further, amounts for historical insolvencies may be assessed over many years, and there can be significant uncertainty around the total obligation for a given insolvency. |
• | Ineffectiveness of Risk Management Policies. Our risk management policies and procedures intended to identify, monitor and manage economic risks may not be fully effective at mitigating our risk exposure in all market environments or against all types of risk. This could cause us to incur investment losses or cause our hedging and other risk management strategies to be ineffective. |
• | reductions in new sales of insurance products, annuities and other investment products; |
• | increases in our cost of capital or limitations on our access to sources of capital; |
• | harm to our relationships with distributors and sales specialists; |
• | material increases in the number or amount of full and partial withdrawals under our insurance products; |
• | pressure on us to reduce prices or increase crediting rates for many of our insurance products; and |
• | harm to our ability to obtain reinsurance or obtain reasonable pricing for reinsurance. |
• | training and educating our employees regarding our obligations relating to confidential information; |
• | monitoring changes in state or federal privacy and compliance requirements; |
• | drafting appropriate contractual provisions into any contract that raises proprietary and confidentiality issues; |
• | maintaining secure storage facilities for tangible records; |
• | limiting access to electronic information; and |
• | in the event of a security breach, providing credit monitoring or other services to affected customers. |
• | Economic conditions and uncertainties may negatively impact the value, cash flow, and liquidity of our general account investments due to, e.g., market volatility, reduced liquidity, changes in interest rates, economic shutdowns or slowdowns, government regulations, and counterparty defaults. |
• | Voluntary or government mandated hardship assistance that we provide to our customers in the form of, e.g., grace periods for failure to make timely payments, may reduce our net income and surplus. |
• | Reductions in new sales of our financial products or reductions in fees collected by us, or increases in full withdrawals, cancellations, or defaults with respect to our customers’ existing financial products, as a result of economic conditions and uncertainties may reduce our net income and surplus. |
• | Economic conditions and uncertainties may limit our access to sources of capital and our ability to obtain reinsurance. |
• | Voluntary and government mandated pandemic mitigation efforts, such as prolonged remote working arrangements and economic shutdowns, and employees’ ability or willingness to fulfill their responsibilities during the pandemic, may disrupt our ability to administer our insurance contracts (including our ability to timely process applications, transactions, and payments and to calculate values) and may disrupt the services provided by third-parties upon which we rely to administer our insurance contracts. |
• | From you, either directly or through our financial professionals. This may include information provided on your insurance application or other forms you may complete. The information we collect includes, but is not limited to, your name, Social Security number, address, telephone number, mobile phone number, and email address. |
• | From others, through the process of issuing a policy or handling a claim. This may include information from consumer reporting agencies and medical or accident reports. |
• | From your doctor or during a home visit by a health care professional. This may include your health records gathered with your written consent. |
• | From your relationship with us. For example, this may include the number of years you have been a customer or the types of products you have purchased. |
• | From data brokers that collect publicly available information about you. This includes household information, financial transactions, and social media activity. |
• | With people and entities when we have your consent to share your information. |
• | With our affiliates and other third parties in order to process your application, or administer or service your policy. |
• | With consumer reporting agencies to obtain a medical report, credit report, or motor vehicle report. These reports are used to decide eligibility for a policy or to process transactions you request. |
• | With our financial professionals so that they can service your policy. They may also inform you of other Allianz products and services that may be of interest to you. |
• | With health care providers in order to process your claim. |
• | As required or otherwise permitted by law. This may include sharing information with state insurance agencies, law enforcement, and other government officials. We may also share your information to respond to subpoenas, court orders, and other legal requests. |
• | With research groups to conduct studies on our business to improve the products and services we offer. |
• | To inform you of products and services that may be of interest to you. These communications may be made by us, our financial professionals, or through third parties. |
• | With our affiliates so they can market their products and services to you. State insurance laws do not allow you to restrict this disclosure. |
• | Allianz Life Insurance Company of North America |
• | Allianz Life Financial Services, LLC |
• | sponsor, endorse, sell or promote Allianz products. |
• | recommend that any person invest in Allianz products or any other securities. |
• | have any responsibility or liability for or make any decisions about the timing, amount or pricing of Allianz products. |
• | have any responsibility or liability for the administration, management or marketing of Allianz products. |
• | consider the needs of Allianz products or the owners of Allianz products in determining, composing or calculating the EURO STOXX 50 or have any obligation to do so. |
• | STOXX, Deutsche Börse Group and their licensors, research partners or data providers do not give any warranty, express or implied, and exclude any liability about: |
• | The results to be obtained by Allianz products, the owner of Allianz products or any other person in connection with the use of the EURO STOXX 50 and the data included in the EURO STOXX 50; |
• | The accuracy, timeliness, and completeness of the EURO STOXX 50 and its data; |
• | The merchantability and the fitness for a particular purpose or use of the EURO STOXX 50 and its data; |
• | The performance of Allianz products generally. |
• | STOXX, Deutsche Börse Group and their licensors, research partners or data providers give no warranty and exclude any liability, for any errors, omissions or interruptions in the EURO STOXX 50 or its data; |
• | Under no circumstances will STOXX, Deutsche Börse Group or their licensors, research partners or data providers be liable (whether in negligence or otherwise) for any lost profits or indirect, punitive, special or consequential damages or losses, arising as a result of such errors, omissions or interruptions in the EURO STOXX 50 or its data or generally in relation to Allianz products, even in circumstances where STOXX, Deutsche Börse Group or their licensors, research partners or data providers are aware that such loss or damage may occur. |
(i) | any Index gains during the Term subject to the applicable DPSC, Precision Rate, Cap, and/or Participation Rate, |
(ii) | either any Index losses greater than the Buffer or Index losses down to the Floor, and |
(iii) | the number of days until the Term End Date. |
(a) | change in Proxy Value = (current Proxy Value – beginning Proxy Value) |
(b) | proxy interest = beginning Proxy Value x (1 – time remaining during the Term) |
ISSUE STATE | FEATURE AND BENEFITS | VARIATION |
Connecticut | Income Multiplier Benefit See section 9 |
This benefit is not available. |
Eligible Person(s) and Covered Person(s) See section 2 |
We do not remove a person as an Eligible Person(s) or Covered Person(s) following an assignment, ownership change, or Beneficiary Change. | |
Florida | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 |
We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
Purchase Requirements See section 3 |
We can only decline a Purchase Payment if it would cause total Purchase Payments to be more than $3 million, or if it would otherwise violate the Purchase Payment restrictions of your Contract (for example, we do not allow additional Purchase Payments on or after the Annuity Date). | |
When Annuity Payments Begin See section 8 |
The earliest acceptable Annuity Date is one year after the Issue Date. | |
Hawaii | Income Multiplier Benefit See section 9 |
This benefit is not available. |
Montana | Access to Your Money See section 7 |
If you take a partial withdrawal that reduces the Contract Value below $2,000, we contact you and give you the option of modifying your withdrawal request. If we cannot reach you within seven days of our receipt of your request in Good Order at our Service Center, we process your request as a full withdrawal. |
New Jersey | Joint Owner See section 2 |
We allow civil union partners to be Joint Owners. |
Determining Life (Lives) See section 2 |
We allow civil union partners to be joint Determining Lives. | |
Eligible Person(s) and Covered Person(s) See section 2 |
We allow civil union partners to be joint Eligible Persons and joint Covered Persons. If at any time joint Eligible Persons or joint Covered Persons are no longer civil union partners you must send us written notice. If we receive notice on or before the Income Benefit Date, joint Income Payments will not be available to you. If we receive notice after the Income Benefit Date, we will remove one former civil union partner from the Contract as a Covered Person and also as an Owner, Joint Owner, Annuitant and/or Beneficiary. |
ISSUE STATE | FEATURE AND BENEFITS | VARIATION |
New Jersey (continued) | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 |
We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
Purchase Requirements See section 3 |
The maximum total Purchase Payments that we can accept is $3 million. We must decline a Purchase Payment if it would cause total Purchase Payments to be more than $3 million, or if it would otherwise violate the Purchase Payment restrictions of your Contract (for example, we do not allow additional Purchase Payments on or after the Annuity Date). | |
Ohio | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 |
We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
Pennsylvania | Income Multiplier Benefit See section 9 |
The requirement for staying in an eligible facility (a hospital, nursing facility, or assisted living facility) is at least 90 days provided each day of confinement is no more than 6 months after the previous day of confinement. |
Texas | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 |
We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
Access to Your Money See section 7 |
We only treat a partial withdrawal that reduces the Contract Value below $2,000 as a full withdrawal if you have not made an additional Purchase Payment in the past two calendar years. | |
Income Multiplier Benefit See section 9 |
To qualify for a payment increase based on performance of ADLs, a Covered Person must have been able to perform each of these six ADLs on the Issue Date. | |
Wisconsin | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 |
We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |