What will be covered in this review?
In this annuity review, we will be going over the following information on the Allianz MasterDex X fixed indexed annuity with the simple income rider:
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
- Product Type
- Current Rates
- Realistic Long-Term Investment Expectations
- How It Is Used
- How It Is Most Poorly Used
At first glance, you may notice that, much like other annuities, the Allianz MasterDex X annuity with simple income rider will perform very well in some instances. But, not all annuities will be the very best alternative in all situations. This can especially be the case, depending on what your goals are for that annuity.
Annuity and Retirement Income Education You Can Actually Trust
It’s possible that you might have come across our website for the first time and that you don’t know what it is that we do here. But the good news is that you have landed in the right place. That is because, if you’ve been searching for information on annuities – and possibly even “Googling” the term “annuity” – then it is likely that you’ve seen some of the annuity marketing websites that make some pretty bold claims in order to only get your contact information.
These sites will often times state things like the following about the annuities that they offer:
- 7-8% Annual Returns
- Highest Payouts
- Lowest Fees
- Guaranteed Lifetime Income
- NO Market Risk!
What we know from our experience is that really, none of the potential benefits that are being claimed even matter unless you know why it is that you are purchasing the annuity. And, after diving a bit deeper into our research, we also have discovered that many of these annuities really cannot even offer the returns that are being claimed.
It is likely that you have also come across other websites that are adamantly opposed to annuities altogether. But in many cases, these websites have absolutely no idea how annuities even work!
The reality is that both of the above-mentioned approaches to annuities are inherently flawed, and neither of them will benefit you in any way.
What you will discover, though, is that the website you are on right now is very different. Here at Annuity Gator, we provide you with the most independent, objective, and thorough annuity reviews that can be found on the Internet. We have also been doing it for far longer than many of the “copycat” sites that are out there. We offer these reviews because we want you to be able to determine for yourself whether or not the annuity you are reading about truly makes sense for you and your financial objectives.
So, let’s go ahead and get started.
Allianz MasterDex X with Simple Income Rider Annuity at a Glance
|Allianz MasterDex X with Simple Income Rider
|Type of Product
|Fixed Indexed Annuity
|Standard & Poor's Rating
|AA (Very Strong)
Opening Thoughts on the Allianz MasterDex X Annuity with Simple Income Rider
Over the past several years, the Allianz MasterDex X fixed indexed annuity with Simple Income Rider has been an extremely popular annuity with financial advisors. This is due in large part to consumers being pitched the annuity’s key points regarding its principal protection, along with its ability to provide a guaranteed lifetime income in retirement. In addition, because of its simple income rider, this annuity can also offer a way to provide income for life without having to annuitize.
Because of that, clients are often times under the impression that they “can’t go wrong,” by being able to obtain market gains, yet not lose any of their principal in the process if the underlying index should perform poorly – while at the same time still have an income that they can rely on in the future.
But, although all of this may sound ideal, the reality is that if you take a closer look at the “fine print” on how this annuity really works, you will discover that it doesn’t exactly perform the way that many annuity salespeople would like for you to believe. The good news is that we have tested all of the moving parts on this annuity and our results are here in this review.
Before moving on to the details, there is some required legal information that must be disclosed…
This is an independent annuity review. Because of that, this review will not include any type of recommendation regarding the purchase or selling of annuities. Allianz has not endorsed this annuity review in any way, and we don’t receive any form of compensation for providing this review. The information offered here is just meant to offer an opinion so that readers may view our personal perspective regarding this annuity, while at the same time determining the possible advantages and/or drawbacks regarding this product.
Readers may also be able to determine whether the annuity being reviewed will be a fit for their own financial goals. So, before moving forward with any type of financial product or service, it’s a good idea to pursue due diligence and to discuss the product or service with a competent and properly licensed financial advisor. By doing so, you will be able to more accurately decide whether or not the financial vehicle you are analyzing will fit in with your specific needs and goals. All of the names, materials, and trademarks that were used in this annuity review are the property of their respective owners.
How Allianz Describes the MasterDex X with Simple Income Rider Annuity
Based on the Allianz website, some of the main selling features that are highlighted for this annuity include the following:
- Potential for indexed returns, based on the performance of an underlying market index
- A bonus on premium payments received in the first three years
- The ability to access the money in your contract through a penalty-free lump-sum withdrawal after 10 years
- Flexible income options – including traditional annuity payments or lifetime income withdrawals from the optional Simple Income Rider (which is available at an additional cost)
How a Financial Advisor Might “Pitch” this Annuity
In the world of financial services – just like any other industry – there will often times be certain catch phrases that can make products or services sound better when marketing them to clients. Over the past several years, the term “hybrid annuity” has stuck when discussing certain types of annuities that offer a variety of different features that are all lumped together into one single product. This is the case with the MasterDex X.
Here, you have many of the basic features such as tax-deferred growth during the accumulation phase and guaranteed lifetime income during the income phase – along with various optional riders that allow it to have multiple benefit types.
In this particular case, you will also have the ability to grow funds based on the underlying market index, as well as the protection of principal if the Index should perform poorly. You also have the guaranteed income for life rider. Therefore, many sales agents may refer to the MasterDex X as being a hybrid annuity when pitching it to clients.
Yet, here again, even though this annuity does, in fact, offer these features, it is not always going to perform as such – and because of that, clients can, and often are, disappointed with their results. Unfortunately, this comes at a time when it’s much too late to do anything about it.
Many of these clients, in fact, are initially under the impression that they are going to be getting returns in the neighborhood of 7-8% – and in some cases, even more – when in fact, this is not the case at all.
If your financial advisor explains this annuity to you properly, then you should never believe that you will earn anywhere near this amount of return with this particular annuity. And, if they are promising you 7-8% – then you may want to consider using another advisor, because they are either not explaining the annuity correctly, or they just want to make a quick sale.
What About the Fees?
In addition to the returns (or lack of high returns) on the Allianz MasterDex X annuity with Simple Income Rider, you should also have a very clear idea of the fees that are involved with the annuity you are purchasing. This is because they can make a big difference in your overall returns, as well as in your options for withdrawing your funds if or when you should need to do so.
For example, with the MasterDex X, there is a back-end surrender charge for the first ten years that you own the annuity. This starts at 10% and remains at 10% for the first three years. It then gradually grades down until it eventually becomes 0% in Year 11.
A surrender charge will also apply if you annuitize prior to the sixth contract year, or if the annuity payments are taken over a period of fewer than ten years, which could result in a loss of interest and bonus – and even a partial loss of your principal. This means that you could essentially end up receiving back less than the amount of premium that you put into the annuity. So it is important to read the product prospectus very carefully before moving forward.
Our Take on the Allianz MasterDex X Annuity with Simple Income Rider
Where it works best:
Where it works WORST:
- If you want your money to grow safely until it is transferred to heirs, and you are not concerned with it generating large returns over time
- If you are concerned about outliving income or savings in the future
- If you want to receive an ongoing, guaranteed income stream in retirement
- If you want to provide an ongoing, guaranteed income stream for a spouse
- If you are seeking high returns on your principal (greater than 2-4%)
- If you do not plan to use the lifetime income benefit
- If you plan to just let the account grow and then turn on the Simple Income Rider
When deciding whether a fixed indexed annuity is the right product for you and your financial goals, it is important to understand how the features of the product will work – especially as it relates to the reason (or reasons) why you are purchasing the annuity in the first place.
It is also important to read the “fine print” on the product before signing on the dotted line, because often times these products may sound great on the surface, but once you get down to the nitty-gritty details, they may not perform exactly as they are described.
For example, many advisors may highlight the lifetime withdrawal rate or the roll-up rate. But these things are not the same as the annuity’s actual return – and these will not cause the annuity to produce a 7-8% annual return overall. Following the advice of an uneducated financial salesperson can often lead to disappointment, as well as to less income in retirement than you anticipated.
If you are looking specifically for guaranteed lifetime retirement income, without any market risk, then there are some better options out there for you. But, for those who are seeking an investment that does not go down, and who are happy with a lower single-digit return – and who also want the backing of a good, solid insurance company – then this may be a good option.
We still feel that many financial reps either don’t understand how to determine real annuity returns, or they are drastically over promising what these annuities can do. So, it is important that you truly understand what you are getting into with your retirement money. With that in mind, you need to be wary of any annuity that is promised to perform much better than what I have illustrated here. That is because the Allianz MasterDex X annuity, even with the Simple Income Rider, will not likely produce much more than a 5% return overall.
In reality, the only way to know if this annuity is a good fit for your specific situation is to have it tested. We offer this testing for free at Annuity Gator. So, if you would like to get a better idea of how this product may fit in with your goals, then just get in contact
with us and we’ll test it for you.
Have Any Questions on the Allianz MasterDex X Annuity with the Simple Income Rider? Notice Any Mistakes on this Review?
If you have any additional questions or if you want more information on the Allianz MasterDex X annuity with the Simple Income Rider, then please contact us
We understand that annuities can be pretty confusing – and many financial advisors are pushing their clients to purchase them – especially over the past several years. This is due in large part to the guaranteed income that they can provide. But, before you do so, you still need to know all the facts in order to be sure that the annuity you are considering will be right for you.
An annuity is a long-term endeavor, and as you saw in this review, they can also have long-term surrender penalties – so you don’t want to lock yourself into something that you can’t get out of. If an annuity does make sense for you, though, it can be a great way to ensure that you have the ongoing retirement income that you need in the future.
If you happen to know anyone who also has an annuity, or who are considering getting one, then please share this post with them. There are many people who are getting very conflicting information about annuities. Our goal is to educate people about annuities in an objective way. So, for instance, if you have a Facebook account, then you can just click on the little “Facebook” icon and share this article. That way, more people can find this information and will hopefully benefit from it.
Also, because there so much information on annuities – and because these products can change often – we may have missed something. So please, if you noticed that something on this review was outdated or needs to be corrected, let us know and we’ll be happy to revise it. We want to be sure that all of the information is as clear and up-to-date as possible.
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