Allianz Retirement Pro Variable Annuity

Transcription

1 Allianz Life Insurance Company of North America Allianz Retirement Pro Variable Annuity Where lifetime income and flexible investing meet. RET-001 Page 1 of 24

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 (longer retirements, rising costs) but what we don t know as well (future inflation and tax rates, market volatility). Solutions for increasing income potential, asset protection, and tax control 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. When it comes to retirement solutions, the one thing to know about Allianz Life Insurance Company of North America (Allianz) is that we re more than one thing. We have a portfolio of annuities which offer different solutions that can help you with many retirement concerns, including: Increasing income potential (available through optional riders at an additional cost) to help you keep up with inflation Asset protection to help preserve your retirement savings from market volatility Tax control to help manage your assets with more efficiency and flexibility using several distribution options of your choice The Allianz Retirement Pro Variable Annuity and the optional Income Advantage Account can help provide the tax control and increasing income potential you may be looking for in retirement. This brochure is designed to provide you with an overview of Allianz Retirement Pro, a deferred variable annuity. This material must be preceded or accompanied by a current prospectus for Allianz Retirement Pro Variable Annuity. Call your financial professional or Allianz Life Financial Services, LLC, member FINRA, at to obtain a prospectus about Allianz variable investment options. 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. Income Advantage Account (09.10) 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. Products are issued by Allianz Life Insurance Company of North America and distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA. 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 Product and feature availability may vary by state and broker/dealer. Page 2 of 24

3 Allianz Retirement Pro Variable Annuity a flexible, cost-effective way to help build and protect your retirement assets. Retirement Pro overview Allianz Retirement Pro is a retirement strategy designed to help those working with a financial professional on a solution to build and protect a source of lifetime income. With Allianz Retirement Pro, you can take control of your financial future, including: A level of certainty for your retirement strategy A portfolio that s aligned with your goals Tax-efficient management of your assets It s your retirement. Make it the one you want, with the help of Allianz. A variable annuity its role in your retirement strategy What s going to help you accumulate enough assets to retire the way you want and have enough income to maintain your lifestyle in retirement? Part of the answer might be a variable annuity. Tax deferral Market participation A variable annuity is essentially a contract between you and an insurance company that may help you reach your long-term financial goals. Variable annuities offer market participation and tax-deferred growth potential along with protection benefits that can provide certain lifetime income and death benefit guarantees. Variable annuities are subject to investment risk, including possible loss of principal. Investment returns and principal will fluctuate with market conditions so that units, upon distribution, may be worth more or less than the original cost. Protection benefits The advantages of a variable annuity Part of your overall, professionally managed portfolio Transparent, straightforward fees Relationship-driven, unbiased financial recommendation Shared objectives with mutual interest in success 1 Page 3 of 24

4 Retirement Pro overview Take control of your financial future. Reaching your long-term financial goals requires taking a proactive approach to saving for your retirement. With Allianz Retirement Pro, you and your advisor benefit from the flexibility to design an investment strategy to fit your needs. Allianz Retirement Pro offers: A versatile investment platform Tax-deferred growth potential Flexible protection Access to your money Allianz Retirement Pro at a glance Allocate your purchase payments to either account or both Base Account Income Advantage Account Customize a strategy to fit your needs When you purchase your Allianz Retirement Pro contract, you can allocate and transfer your money between two accounts depending on your investment objective: The Base Account is more growth-oriented with a wide range of investment options from virtually every asset class. Annual fee: 0.30% 1 The Income Advantage Account is geared more toward protection and provides guaranteed lifetime income through withdrawals as well as a death benefit guarantee. Investment focus Performance Market growth opportunity Choose from approximately 80 investment options Tax deferral Yes Protection benefits None Investment focus Protection Market growth opportunity Choose from approximately 20 investment options Tax deferral Yes Protection benefits Income and death benefit guarantees Annual fee: 1.00% single/1.15% joint 2 The Income Advantage Account fee is subject to change (min: 0.25%/max: 1.75%), but will never increase/decrease by more than 0.25% in any 12-month period. Access to your money Yes Access to your money Yes Transfer money between the accounts prior to taking income, or access money within the accounts at any time. The Base Account is not available if you purchase a qualified contract through certain broker/dealers. Ask your financial professional for more details. 1 Calculated as a percentage of the net asset value of the investment options in the Base Account. 2 2 Calculated as a percentage of the Benefit Base. Page 4 of 24

5 A versatile investment platform Allianz Retirement Pro offers a comprehensive selection of professionally managed investment options covering a variety of asset classes and investment styles. You can position your assets for just about any investment objective or risk tolerance level with approximately 80 investment options to choose from in the Base Account. Or you can position your assets for income with the guarantees provided in the Income Advantage Account. The Income Advantage Account may help protect from Market risk Longevity risk Inflation risk Liquidity risk with Quarterly lock-ins Lifetime income guarantees Treasury-based payments with opportunities for increases Continued access to your account TAX CONTROL of your assets helps reduce uncertainty in retirement. Tax-deferred growth potential Whether your money is allocated to the Base Account, the Income Advantage Account (or both), your assets will grow tax-deferred. Having this tax control may help you manage your assets more efficiently. When you contribute after-tax dollars to your Allianz Retirement Pro contract, you will only pay ordinary income taxes on your earnings when you withdraw money from the contract. Any tax-deferred growth, which can compound over time, may increase the amount of savings and income your contract generates for your retirement. Please note that purchasing an annuity within a retirement plan that already 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 features other than tax deferral. All annuity features, risks, limitations, and costs should be considered before purchasing an annuity within a tax-qualified plan. Flexible protection Life presents financial risks, including loss of property and loss of life. While some people assume the risk and employ strategies to help manage it, many choose to transfer a portion of the risk to an insurance company. With Allianz Retirement Pro, you can transfer risk from your portfolio by allocating money to your Income Advantage Account, which offers both income and death benefit guarantees. You ll have the flexibility to add purchase payments or transfer money to your Income Advantage Account at any point prior to taking Income Advantage Payments (subject to age and contribution limits). If your plans should ever change, you ll have the ability to transfer (or add) money to your Base Account at any time. Access to your money While Allianz Retirement Pro is designed for your long-term retirement goals, it has no withdrawal charges, which means you have immediate access to the money in both your Base and Income Advantage Accounts should an unexpected need arise. Because Income Advantage Payments are a form of withdrawal (not annuitization), you ll still have continued access to your Income Advantage Account once your lifetime payments begin. Please keep in mind that any withdrawal or payment from your contract may be subject to ordinary income tax and, if taken before age 59½, a 10% federal additional tax. Transferring or withdrawing money from your Income Advantage Account will reduce your guaranteed values (including lifetime income) and you will have incurred higher fees without receiving the benefits of the account. Please refer to page 10 for full details. 3 Page 5 of 24

6 Add a level of certainty to your retirement strategy. As you transition through life s financial turning points from building assets, to using them to fund a long-term retirement, to leaving a legacy for your loved ones how can you be certain you ll meet all your goals? A protected foundation for income Your Benefit Base is the protected value that is used to calculate your annual payments, as well as the fee assessed on your Income Advantage Account. Before you start taking income, your Benefit Base will always equal your Quarterly Anniversary Value. When you re ready to start lifetime payments, your Benefit Base will equal the greater of: Your Quarterly Anniversary Value The Income Advantage Account provides income and death benefit guarantees that can help you: Build and protect a foundation for income with a quarterly lock-in feature Leave a financial legacy for the ones who matter most. Your Income Advantage Account Value Establishing your Quarterly Anniversary Value The Quarterly Anniversary Value is initially equal to the purchase payments you allocate to the Income Advantage Account. On each quarterly contract anniversary (before the older covered person reaches age 91), if your Income Advantage Account Value exceeds the value of your previously locked-in Quarterly Anniversary Value, a new Quarterly Anniversary Value will be established. Prior to taking income, your Benefit Base will also increase to equal your new Quarterly Anniversary Value. Please keep in mind that if the Income Advantage Account is higher between quarterly anniversary dates, it will not be locked in. Leaving your financial legacy As important as it is to have an income strategy in place to help you retire the way you want, it s also important to consider what you may leave to your loved ones. The Income Advantage Death Benefit guarantees that upon your death, your beneficiaries will receive the greater of: Your Quarterly Anniversary Value Your current Income Advantage Account Value (less final Income Advantage Account fee) 4 Page 6 of 24

7 INCREASING INCOME POTENTIAL to help keep up with rising retirement expenses A lifetime of payments, with the opportunity for increases The Income Advantage Account provides guaranteed lifetime income through withdrawals, with continued access to your account. You can choose between: Single Income Advantage Payments providing guaranteed payments for your entire life, or Joint Income Advantage Payments providing guaranteed payments for the entire lifetimes of you and your spouse. You can start Income Advantage Payments at any time as long as the younger covered person is at least age 65, and the older covered person is younger than age 91. Determining your Income Advantage Payments Your initial annual maximum Income Advantage Payment is determined by your Benefit Base and a payment percentage based on the current 10-year U.S. Constant Maturity Treasury rate. When you elect to begin Income Advantage Payments (Benefit Election Date), your payment percentage will be based on the Treasury rate from the last business day of the previous week (at the close of business). Once your initial annual maximum Income Advantage Payment is established, it will never decrease due to negative investment performance or a lower Treasury rate. If the 10-year U.S. Constant Maturity Treasury rate is Your initial annual maximum payment will be 3.49% or less 4% of your Benefit Base 3.50% to 4.99% 5% of your Benefit Base 5.00% to 6.49% 6% of your Benefit Base 6.50% + 7% of your Benefit Base Two opportunities for payment increases While lifetime income is important, lifestylesustaining income is essential. To help keep up with growing retirement expenses your income payments need the opportunity to increase. On each Benefit Anniversary prior to the older covered person reaching age 91 (and while the Income Advantage Account Value is positive), your annual maximum Income Advantage Payment has the potential to increase if the following occurs: Income Advantage Account Value increase If on your benefit anniversary, your Income Advantage Account Value is greater than your Benefit Base, your annual maximum Income Advantage Payment will increase. 10-year U.S. Constant Maturity Treasury rate increase If on your benefit anniversary, the Treasury rate has increased to a level that results in a higher payment percentage, your annual maximum Income Advantage Payment will increase if this higher percentage multiplied by your current Income Advantage Account Value is greater than your current maximum payment. Income Advantage Account Each time your annual maximum Income Advantage Payment increases, your Benefit Base automatically adjusts to equal your current Income Advantage Account Value, which will also impact the amount deducted for your Income Advantage Account fee. 5 Page 7 of 24

8 Example: Your Income Advantage Account in the accumulation and income phases This hypothetical example shows how your Income Advantage Account works before and after you begin taking Income Advantage Payments, but it does not show the values associated with your Income Advantage Death Benefit. It does not predict or project the actual performance of the Allianz Retirement Pro Variable Annuity, or its investment options. This example assumes no change in payment percentage due to an increased 10-year U.S. Constant Maturity Treasury rate. Income Advantage Account On the day your contract is issued, your Quarterly Anniversary Value and Benefit Base are equal to the purchase payments you allocate to your Income Advantage Account. Once established, these values are protected from negative investment performance. On each quarterly contract anniversary before age 91, if your Income Advantage Account Value exceeds the value of your previously locked-in Quarterly Anniversary Value, a new Quarterly Anniversary Value will be established. Prior to starting income, your Benefit Base also increases as your Quarterly Anniversary Value increases. On your Benefit Election Date, your Benefit Base is equal to the greater of your Quarterly Anniversary Value or your Income Advantage Account Value. If your Income Advantage Account Value was higher at this point, your Benefit Base would increase to equal this higher amount. Your annual maximum Income Advantage Payment is also determined on your Benefit Election Date. This amount is guaranteed for life, and will not decrease unless an excess withdrawal is taken or money is transferred to the Base Account. A protected foundation for income The combination of market participation, tax-deferred growth potential, and quarterly lock-ins can help you build a protected foundation for income. Income Advantage Account Value Quarterly Anniversary Value Benefit Base A Initial allocation to Income Advantage Account B Adding or transferring money to your Income Advantage Account will also increase your Quarterly Anniversary Value and Benefit Base. Issue date Page 8 of 24

9 Your Income Advantage Account Value has increased, resulting in a higher maximum payment. Your Benefit Base also adjusts to equal your Income Advantage Account Value. Even though your Income Advantage Account Value decreased, your maximum payment and Benefit Base stay the same. As long as you do not take an excess withdrawal, transfer money out of this account, or annuitize the contract, Income Advantage Payments continue for life. You will continue to have an opportunity for payment increases until the older covered person reaches age 91, or until your Income Advantage Account Value is reduced to zero. A lifetime of payments with the opportunity for increases A guaranteed stream of lifetime income, with the opportunity for payment increases, can help you sustain your lifestyle in the years ahead. C Benefit Election Date You also have opportunities for payment increases due to a higher Treasury rate. Turn to the next page for an example. D Income Advantage Payment E Income Advantage Payment Increase F Income Advantage Payment Income Advantage Payment Income Advantage Payment Increase G Payments continue for life Years 7 Page 9 of 24

10 Calculating your annual maximum Income Advantage Payment Once established, your Income Advantage Payments: Are guaranteed for life (unless you take an excess withdrawal, make a transfer, or annuitize the contract) Will never decrease due to negative investment performance, or a lower Treasury rate Have the potential to increase on benefit anniversaries before age 91 If your Benefit Base is Your annual maximum payment will be at 4% at 5% at 6% at 7% $100,000 $4,000 $5,000 $6,000 $7,000 $250,000 $10,000 $12,500 $15,000 $17,500 $500,000 $20,000 $25,000 $30,000 $35,000 $750,000 $30,000 $37,500 $45,000 $52,500 $1,000,000 $40,000 $50,000 $60,000 $70,000 8 Page 10 of 24

11 Example: Payment increase due to a higher Treasury rate These hypothetical examples show how you may receive an increase in your annual maximum Income Advantage Payment due to a higher Treasury rate-based payment percentage under two different market scenarios. They do not predict or project the actual performance of the Allianz Retirement Pro Variable Annuity, its investment options, or the 10-year U.S. Constant Maturity Treasury rate. These examples assume the Income Advantage Account Value and Benefit Base are equal at the time payments begin. With negative returns With positive returns Benefit Election Date Benefit Anniversary Benefit Election Date Benefit Anniversary Income Advantage Account Value $100,000 $90,000 Income Advantage Account Value $100,000 $110,000 Benefit Base $100,000 $90,000 Benefit Base $100,000 $110,000 Treasury rate 4.17% 5.08% Treasury rate 4.17% 5.08% Payment percentage 5% 6% Payment percentage 5% 6% Annual maximum payment $5,000 $5,400 Annual maximum payment $5,000 $6,600 Because the higher payment percentage multiplied by your current Income Advantage Account Value results in a greater payment, you receive an increase. Each time your payment increases, your Benefit Base automatically adjusts to equal your current Income Advantage Account Value. History of the 10-year U.S. Constant Maturity Treasury rate The following table shows the actual highs and lows of the 10-year U.S. Constant Maturity Treasury rate from This information is provided for historical purposes only and is not representative of future rates. High and low 10-year U.S. Constant Maturity Treasury rate by year Year High 5.81% 6.45% 6.79% 5.54% 5.44% 4.61% 4.89% 4.66% 5.25% 5.26% 4.27% 3.98% 4.01% 3.75% 2.39% 3.04% Low 4.16% 4.63% 5.02% 4.22% 3.61% 3.13% 3.70% 3.89% 4.34% 3.83% 2.08% 2.23% 2.41% 1.72% 1.43% 1.66% Source: Federal Reserve 9 Page 11 of 24

12 Important points to consider with your Income Advantage Account. Any withdrawal or payment from your contract may be subject to ordinary income tax and, if taken before age 59½, a 10% federal additional tax. During accumulation, a withdrawal or transfer from your Income Advantage Account will reduce your Quarterly Anniversary Value and Benefit Base by the greater of the percentage of your account value withdrawn/transferred, or by the dollar amount taken. Subsequently, these values will increase by the dollar amount of any additional purchase payments allocated to your Income Advantage Account, or any transfer from the Base Account. Once you begin Income Advantage Payments you can no longer add or transfer money to your Income Advantage Account. If you do not begin Income Advantage Payments during the period they are available, you will have incurred higher fees without receiving the benefit of lifetime Income Advantage Payments, although you will still have the Income Advantage Death Benefit. Transferring money from your Income Advantage Account, or taking an excess withdrawal (a withdrawal that is greater than your annual maximum Income Advantage Payment) will reduce your Benefit Base by the greater of the percentage of your account value transferred/withdrawn, or the dollar amount removed. An excess withdrawal or transfer will also cause future Income Advantage Payments to decrease, or potentially stop. If payments stop, the Income Advantage Account (and Income Advantage Death Benefit) will terminate. Income Advantage Payments, excess withdrawals, and transfers from your Income Advantage Account will reduce your Income Advantage Death Benefit by the greater of the percentage of your account value transferred/withdrawn, or the dollar amount removed. 10 Page 12 of 24

13 Important risk and index disclosures for the following section: * An investment in the fund is neither insured nor guaranteed by FDIC or any other governmental agency. Although the fund seeks to preserve your $1.00 per unit, it is possible to lose money in the fund. 1 Small-cap and mid-cap stocks are more volatile than large-cap or more established companies securities. 2 This investment option seeks to match the performance of the specified market index. Investors cannot invest directly into indexes. 3 The AZL, AGIC, and PIMCO investment options are managed by an affiliate of Allianz Life Insurance Company of North America and Allianz Life Financial Services, LLC. 4 This investment option is subadvised. The subadvisor may have a public mutual fund with an investment objective that is similar to that of this investment option. These are separate portfolios that will have different performance due to differing fees, expenses, relative cash flows, portfolio sizes, and other factors. 5 International investing involves some risks not present with U.S. investments, such as currency fluctuation and political volatility. 6 High-yield securities inherently have a high degree of market risk in addition to credit risk and potential illiquidity. 7 Bond funds are subject to credit risk and inflation risk. They are also subject to interest rate risk. Generally, when interest rates rise, bond prices fall. Bonds with longer maturities tend to be more sensitive to changes in interest rates. 8 Money invested in a specific sector or industry is subject to a higher degree of risk than money that is diversified. 9 The investment option normally invests in commodity-linked derivative instruments backed by a portfolio of inflation-indexed securities and other fixed income instruments. Neither the current market value of inflation-indexed bonds nor the value of shares of a fund that invests in inflation-indexed bonds is guaranteed. Either may fluctuate as they adjust to the rate of inflation. Commoditylinked derivative instruments may be more volatile than traditional securities. They are affected by changes in overall market movements, changes in interest rates, and other factors such as weather, disease, embargoes, and international, economic, and political developments. 10 This investment option invests in derivative instruments such as futures, options, and swap agreements. Derivatives can increase the investment option s share price volatility and could magnify losses. Certain derivative instruments also involve costs that could reduce returns. Certain derivatives may involve risk of default. 11 This investment option is classified as nondiversified within the meaning of the Investment Company Act of However, these investment options are required, pursuant to the Internal Revenue Code of 1986, to meet certain diversification requirements in order to qualify as regulated investment companies for federal income tax purposes. Investment options that are nondiversified are generally subject to greater risk than investment options that are diversified. 12 Manager Allocation Risk: The risk refers to the possibility that the manager could allocate assets in a manner that will cause the funds to underperform other funds with similar investment objectives. The manager may have a potential conflict of interest in allocating assets among and between the permitted underlying funds because the subadvisory fee rate it pays to the subadvisors of the permitted underlying funds is different. 13 Standard & Poor s, S&P, S&P 500, Standard & Poor s 500, 500, Standard & Poor s SmallCap 600, S&P SmallCap 600, and S&P MidCap 400 are trademarks of Standard & Poor s Financial Services LLC and have been licensed for use by the Allianz Variable Insurance Products Trust and Allianz Investment Management LLC. The product is not sponsored, endorsed, sold, or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of purchasing the product. 14 Because certain investment options are not available with certain optional benefits, the performance of these investment options does not reflect the rider charges associated with these benefits. 15 The Russell 1000 Value Index is a market-capitalization weighted index of those firms in the Russell 1000 with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 includes the largest 1,000 firms in the Russell 3000, which represents approximately 98% of the investable U.S. equity markets. 16 The Russell 1000 Growth Index is a market-capitalization weighted index of those firms in the Russell 1000 with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 includes the largest 1,000 firms in the Russell 3000, which represents approximately 98% of the investable U.S. equity markets. 11 Page 13 of 24

14 17 MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. EAFE is a registered service mark of MSCI, Inc. 18 Emerging market securities carry special risks, such as less developed or less efficient trading markets, a lack of company information, and differing auditing and legal standards. The securities markets of emerging market countries can be extremely volatile; performance can also be influenced by political, social, and economic factors affecting companies in emerging market countries. 19 The Portfolio invests in stocks believed to be undervalued, but that may not realize their perceived value for extended periods of time or may never realize their perceived value. The stocks in which the Portfolio invests may respond differently to market and other developments than other types of stocks. 20 Because growth stocks have higher valuations and lower dividend yields than slower-growth or cyclical companies, the share price volatility may be higher. As such, fund prices could decline further in market downturns than non-growth-oriented funds. 21 The value approach carries the risk that the market will not recognize a security s true worth for a long time, or that a stock judged to be undervalued may actually be appropriately priced. As with all equity funds, the fund s share price can fall because of weakness in the broad market, a particular industry, or specific holdings 22 Due to the fund s concentration in health sciences companies, its share price will be more volatile than that of more diversified funds. Further, these firms are often dependent on government funding and regulation and are vulnerable to product liability lawsuits and competition from low-cost generic products. 23 Equity funds are subject generally to market, market sector, market liquidity issuer, and investment style risks, among other factors and to varying degrees 24 Franklin Rising Dividends Fund invests in value securities, which may not increase in price as anticipated or may decline further in value. While smaller and midsize companies may offer substantial opportunities for capital growth, they also involve heightened risks and should be considered speculative. Historically, smaller- and midsize- company securities have been more volatile in price than larger company securities, especially over the short term. These and other risks are detailed in the fund s prospectus. 25 Investments in the utilities sector can be very volatile because of supply and/or demand for services or fuel, financing costs, conservation efforts, the negative impact of regulation, and other factors. 12 Page 14 of 24

15 Design a portfolio that s aligned with your goals. Whether you want to build a source of lifetime income, or simply grow your assets for a specific retirement goal, Allianz offers a wide variety of investment options that let you design a portfolio in line with your long-term investment strategy. How we choose our money managers At Allianz, quality matters. We constantly monitor our investment options and money managers through a process we call Comprehensive Portfolio Management (CPM). With CPM, we evaluate the options and managers based on three criteria: Control: We offer choices in all major asset classes and monitor our money managers to ensure they retain their investment style. Consistency: We only retain those money managers with proven track records of delivering consistent performance. Capacity: We make sure our money managers have the resources and practices to provide diverse investment options. How you select your investment options In order to build a source of reliable retirement assets, it is essential to have a long-term, holistic approach to investing. Your investment advisor offers the financial expertise to help you select investment options aligned with your personal objectives, and then manage allocations based on individual needs and current market conditions. Use this brochure and the professional guidance of your advisor to build a portfolio to help you reach your retirement goals. Investment options 13 Page 15 of 24

16 Investing for performance Investment options When it comes to investing, variety and opportunity are two key components if you are seeking increased growth potential from your retirement assets. The Base Account offers a number of performance-driven asset allocation portfolios, as well an extensive list of asset class options to customize your own portfolio based on your long-term investment objectives. The charts below Customize your portfolio EQUITY FIXED INCOME ALTERNATIVES SECTORS Access to highly regarded asset classes offered in Retirement Pro Large Cap Value Mid Cap Value Small Cap Value Large Cap Core Mid Cap Core Small Cap Core Large Cap Growth Mid Cap Growth Small Cap Growth International Value International Core Global Equity International Growth Intermediate-Term Short-Term Global Bond High Yield Multisector Money Market Absolute Return Emerging Market Equity Long-Short Commodities Floating Rate Bond Treasury Inflation Protected Emerging Market Bond Global Real Estate Energy Technology Healthcare Utilities Materials display the several asset classes that are available. You are able to create an asset allocation portfolio by selecting investment options found in one of the four areas: risk-managed, tactical, balanced, and strategic asset allocations. Please keep in mind that asset allocation and diversifying your portfolio do not ensure a profit or protect against loss. Refer to pages 16 and 17 for a complete list of investment options available in the Base Account. Asset allocation solutions Risk-managed asset allocation Asset allocation strategies with focus on managing the overall risk of portfolio AZL MVP Fusion SM Balanced Fund AZL MVP Fusion SM Conservative Fund AZL MVP Fusion SM Growth Fund AZL MVP Fusion SM Moderate Fund Legg Mason Dynamic Multi-Strategy VIT Portfolio Tactical asset allocation Asset allocation strategies that are actively managed to be flexible and opportunistic in their asset allocation mix AZL T. Rowe Price Capital Appeciation Fund BlackRock Global Allocation V.I. Fund Ivy Funds VIP Asset Strategy Portfolio PIMCO VIT All Asset Portfolio PIMCO VIT Global Multi-Asset Managed Allocation Portfolio Balanced risk asset allocation Asset allocation strategies which seek to weigh asset classes to contribute similar amounts of risk to the overall portfolio Invesco V.I. Balanced-Risk Allocation Fund Strategic asset allocation Asset allocation strategies which seek to provide a generally static mix of asset classes AZL Franklin Templeton Founding Strategy Plus Fund AZL Invesco Equity and Income Fund Franklin Founding Funds Allocation VIP Fund Franklin Income VIP Fund Alternative asset allocation Asset allocation strategies with focus on alternative asset classes Oppenheimer Diversified Alternatives Fund/VA 14 Important risk and index disclosures are found on page 11. Page 16 of 24

17 Investing for protection Consistent performance and safety of principal are essential if you re looking to build and sustain a reliable source of retirement income. A conservative blend of equity, bonds, and other fixed-income instruments may help meet your needs if you are seeking a predictable stream of lifetime income with the potential for future growth. A conservative, long-term investment strategy can help provide the income you may need to sustain your lifestyle in retirement. Please refer to page 19 for a complete list of investment options available in the Income Advantage Account. TRANSFER some of your market risk to an insurance company. The chart below illustrates the statistical probabilities of events likely to happen in an average year, and how a portion of that risk can be transferred away. The greatest probability in any one given year is the loss of market value. Yet many people seldom realize the need to protect their retirement assets. 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 PREPARE for the unknown in retirement by rethinking protection. 2.5% Chance of car accident 3 Auto insurance 26% Chance of market loss 4 Variable annuity protection benefits VA Variable annuity optional living and death benefit riders help provide protection and can be purchased for an additional charge. 1 Percentage is calculated from U.S. Fire Administration Fire Estimates, Residential Building Estimates, and American Housing Survey for the United States: Accessed October CSO Table, Accessed October Percentage is calculated from the U.S. Department of Transportation National Highway Traffic Safety Administration, Highlights of 2011 Motor Vehicle Crashes, Traffic Safety Facts, December 2012 and Fatality Analysis Reporting System (FARS) Encyclopedia 2011, www-fars.nhtsa.dot.gov/main/index.aspx. 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. 15 Page 17 of 24

18 SM Allianz Retirement Pro Variable Annuity Base Account investing for performance Investment options by asset class ASSET CLASS NAME Asset Allocation Managed Volatility AZL MVP Fusion SM Balanced Fund 3,12 AZL MVP Fusion SM Conservative Fund 3,12 AZL MVP Fusion SM Growth Fund 3,12 AZL MVP Fusion SM Moderate Fund 3,12 Model/Balanced AZL Franklin Templeton Founding Strategy Plus Fund 3,4,10,12 AZL Invesco Equity and Income Fund 3,4 AZL T. Rowe Price Capital Appreciation Fund 3,4 BlackRock Global Allocation V.I. Fund Franklin Founding Funds Allocation VIP Fund Franklin Income VIP Fund 6,7,8 Invesco V.I. Balanced-Risk Allocation Fund 11 Ivy Funds VIP Asset Strategy Portfolio 5,6,7,9,10 Legg Mason Dynamic Multi-Strategy VIT Portfolio 5,6,7 PIMCO VIT All Asset Portfolio 3 PIMCO VIT Global Multi-Asset Managed Allocation Portfolio 3,10,12 Alternative Asset Allocation Oppenheimer Diversified Alternatives Fund/VA 1,5,6,7,10,18,23 Equity Large Cap Large Cap Value Allianz NFJ Dividend Value VIT Portfolio 3,5,8,18,23 AZL Invesco Growth and Income Fund 1,3,4,5 AZL MFS Value Fund 3,4 AZL Russell 1000 Value Index Fund 2,3,4,15 BlackRock Equity Dividend V.I. Fund Franklin Mutual Shares VIP Fund T. Rowe Price Equity Income Portfolio 21 Large Cap Core AZL JPMorgan U.S. Equity Fund 3,4 AZL MFS Investors Trust Fund 3,4,10 AZL S&P 500 Index Fund 2,3,4,13 Dreyfus VIF Appreciation Portfolio 23 Franklin Rising Dividends VIP Fund 24 Large Cap Growth AZL BlackRock Capital Appreciation Fund 3,4,5 AZL Dreyfus Research Growth Fund 3,4 AZL Russell 1000 Growth Index Fund 2,3,4,16 Ivy Funds VIP Growth Portfolio 5 ClearBridge Variable Aggressive Growth Portfolio T. Rowe Price Blue Chip Growth Portfolio 20 Equity Mid Cap Mid Cap Value AZL MFS Mid Cap Value Fund 1,3,4 Invesco V.I. American Value Fund 1 Mid Cap Core AZL Mid Cap Index Fund 1,2,3,4,10,13 Fidelity VIP Mid Cap Portfolio 1 Mid Cap Growth AZL Morgan Stanley Mid Cap Growth Fund 1,3,4,5 Ivy Funds VIP Mid Cap Growth Portfolio 1,5 16 Allianz Life Insurance Company of North America, Allianz Life Financial Services, LLC, Allianz Investment Management LLC, NFJ Investment Group, LLC, Allianz Global Investors, and PIMCO are affiliated companies. Important risk and index disclosures are found on page 11. Page 18 of 24

19 ASSET CLASS NAME Equity Small Cap Small Cap Value AZL Federated Clover Small Value Fund 1,3,4 Small Cap Core AZL Small Cap Stock Index Fund 1,2,3,4,13 Lazard Retirement U.S. Small-Mid Cap Equity Portfolio 1,19 Small Cap Growth AZL Oppenheimer Discovery Fund 1,3,4 Equity International/Global International Growth AZL Invesco International Equity Fund 3,4,5 Oppenheimer International Growth Fund/VA 5 International Core AZL International Index Fund 2,3,4,5,17 AZL JPMorgan International Opportunities Fund 1,3,4,5 Lazard Retirement International Equity Portfolio 5,18,19 International Value AZL NFJ International Value Fund 3,4,5 MFS VIT II International Value Portfolio 5 Global Equity PIMCO EqS Pathfinder Portfolio 3,5,6,7 Templeton Growth VIP Fund 5 Fixed Income Intermediate-Term Bond AZL Pyramis Core Bond Fund 3,4,7 Fidelity VIP Strategic Income Portfolio 7 Franklin Strategic Income VIP Fund 7 Franklin U.S. Government Securities VIP Fund 7 JPMorgan Insurance Trust Core Bond Portfolio 7 MFS VIT Research Bond Portfolio 7 PIMCO VIT Total Return Portfolio 3,7,10 Global Bond PIMCO VIT Global Bond Portfolio (Unhedged) 3,5,7 Templeton Global Bond VIP Fund 5,6,7 High-Yield Bonds Franklin High Income VIP Fund 6,7,8 PIMCO VIT High Yield Portfolio 3,6,7 Short-Term PIMCO VIT Low Duration Portfolio 3 Cash Equivalent AZL Money Market Fund *,3,4 Specialty Alternatives Long Short AZL Gateway Fund 3,4,10 Global Real Estate AZL Morgan Stanley Global Real Estate Fund 3,4,5,8 Emerging Market Equity AZL Schroder Emerging Markets Equity Fund 3,4,5,8 Floating Rate Bond Eaton Vance VT Floating Rate Income Fund Emerging Market Equity Fidelity VIP Emerging Markets Portfolio 5,8 Commodities PIMCO VIT CommodityRealReturn Strategy Portfolio 3,9,11 Emerging Market Bond PIMCO VIT Emerging Markets Bond Portfolio 3,5,6,7 Treasury Inflation Protection PIMCO VIT Real Return Portfolio 3,5,7,15 Absolute Return PIMCO VIT Unconstrained Bond Portfolio 3,5,7 Specialty Sector Energy Ivy Funds VIP Energy Portfolio 8 Materials Ivy Funds VIP Global Natural Resources Portfolio 8 Technology Ivy Funds VIP Science and Technology Portfolio 8 Utilities MFS VIT Utilities Portfolio 8,18,25 Healthcare T. Rowe Price Health Sciences Portfolio 8,22 17 Page 19 of 24

20 Income Advantage Account investing for protection When you allocate money to your Income Advantage Account, certain investment allocation rules apply. Allocation to aggressive investment options will be limited, which may limit the downside risk and the upside potential to your Income Advantage Account Value. Each quarter, money in your Income Advantage Account will be automatically rebalanced according to your most recent allocation instructions for future purchase payments. Income Advantage Account allocation rules: You can have up to 15% of your Income Advantage Account Value in the Group 1 investment options. You can have up to 50% of your Income Advantage Account Value combined in the Group 1 and Group 2 investment options. You must have at least 50% of your Income Advantage Account Value in the Group 3 investment options. 18 Page 20 of 24

21 Investment options by group Group 1 Small Cap AZL Small Cap Stock Index Fund 1,2,3,4,13 Intermediate Term Bond PIMCO VIT Emerging Markets Bond Portfolio 3,5,6,7 Specialty AZL Morgan Stanley Global Real Estate Fund 3,4,5,8 AZL Schroder Emerging Markets Equity Fund 3,4,5,8 PIMCO VIT CommodityRealReturn Strategy Portfolio 3,9,11 Group 2 Large Cap Growth AZL Russell 1000 Growth Index Fund 2,3,4,16 Large Value AZL Russell 1000 Value Index Fund 2,3,4,15 Mid Cap Core AZL Mid Cap Index Fund 1,2,3,4,10,13 International Core AZL International Index Fund 2,3,4,5,17 Specialty AZL Gateway Fund 3,4,10 Group 1 Allocate up to 15% Group 1 and Group 2 Allocate up to 50% Group 3 Allocate % Model / Balanced BlackRock Global Allocation V.I. Fund PIMCO VIT Global Multi-Asset Managed Allocation Portfolio 3,10,12 Group 3 Intermediate Term Bond Franklin U.S. Government Securities VIP Fund 7 PIMCO VIT Total Return Portfolio 3,7,10 Global Bond PIMCO VIT Global Bond Portfolio (Unhedged) 3,5,7 Templeton Global Bond VIP Fund 5,6,7 Treasury Inflation Bond PIMCO VIT Real Return Portfolio 3,5,7,15 High Yield Bond Franklin High Income VIP Fund 6,7,8 PIMCO VIT High Yield Portfolio 3,6,7 Cash Equivalent AZL Money Market Fund*,3,4 Specialty PIMCO VIT Unconstrained Bond Portfolio 3,5,7 Important risk and index disclosures are found on page Page 21 of 24

22 product profile Issue age 0-80 (based on covered person) Minimum purchase payments Initial: $75,000 Subsequent: $50 Account Base Income Advantage Maximum contributions Annual account fee Account fee subject to change? Annuity payout options Financial legacy N/A 0.30% Calculated as a percentage of the net asset value of the investment options in the Base Account No Life Life with period certain Joint and last survivor Joint and last survivor with period certain Refund life Beneficiaries receive: Base Account Value $1 million without prior approval (includes total purchase payments allocated to this account and transfers from Base Account) 1.00% single / 1.15% joint Calculated as a percentage of the Benefit Base Yes Minimum: 0.25% / Maximum: 1.75% (Will never increase/decrease more than 0.25% in any 12-month period) N/A Beneficiaries receive the greater of: Income Advantage Account Value Quarterly Anniversary Value Investment options Approximately 80 are currently available. Approximately 20 are currently available. Annual operating expense of investment options Contract types Contract maintenance charge Minimum Maximum 0.49% 1.77% Expenses shown are before fee waivers and expense reimbursements. Nonqualified money Qualified money based on BD approval $75 annually (waived for contract value of $100,000 or more) Minimum Maximum 0.49% 1.77% Expenses shown are before fee waivers and expense reimbursements. Nonqualified money Qualified money Withdrawals/transfers Withdrawals: Access to your money with no withdrawal charges Transfers: Can be made to the Income Advantage Account prior to starting income, or to the Base Account at any time All withdrawals are subject to ordinary income tax, and if taken prior to age 59½, may be subject to a 10% federal tax penalty. Withdrawals or transfers from the Income Advantage Account may reduce your Quarterly Anniversary Value and Benefit Base by more than the amount removed from the Income Advantage Account. Other features Dollar-cost averaging: 6 or 12 month program (Base Account only) Flexible Rebalancing Program (Base Account only) Systematic Withdrawal Program (Base Account only) Automatic Investment Plan Required Minimum Distribution Program Tax-free transfers among investment options 12 free per year ($25 thereafter). All transfers on the same day are counted as one. There is not a limit or fee for the following transfers: Transfers made between the same investment option in the two different accounts, dollar-cost averaging transfers, flexible rebalancing transfers, or quarterly balancing transfers in the Income Advantage Account. Income Advantage Account A protected foundation for income Initial Income Advantage Payments are calculated from the greater of: Your Income Advantage Account Value Your Quarterly Anniversary Value Quarterly Anniversary Value: Initially equal to the purchase payments allocated to your Income Advantage Account. On each quarterly contract anniversary before age 91, if your Income Advantage Account Value exceeds the value of your previously lockedin Quarterly Anniversary Value, a new Quarterly Anniversary Value will be established. Your account value may be higher between quarterly anniversaries, but will not be locked in. A lifetime of income, with the opportunity for payment increases 20 Income Advantage Payments can begin at any time as long as the younger covered person is at least 65, and the older covered person is younger than 91. Your initial annual maximum payment is based on the 10-year U.S. Constant Maturity Treasury rate: Treasury rate Annual maximum payment 3.49% or less 4% of your Benefit Base 3.50% to 4.99% 5% of your Benefit Base 5.00% to 6.49% 6% of your Benefit Base 6.50% or greater 7% of your Benefit Base Two opportunities for payment increases Income Advantage Account Value increase If on your benefit anniversary, your Income Advantage Account Value is greater than your Benefit Base, your annual maximum Income Advantage Payment will increase. 10-year U.S. Constant Maturity Treasury rate increase If on your benefit anniversary, the Treasury rate has increased to a level that results in a higher payment percentage, your annual maximum Income Advantage Payment will increase if this higher percentage multiplied by your current Income Advantage Account Value is greater than your current maximum payment. Each time your annual maximum Income Advantage Payment increases, your Benefit Base automatically adjusts to equal your current Income Advantage Account Value, which will also impact the amount deducted for your Income Advantage Account fee. Page 22 of 24

23 Page 23 of 24 Work with your investment advisor to determine what role the Allianz Retirement Pro Variable Annuity can play in your overall retirement strategy.

24 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. 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. Allianz Retirement Pro Variable Annuity Allianz Retirement Pro Variable Annuity is issued by: is distributed by: Allianz Life Insurance Company Allianz Life Financial Services, LLC of North America 5701 Golden Hills Drive 5701 Golden Hills Drive Minneapolis, MN Minneapolis, MN Member FINRA L40533 (R-5/2014) Page 24 of 24