Allianz Life launched a new fixed indexed annuity (FIA) while slumping sales forced it to discontinue another product.
Its latest FIA, Allianz Signature 7, is targeted to the registered rep and broker-dealer community, according to Matt Gray, vice president of product innovation at Allianz. While those distributors are beginning to warm to FIAs, they have previously been reluctant to offer products that have surrender charge periods longer than seven years. The Signature 7, as its name implies, has a seven-year decreasing surrender charge period.
“As we talked to those broker-dealers and those advisors, we came away with this strategy of designing products with these shorter surrender periods to expand the footprint of where these products can be distributed,” Gray said in an interview.
According to a company release, Signature 7 is available exclusively to FMOs, broker-dealers and financial professionals aligned with the Allianz Preferred platform. The FIA can be sold in 41 states.
At its core, the Signature 7 is an accumulation vehicle, geared toward consumers nearing retirement with a preference for a more conservative savings option, Gray emphasized. “It’s for someone who is interested in safe accumulation and gun shy of the 2008-09 volatility,” Gray says. “He is saving for retirement but doesn’t have as many years to make up a loss if there is another market shock. It’s for the consumer who has money on the sidelines in cash or CDs that is looking for a bit more return than you might get out of those other safe money alternatives.”
With the Signature 7, policyholders can allocate to the S&P 500 Index, the Russell 2000 Index and the Barclays U.S. Dynamic Balance index for their indexed interest credit.
According to Gray, the Signature 7 offers some “unique” accumulation features that boost the upside potential of the contract, including a monthly sum crediting strategy and a spread of 1.7 percent on the Barclays index. In the latter method, there is no cap on the upside, but 1.7 percent is deducted from any positive return. “So any return above 1.7 percent will be credited to the policy on anniversary in this index,” Gray explained.
This new product is designed to complement Allianz’s recently launched Core Income 7 annuity, which is focused more on income generation than accumulation, Gray noted. With the Signature 7 annuity, a policyholder must annuitize to receive lifetime income.
MasterDex 10 Plus discontinued
Allianz also confirmed that it is discontinuing the sale of its MasterDex 10 Plus annuity as of Jan. 8, 2014.
Gray attributed that move to poor sales. In recent weeks, the product had accounted for less than 2 percent of new sales. “We regularly look at our portfolio and at all the different product choices,” he said. “MasterDex 10 Plus was one that had really dropped off in sales. These products do take resources and efforts to maintain, so we made the decision to discontinue. We have a rather broad portfolio of products and we’ll be looking to sunset other products next year.”
The MasterDex 10 Plus was a latter iteration of the MasterDex 10 annuity that was sold in the controversial Glenn Neasham case. The MasterDex 10 annuity was discontinued in 2011, Gray said.