Understanding variable annuities

Transcription

1 Allianz Life Insurance Company of North America Understanding variable annuities Discover how you can insure a portion of your retirement assets. USA-1517 Page 1 of 20

2 Solutions for RETIREMENT REALITIES Planning for the knowns and unknowns of retirement Now more than ever, the key to creating the retirement lifestyle you want is a strategy that takes into account not just what we know about retirement in the future but what we don t know. Retirement knowns Retirements are lasting longer due to increased life expectancies Retirement will cost more due to inflation Managing your tax burden will be more important than ever Retirement unknowns The long-term solvency of Social Security and whether that will result in a reduction of current benefit levels Future inflation and tax rates Future market volatility and its effect on retirement savings So many uncertainties. But there is a company you can turn to for help in creating a level of certainty in the retirement years ahead. Allianz Life Insurance Company of North America (Allianz) offers solutions to help create and maintain the retirement lifestyle you want. One option is a variable annuity, which is designed to help provide income in retirement. For more complete information about Allianz variable annuities and variable investment options, call your financial professional or Allianz Life Financial Services, LLC, member FINRA, at for a prospectus. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about the variable annuity and variable investment options, which you should carefully consider. Please read the prospectuses thoroughly before sending money. This brochure is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Allianz Life Insurance Company of North America, its affiliated companies, and their representatives and employees do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney. All annuity contract and rider guarantees, or annuity payout rates, are backed by the claims-paying ability of the issuing insurance company. They are not backed by the broker/dealer from which this annuity is purchased, by the insurance agency from which this annuity is purchased, or any affiliates of those entities, and none makes any representations or guarantees regarding the claims-paying ability of Allianz Life Insurance Company of North America. Guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions. Product and feature availability may vary by state and broker/dealer. Page 2 of 20

3 Variable annuity basics A variable annuity may help you reach your long-term financial goals by insuring a portion of your retirement income. How a variable annuity works Annuities are designed to HELP PROVIDE INCOME IN RETIREMENT. A variable annuity is simply a contract between you and an insurance company. As the contract owner, you give money, known as the purchase payment, to the insurance company. In exchange for your money, the insurance company promises you regular income payments. Variable annuities can offer you a level of certainty in the retirement years ahead. Some variable annuities have increasing income potential (available through optional riders which may come at an additional cost) to help you address the rising cost of living. Most variable annuities have two phases: accumulation, and distribution. Today s variable annuities can help you save for retirement, provide income for life, and help you pass on a death benefit to your loved ones. Phase one: Accumulation The accumulation phase begins when you invest in a variable annuity. Most variable annuities give you a wide variety of investment options to allocate your money in, which offer you opportunities for tax-deferred growth 1 through market participation. Phase two: Distribution A variable annuity s distribution phase begins when you start receiving income. Variable annuities offer a variety of ways to receive income payments, depending on your needs. You can take income payments in the form of scheduled lifetime annuitization payments. In addition, many variable annuities allow you to take income in the form of withdrawals as an alternative to annuitization payments, including options for guaranteed lifetime income that may be available for an additional cost, either as a built-in benefit or through an optional rider. Keep in mind that the tax treatment of your annuity s distributions may vary, depending on how you choose to receive income. Variable annuities are subject to investment risks, including loss of principal. Investment returns and principal value will fluctuate with market conditions. Because of this, in the future your contract may be worth more or less than your original purchase payments. Variable annuities are long-term investments that help meet retirement and other long-range goals. You shouldn t consider a variable annuity to meet short-term goals. 1 Purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity s features other than tax deferral. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan. 1 Page 3 of 20

4 Understanding variable annuities Who s who in a variable annuity INSURANCE COMPANY VARIABLE ANNUITY OWNER AND OR ANNUITANT BENEFICIARY A DEATH BENEFIT CAN BE PAID to your beneficiary without probate. Insurance company This is the company that issues the annuity contract. The insurance company is responsible for backing the annuity s guarantees. Contract owner/annuitant These usually are the same person, but they can be different, depending on the type of ownership. The owner makes decisions about the annuity, such as how to invest the money, whether to select any optional benefits, and who the beneficiaries are. The annuitant is the person whose life expectancy is used to calculate annuity payments. Beneficiary The beneficiary is the person who receives the annuity death benefit. Naming one or more beneficiaries is important, because if the estate is the beneficiary, the money in your annuity could be subject to probate. 2 Page 4 of 20

5 Understanding the benefits A variable annuity offers a unique combination of benefits that can help you achieve your long-term goals. Variable annuities offer market growth potential, and may offer optional benefits to help protect your retirement assets and income. Variable annuities also offer tax deferral of the gains for nonqualified contracts, when the contract is owned by an individual. 1 Let s take a closer look at the three key benefits of variable annuities: tax deferral, market growth potential, and protection benefits. Tax deferral TAX DEFERRAL MARKET GROWTH POTENTIAL Enjoy potential GROWTH through market participation. Under current federal income tax law, any growth in your nonqualified variable annuity contract value is tax-deferred, when the contract is owned by an individual. When you begin receiving income from your contract, you pay ordinary income taxes only on your gains, not your purchase payments. 2 Market growth potential A variable annuity offers potential growth through market participation. You can diversify your portfolio by choosing from a range of professionally managed investment options in a variety of asset classes. Keep in mind, however, that diversification doesn t guarantee a profit or protect against loss. Protection benefits PROTECTION BENEFITS Variable annuities offer optional benefits and riders often available at an additional cost that can help you in several ways: Income benefits: help protect and potentially grow income that s guaranteed for life Accumulation benefits: help protect assets from market downturns Death benefits: may help provide for loved ones after you re gone 1 Purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity s features other than tax deferral. Other benefits of using an annuity to fund a qualified plan or an IRA include lifetime income options and guaranteed death benefit payout options. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan. 2 Withdrawals will reduce the contract value and the value of any protection benefits. Additional withdrawals taken within the contract withdrawal schedule will be subject to a withdrawal charge. Withdrawals taken prior to age 59½ may be subject to a 10% federal additional tax. 3 Page 5 of 20

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7 { Tax deferral A nonqualified variable annuity offers tax advantages not always found in other savings vehicles. Nonqualified variable annuities owned by individuals offer tax-deferred growth of the gains, which compounded over time can help increase your retirement savings and income potential. When you buy a nonqualified variable annuity with after-tax dollars, you will pay ordinary income taxes only on your earnings, and only when you start withdrawing money or receiving income from your annuity. How tax deferral can help Tax deferral can be an effective part of your investment strategy. For example, this hypothetical chart shows how a $100,000 initial purchase payment with after-tax dollars, compounded at 6% annually, would grow tax-deferred. Twenty years later, after taxes are paid on the lump-sum distribution, the amount would be greater than the amount accumulated in a taxable investment after 20 years. And while it s true that traditional IRAs and 401(k)s also offer tax-deferred growth, nonqualified annuities don t have any government-imposed contribution limits. This can make nonqualified annuities a good choice if you want to save more than IRAs and 401(k)s allow while benefiting from tax-deferred growth potential. $300,000 $200,000 $100,000 $320,714 PRE-TAX $247,878 AFTER TAX 13% more $219,957 Purchasing an annuity within a retirement plan that already provides tax deferral offers no additional tax benefit. So use an annuity to fund a qualified plan based upon features other than tax deferral, such as lifetime income or guaranteed death benefit payout options. Any tax-deferred growth, which can compound over time, may increase the amount of savings and income your variable annuity generates for your retirement. $0 TAX-DEFERRED INVESTMENTS TAXABLE INVESTMENTS Assumes a 33% ordinary income tax assessed yearly on taxable investments and at period end on tax-deferred investments. Actual tax rates and tax treatment of earnings may vary from the illustration for different taxpayers and assets (e.g., capital gains and qualified dividend income, which may impact comparative results). Actual performance of your investment will also vary. Hypothetical returns are not guaranteed and do not represent performance of any particular investment. If a withdrawal or distribution is taken, the tax-deferred investment would be reduced by income taxes on any gains, and if taken prior to age 59½ a 10% federal additional tax may apply. This example does not reflect the deduction of mortality and expense risk charges or investment option expenses associated with a variable annuity. It does not take into consideration the impact of withdrawals to pay your financial professional. Had they been reflected, the results for the tax-deferred option would be lower. Lower maximum tax rates on capital gains and dividends would make the investment return for the taxable investment more favorable, thereby reducing the difference in performance between the tax-deferred and taxable investment shown. Consider your personal investment horizon, risk tolerance, and income tax brackets, both current and anticipated, when making an investment decision. 5 Page 7 of 20

8 Understanding variable annuities Market growth potential A variable annuity offers potential growth through market participation. MARKET GROWTH POTENTIAL is important when you consider you will have to save for a retirement that could last 30 years or more. Another benefit of a variable annuity is the opportunity to participate in the market. You can choose from a variety of professionally managed investment options, across multiple asset class categories. This allows you to diversify your portfolio based on your personal risk tolerance and your longterm financial goals. Keep in mind, however, that having a diverse portfolio doesn t guarantee a profit or protect against loss. Ibbotson SBBI : Stocks, Bonds, Bills, and Inflation $100,000 $10,000 1, Compound annual return Small stocks 12.2% Large stocks 10.1 Government bonds 5.7 Treasury bills 3.5 Inflation 2.9 $27,419 $5,317 $135 $21 $ Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. 5/1/ An 89-year examination of past capital market returns provides historical insight into the performance characteristics of various asset classes. This graph illustrates the hypothetical growth of inflation and a $1 investment in four traditional asset classes over the time period January 1, 1926, through December 31, Large and small stocks have provided the highest returns and largest increase in wealth over the past 89 years. As illustrated in the image, fixed-income investments provided only a fraction of the growth provided by stocks. However, the higher returns achieved by stocks are associated with much greater risk, which can be identified by the volatility or fluctuation of the graph lines. Government bonds and Treasury bills are guaranteed by the full faith and credit of the U.S. government as to the timely payment of principal and interest, while stocks are not guaranteed and have been more volatile than the other asset classes. Furthermore, small stocks are more volatile than large stocks, are subject to significant price fluctuations and business risks, and are thinly traded. About the data: Small stocks in this example are represented by the Ibbotson Small Company Stock Index. Large stocks are represented by the Standard & Poor s 90 Index from 1926 through February 1957 and the S&P 500 Index thereafter, which is an unmanaged group of securities and considered to be representative of the U.S. stock market in general. Government bonds are represented by the 20-year U.S. government bond, Treasury bills by the 30-day U.S. Treasury bill, and inflation by the Consumer Price Index. Underlying data is from the Stocks, Bonds, Bills, and Inflation (SBBI ) Yearbook, by Roger G. Ibbotson and Rex Sinquefield, updated annually. An investment cannot be made directly in an index. Standard & Poor s 500 Index (S&P 500 ) is comprised of 500 stocks representing major U.S. industrial sectors. The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy. S&P is a registered trademark of Standard & Poor s Financial Services LLC ( S&P ) and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ). These trademarks have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. S&P and S&P 500 are trademarks of S&P and Dow Jones, Dow Jones Industrial Average SM, DJIA, and The Dow are trademarks of Dow Jones. These trademarks have been sublicensed for certain purposes by Allianz Life Insurance Company of North America ( Allianz ). The S&P 500 and Dow Jones Industrial Average (DJIA) are products of S&P Dow Jones Indices LLC and/or its affiliates and have been licensed for use by Allianz. Allianz products are not sponsored, endorsed, sold, or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates make any representation regarding the advisability of investing in such product. Page 8 of 20

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10 Understanding variable annuities Understanding variable annuities 68 Page 10 of 20

11 Protection benefits A variable annuity offers a range of retirement solutions. Variable annuities offer a third important advantage: optional guarantees and protection benefits. These optional guarantees and benefits can help protect your investment, your retirement income, and/or your beneficiaries. Because they allow you to transfer a portion of your investment portfolio risk to the insurance company, these optional benefits carry an additional cost that varies by product and company. We ll look at these benefits in more detail in a moment. But first, please review the chart below. When you consider what else you insure, doesn t it make sense to insure a part of your portfolio, too? An annuity s optional benefits can help insure your investment, your retirement income, and/or your beneficiaries. ANNUAL FINANCIAL RISKS PORTION OF RISK TRANSFERRED AWAY 0.3% CHANCE OF HOUSE FIRE 1 HOMEOWNERS INSURANCE 0.9% CHANCE OF DEATH 2 LIFE INSURANCE 2.3% CHANCE OF CAR ACCIDENT 3 AUTO INSURANCE 26% CHANCE OF MARKET LOSS 4 VA VARIABLE ANNUITY PROTECTION BENEFITS Variable annuity optional living and death benefit riders help provide protection and can be purchased for an additional charge. 1 Percentage is calculated from National Fire Protection Association Fire Analysis and Research Division, Fire loss in the United States during Michael J. Karter, Jr., September and Annual Estimates of Housing Units for the United States, Regions, Divisions, States, and Counties: April 1, 2010 to July 1, 2013, U.S. Census Bureau, Population Division, Release Date: May Accessed October CSO Table, Accessed October Percentage is calculated from the U.S. Department of Transportation National Highway Traffic Safety Administration, 2012 Motor Vehicle Crashes: Overview, Traffic Safety Facts, November 2013 and Passenger Vehicles, Traffic Safety Facts, 2012 data, September 2014, Accessed October Percentage is based on number of years (13) the S&P 500 was down during the 50-year period between January 1, 1963 December 31, Jeffrey A. Hirsch and Yale Hirsch, Stock Trader s Almanac 2014, p The data provided for the table came from sources believed to be reliable and the most recent available. Product and feature availability may vary by state and broker/dealer. 9 Page 11 of 20

12 Understanding variable annuities Protection benefits (continued) INCOME BENEFITS A variable annuity s optional income benefits may help protect your long-term retirement assets. Optional income benefits are available at an additional cost. What is an income benefit? An income benefit offers guarantees that may help grow and protect income. You may elect a single payment option or a joint payment option, which will provide payments for the entire lifetime of you and/or your spouse. After income starts: Once you begin receiving income payments, you ll continue to receive those payments for as long as you live (or, if you elected joint payments, for as long as you and your spouse live). The payments can continue even if your contract value falls to zero. When you start receiving income, your payments are calculated as a percentage of the guaranteed benefit base, and may also be based on your age or current interest rates. Generally, the benefit base is the greatest of your contract value, locked-in gains, or guaranteed increase percentage. Optional income benefits may help PROTECT YOUR ASSETS. Why choose an income benefit? You may want to consider an income benefit if you are concerned about how market volatility could affect your retirement income goals, or if you have concerns about outliving your income. Before income starts: When you add an income benefit to your contract, you ll begin creating the foundation upon which your retirement income is based. We call this foundation your income base or benefit base. If you don t start receiving income payments right away, the benefit base may lock in any periodic investment gains or provide a guaranteed increase percentage. Some variable annuities even reset the guaranteed increases if the contract value is higher. This allows the benefit base to continue to grow from there. In some cases, the income benefit may even provide an opportunity for payment increases. Sometimes called a guaranteed lifetime withdrawal benefit (GLWB), this optional benefit typically restricts the selection of investment options, may be subject to periodic asset rebalancing, and carries an additional charge that could increase over time. It is important to note that excess withdrawals (a withdrawal that is greater than your maximum available income payment) may be subject to a withdrawal charge and may cause future payments to decrease or stop, and the income benefit to end. Excess withdrawals will reduce the contract value and the value of any protection benefits. The taxable portion of all withdrawals is taxed as ordinary income, and if taken prior to age 59½, a 10% federal additional tax may apply. Withdrawals, for tax purposes, are generally deemed to come first from any gains. 10 Page 12 of 20

13 Income benefit features May provide a guaranteed increase on the purchase payments (adjusted for withdrawals) to help build a protected foundation for income May provide guaranteed lifetime income for as long as you and/or your spouse live, while maintaining access to your contract value for a period of time, subject to certain rules May provide potential income payment increases to help address the rising cost of living In the hypothetical chart below, the initial purchase payment is the total amount you have invested in the variable annuity. The contract value is the value of your investment options. Based on the investments you choose, your contract value may vary every day and can be higher or lower than the purchase payment you invested. The benefit base is the dollar amount on which your income payments are based. Initially, the benefit base is the same as the initial purchase payment you invest but it may increase over time based on investment gain lock-ins or a guaranteed increase percentage, or decrease if you take withdrawals. How an income benefit could work BEFORE INCOME PAYMENTS START AFTER INCOME PAYMENTS START During accumulation, some benefits provide protection to the benefit base for years. Initial purchase payment DATE WHEN INCOME BEGINS During distribution, some benefits offer the opportunity to receive a payment increase without requiring the contract value to exceed the benefit base. Some benefits require you to take the maximum payment in order to receive this increase. YEARS This hypothetical example is for illustrative purposes only, is no guarantee of return or future performance, and does not depict the actual performance of a specific variable annuity or its investment options. The benefit base is the amount on which your income payments are based. Initially, it is the same as your purchase payments, but may increase over time based on optional guarantees, and decreases if you take withdrawals. Benefit base before reset Benefit base after reset Benefit base Contract value Payment based on the benefit base or contract value, whichever is greater Gap between contract value and benefit base 11 Page 13 of 20

14 Understanding variable annuities Protection benefits (continued) CUSTOMIZE your annuity with optional benefits. ACCUMULATION BENEFITS A variable annuity may offer optional accumulation benefits at an additional cost that can help protect your assets from down markets. What is an accumulation benefit? Simply put, an accumulation benefit guarantees that you ll receive at least the total purchase payments you invested at the end of a specified period, adjusted for withdrawals, regardless of your contract value. It may also provide that you receive a percentage of locked-in investment gains. Why choose an accumulation benefit? You may want to consider an accumulation benefit if you want to protect your purchase payments from market losses. Generally, with this benefit, at the end of a specified accumulation period (typically 10 years), if your contract value is less than the guaranteed value (which may vary according to the annuity you purchase) the difference is credited to your contract value. In other words, the insurance company trues up your contract value to the guaranteed value. That amount is then available to you as a lump sum. Sometimes referred to as a guaranteed minimum accumulation benefit (GMAB), this benefit simply guarantees that you will receive back at least what you invested. This optional benefit typically restricts selection of investment options, may be subject to asset rebalancing, and carries an additional charge that may increase over time if market conditions warrant. Accumulation benefit features Offers market participation with protection from down markets Guarantees at least to be purchase payments, adjusted for withdrawals, at end of specified accumulation period May also lock in a percentage of annual contract gains for a specific date in the future How an accumulation benefit could work Locked-in guaranteed value Contract value True up Locked-in guaranteed value Locked-in guaranteed value HELP PROTECT your purchase payments while locking in a guaranteed value. INITIAL PURCHASE PAYMENT Initial purchase payment Years Initial target value date This hypothetical example is for illustrative purposes only, is no guarantee of return or future performance, and does not depict the actual performance of a specific variable annuity or its investment options. If the contract value falls below initial purchase payment or locked-in annual gain, the accumulation benefit will bring the contract value back up at the end of the specified accumulation period (typically 10 years). 12 Page 14 of 20

15 DEATH BENEFITS In addition to helping you save for and enjoy your retirement, a variable annuity also offers death benefits that can help you provide a legacy for your loved ones. Why choose a death benefit? You may want to consider a death benefit if you would like to make sure that your beneficiaries receive the most from your annuity. Death benefit features Provides a means to pass assets to a designated beneficiary Offers options to meet individual death benefit needs Generally avoids probate costs What is a traditional death benefit? A traditional death benefit guarantees that before you start receiving income through annuitization your beneficiaries will receive the greater of your total purchase payments adjusted for withdrawals or the current contract value. A traditional death benefit is usually provided without an additional charge. What is an enhanced death benefit? An enhanced death benefit guarantees that, prior to annuitization, your beneficiary will typically receive your total purchase payments adjusted for withdrawals, the current contract value, or some other value, such as the highest contract anniversary value adjusted for withdrawals, whichever is greatest. Enhanced death benefits typically carry an additional charge and may require that you also select a lifetime income or accumulation benefit. What about probate? Death benefits from an annuity generally avoid probate costs by passing your assets directly to your individual beneficiaries. 13 Page 15 of 20

16 Understanding variable annuities Additional information to consider Flexible access to your money Variable annuities often have options for accessing your money if you need it before you start taking income in retirement. For example, many allow you to withdraw up to 10% of your purchase payments annually without a withdrawal charge. (A withdrawal charge can be applied when you take out money during the withdrawal charge period usually the first four to 10 years after a purchase payment is received.) And, some waive the withdrawal charge if you need your money to cover unexpected costs due to nursing home stays, terminal illness, or disability. Keep in mind that withdrawals reduce your contract value and the guaranteed value of any lifetime income, accumulation, or death benefits. Gains on nonqualified annuities, and generally the full withdrawal amount from qualified annuities, are also subject to ordinary income tax and, if taken prior to age 59½, a 10% federal additional tax. Bonuses Some variable annuities offer you a percentage of your purchase payments as a bonus. For example, a 6% bonus on a $50,000 initial purchase payment would credit $3,000 to your contract. It s one way to give your retirement savings a head start. Keep in mind that bonus variable annuities may carry higher fees and charges than those without the bonus feature, and that the bonus is usually subject to a vesting schedule. A vesting schedule is simply a period of time you must wait to receive the full amount of the bonus. Bonus amounts are typically excluded from any guaranteed value based on purchase payments. Understanding fees A variable annuity carries various charges, expenses, and fees that may reduce your investment return. These might include: a mortality and expense risk (M&E) charge, or other fee assessed against the investment option s net asset value. The insurance company charges this to provide the insurance benefits within the annuity. an annual contract maintenance charge for expenses associated with the administration and maintenance of the contract. operating expenses of the investment options. These expenses include professional money management fees, distribution or 12b-1 fees, and other expenses before fee waivers and expense reimbursements. withdrawal charges, which are generally assessed if you withdraw your money before the time specified in the contract. rider charges for optional benefit or account charges, which are typically based on the guaranteed values. 14 Page 16 of 20

17 Financial strength The guarantees provided by an annuity are backed solely by the insurance company that issues the annuity. That s why it s important to consider the financial strength and stability of the insurance company issuing the annuity. Ask about their: Ratings independent agencies opinions of a company s financial strength and ability to meet its ongoing insurance policy and contract obligations. Risk management capabilities a company s track record of successfully hedging against potentially extreme market events. Investment management philosophy a company s commitment to stability and steady, reliable, long-term performance. 15 Page 17 of 20

18 Understanding variable annuities Is a variable annuity right for you? The answer is, maybe. Only you know your goals for retirement, so only you can determine your income needs. A variable annuity isn t an appropriate solution for everyone, and you shouldn t buy one unless it s appropriate for your situation. You may want to consider a variable annuity if the following benefits are important to you: Tax deferral to help you reach your retirement goals 1 Market growth potential through investment options Protection benefits (available with optional riders at an additional cost) that can help protect your retirement assets and income Purchasing an annuity is an important decision, and one you should only make after consulting with your financial professional and tax advisor. 1 Purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit. An annuity should be used to fund a qualified plan based upon the annuity s features other than tax deferral. All annuity features, risks, limitations, and costs should be considered prior to purchasing an annuity within a tax-qualified retirement plan. 16 Page 18 of 20

19 For more information on variable annuities, talk to your financial professional and visit Page 19 of 20

20 True to our promises so you can be true to yours. A leading provider of annuities and life insurance, Allianz Life Insurance Company of North America (Allianz) bases each decision on a philosophy of being true: True to our strength as an important part of a leading global financial organization. True to our passion for making wise investment decisions. And true to the people we serve, each and every day. Through a line of innovative products and a network of trusted financial professionals, and with over 2.6 million contracts issued, Allianz helps people as they seek to achieve their financial and retirement goals. Founded in 1896, Allianz is proud to play a vital role in the success of our global parent, Allianz SE, one of the world s largest financial services companies. While we pride ourselves on our financial strength, we re made of much more than our balance sheet. We believe in making a difference with our clients by being true to our commitments and keeping our promises. People rely on Allianz today and count on us for tomorrow when they need us most. Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America and do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions. Not FDIC insured May lose value No bank or credit union guarantee Not a deposit Not insured by any federal government agency or NCUA/NCUSIF Products are issued by Allianz Life Insurance Company of North America and distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN (R-6/2015) Page 20 of 20