What’s Covered in this Review?
In this review I’ll be covering the following information on the Allianz MasterDex X Annuity with Simple Income Rider:
- Product type
- Current rates
- Realistic long term investment expectations
- How it is best used
- How it is most poorly used
What you’ll find is that like all annuities, the MasterDex X Annuity does some things really well. However, there are things some agents might say about its performance that is not entirely true. It’s important you understand the differences, so you can determine if it really is a good fit as part of your financial plan.
If this is your first visit here at AnnuityGator.com, we publish the most comprehensive independent and objective annuity reviews on the online and have been doing it longer than pretty much anyone out there. Ultimately, we want you to decide for yourself if an annuity makes sense and you’re getting the best deal.
Let’s dig in!
Allianz MasterDex X Index Annuity at a Glance
|Product Name||MasterDex X|
|Issuer||Allianz Life Insurance Company of North America|
|Type of Product||Fixed Index Annuity|
|Standard & Poor's Rating||"AA" (Very Strong)|
Opening Thoughts on the MasterDex X Annuity
Over the past few years, the Allianz MasterDex X has been one of the most popular Fixed Indexed Annuities. Thousands of investors are recommended this product every month as a safe way to grow their money, then turn it into a future income stream for retirement. The basic sales pitch is that this annuity can get upside based on the market – but with no downside. Further, it’s often sold based on the minimum income guarantee from the Simple Income rider. This rider allows the annuity to create an income for life benefit without annuitizing.
So in a nutshell, we commonly hear it being sold as a “hybrid” annuity that offers the best of both worlds: Market-based gains should the markets go up, no downside if the market goes down, and a growing income base that can be turned into a lifetime income even if there’s no market growth at all.
Sounds nice on the surface, but once you actually thoroughly read through the disclosure documents and contract details – you’ll find it doesn’t exactly work as many suggest it will. The good news: I tested all the moving parts of the annuity and my findings are in this review.
Since many people who are considering this annuity are either in retirement or close to it – the Simple Income Rider (a guaranteed lifetime income benefit) is another feature of interest. This is an optional rider, and when selected allows for either a guaranteed income for life to be taken immediately or deferred to a future date based on a “roll up” value. The way this works is quite a bit different in reality, then the way many agents explain it. To be clear, it’s a nice benefit – but some people suggest it will allow for 5%-7% (or higher) returns – and it most certainly will not. You’ll see why later in this review, most specifically in the nearly 1-hour video we created that shows exactly how it really works.
Before we get into the gritty details, here are some legal disclosures…
This is an independent product review, not a recommendation to buy or sell an annuity. Allianz Life Insurance Company has not endorsed this review in any way nor do I receive any compensation for this review. This review is meant to be an independent review at the request of readers so they could see my perspective when breaking down the positives and negatives of this particular model annuity. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional should you have specific questions as they relate to your individual circumstances. All names, marks, and materials used for this review are the property of their respective owners.
How Allianz Life Describes The MasterDex X Annuity
Per the Allianz MasterDex X Annuity brochure, here are some key points as to how it’s marketed:
- The potential for indexed interest based on changes in an external market index
- A bonus on premium received in the first three contract years
- Access to full contract value, including bonus, as a lump sum – without surrender charges – after 10 contract years
- Free withdrawals of up to 10% based on your paid premium
- Flexible income options, including lifetime income
There’s a few more bells and whistles, but those are the basics. If you’re looking for the full brochure, you can download it here.
How Financial Advisors Might “Pitch” This Annuity
In the past few years, insurance agents have fallen in love with the term “hybrid annuity.” Even though the insurance companies don’t seem to like the term a whole lot, I guess the cool sounding name makes it easier to sell annuities, so it’s caught on nonetheless. When agents use the term “hybrid,” they are referring to an annuity that has multiple annuity features rolled into a single product.
In the case of the MasterDex X, it can be used with optional riders that allow it to have multiple benefit types, so whether Allianz likes it or not – plenty of agents will call it a hybrid annuity.
Since this is often then referred to as a “hybrid annuity” – there are a few different ways it might be pitched. My experience, however, is that most sales agents will cling to two main components:
- The safety combined with return potential of the market
- The guaranteed income for life rider
After all, that’s what a “hybrid annuity” is – an annuity that gives you a form of growth, access to capital, and guaranteed income – all rolled into one.
While those are true statements, this annuity is not all roses. It can work well when used correctly but has shortcomings just like any other financial product. One of the biggest issues I’ve run into is that many agents misrepresent how this annuity will actually perform. That’s a problem.
From the many people I’ve talked to personally about their experience with agents, most seem to have been told this annuity will perform “better” than other annuities. I’ve even heard from potential buyers this annuity has a minimum return of 6% per year but has the possibility to earn 10% or more if the market really goes up…
Is any of that true? Nope.
If your agent/advisor explains this annuity correctly, you should never get the impression you’ll earn more than 2% to 5%. If bigger returns than that are part of your agent’s sales pitch – run, don’t walk, to find a more honest financial advisor.
Complete Video Review of the Allianz MasterDex X Fixed Index Annuity
Warning: We tend to get pretty in-depth and a little geeky with video reviews. This particular video is very thorough and will show you exactly how to calculate MasterDex X Annuity performance. Enjoy, but consider yourself warned. 😉
As you can see from the video review there are some major flaws in the sales pitch vs. reality going on here.
Yes, this annuity is linked to the market (but will not produce market-like gains). Yes, it really does have an income for life guarantee (but won’t return even close to 6%). Allianz is a rock solid company, financially speaking; but, the returns of this product are rather pedestrian and there are probably better options for many investors.
The Annuity Gator’s End Take on the MasterDex X Annuity
Where it works best:
- For producing a reliable, “pension-like” guaranteed income stream (so long as Simple Income rider is elected, and used shortly after purchase)
- For producing an income for life that cannot be outlived by a surviving spouse
- For investors who have a family history of life longevity
- For investors that have no need for their money or generating large returns, but want it to grow safely until transferred to their beneficiaries
Where it works worst:
- For those that do not plan on using the income for life benefit, or don’t plan to use it right away
- For those who plan to let the account grow for quite a few years, then turn on the Simple Income rider (there are better options)
- For those seeking maximum long-term growth
- For those expecting real returns of greater than 2-4% per year on average
One of the most important things for investors to understand is that the “roll-up rate” is not the actual return, nor is the “lifetime withdraw rate” the actual return. In no way will it produce the 5% to 8% return numbers a lot of uneducated advisors toss around when trying to sell it.
For someone strictly looking for guaranteed income with no market risk, there are better options available. For someone looking for an investment that cannot go down, is content with lower single digit returns, and wants the financial strength of a really solid company – this might be a good fit.
I’m still convinced most agents don’t realize what the real returns are, though, and significantly over promise what’s realistic – so be especially wary of anyone who suggests this annuity will work better than how I illustrated it here. If the agents are being upfront and honest, you’ll notice their explanations match very closely (if not exactly) as described in this review. When that happens, you have an agent you can trust.
As a recap to the video (for those that don’t have 50+ minutes to watch it), the MasterDex X Annuity will not actually return 6%. Nor will it likely return 5%. When financial advisors use those numbers they are referring to percentages used to calculate the income guarantee.
The only way to know if this annuity is a good fit for you is to have it tested. We do this free at AnnuityGator.com, so just get in touch with me and I’ll use the calculator from the video to illustrate for you what returns for your situation are likely to be. If your agent was honest with you the numbers will match up – if not, well then you might want to reconsider who your agent is.
Have Questions on the Allianz MasterDex X Annuity? See any Mistakes?
If you have questions please let me know. You can reach me via the Free Annuity Help form here.
I know annuities can be confusing and a lot of people are pushing investors very hard to buy them. But you need to know the real facts to make sure if you go that route you don’t end up regretting it later. After all, annuities are long-term investments with contracts, surrender penalties, etc. For some people, they won’t make sense at all, but for some, they might.
If you know anyone who has an annuity or is thinking of buying one, please share this post with them. I know a lot of people are getting very conflicting information and my goal in writing this review and making the video was to educate in an objective way. If you have a Facebook account you can click on the little “Facebook” icon and share this article. That way more people will be able to find it and hopefully, more people will benefit.
Thanks for bearing with me on this rather long post, I hope you found it beneficial in your research.
Lastly, like all humans – I do make mistakes. If you see one on this review please reach out and let me know. I’m always more than happy to make corrections and give credit where it is due. If you’re an investor and this review causes confusion and creates questions feel free to reach out as well. I can’t always get back right away but usually, I can clear up those questions within a few days.
The Annuity Gator
Your site is very informative and helpful.
I am 68 years old and my wife is turning 60 this year. Will it be a good choice for us? Maybe you can suggest another product? Thank you. Tom.
Thanks for finding the website and the kind feedback.
It’s hard to know if any specific product is a good fit for you without knowing more about your situation and goals. If you check your email I’ve had one of my partners reach out to offer some better guidance. The comment feature on the blog is nice, but not a great place to share confidential information.
– Annuity Gator Team
We are thinking of purchasing 2 different types of annuities, 1 that parks extra cash to grow it since interest rates are so low, and 1 that will provide an income stream later. You seem to indicate that the above product would not be a good choice if we don’t want to start the income stream soon. What do you suggest instead? And what is as good as, or better than Aviva balanced allocation? Thanks, Lucia
Hi Lucia – Thank you for your message. We would be happy to discuss with you, if you are still in need of information about purchasing the annuities that you referenced. In order to provide the very best advice, though, we would need to get some additional information from you. Rather than sending sensitive personal details back and forth via email, it would be better to discuss via phone. Please feel free to reach out to us, toll-free, by calling (888) 440-2468. Thanks, we look forward to hearing from you. Best. – Annuity Gator Team
An agent is trying to sell me Allianz 222 annuity. I don’t see a review on this. I am 64 years old and I am looking for an income stream in retirement, and protection of principal. I am looking at investing 100k. I Thank you for your blogs and videos. They’re very informative and simple to understand. I will appreciate your feedback on this product.
Hi Josie – Thank you for your message. We have recently updated our review of the Allianz 222 annuity – which includes more details on the underlying indexes in this particular annuity. We can discuss any additional details with you regarding the Allianz 222 annuity. Please feel free to contact us directly via phone at (888) 440-2468. Best. – Annuity Gator Team
I will be 66 next month; I have a 20 year old daughter. I get a pension of $1134 per month from Ford Motor Company. I must decide by July 29 if I want to continue with monthly or take a lump sum pension of $205,000. I understand ?? that if the lump sum is rolled over into an IRA, it won’t be taxed; an income annuity was suggested (a Single Life for me with a cash refund to my daughter who is 20). Fidelity holds my present IRA worth $500,000 (it used to be a 401K until I was afraid of Ford going under like Chev did; I wish I had bought share of Ford at $1 per share instead). My husband and I do not live together; he cuts my grass but doesn’t help me financially. He would get 65% of my pension if I die. I was told if I buy the income annuity, I can name my only child (she’s 20) as beneficiary. Do you have any suggestions for me.
Hi Barbara – We would be happy to walk you through some potential scenarios. In order to do so, though, we would need some additional information from you. Rather than emailing personal data back and forth, please feel free to contact us via phone, toll-free, at your convenience. We can be reached directly at (888) 440-2468. Thanks, we look forward to hearing from you. Best. -Annuity Gator Team
HUSBAND 70, WIFE 63. CONSIDERING AMERICAN EQUITY’S BONUS GOLD FIXED INDEXED ANNUITY WITH 1ST YEAR 10% BONUS, GUARANTEEING MINIMUM 4% GROWTH WITH NO ADDITIONAL RIDER FOR 16 YEARS. CONCERNED ABOUT COMPANY’S A- RATING. INTERESTED IN YOUR OPINION AND HOW IT COMPARES TO OTHER FIXED INDEXED ANNUITIES FROM OTHER FIRMS.
Hi – Thank you for your message. The American Equity Bonus Gold could be a viable option for you – depending on what you are looking for the annuity to do. We would be happy to discuss with you this particular option, as well as some others that could fit your situation. In order to do so, though, we would first need to get some additional information from you. Rather than emailing personal details back and forth, please feel free to contact us directly via phone, toll-free, at (888) 440-2468. Thanks. We look forward to speaking with you. Best. – Annuity Gator Team
Nice review of this “hybrid” annuity. My financial advisor/CFP is recommending a new Alianz annuity that I believe she referred to as a hybrid program also. It is the Allianz 360 annuity and 360 Benefit Rider. I would like very much to see your review of this annuity if you have one. I recently met with yet another advisor/CFP that denegrated this recommendation and instead recommended the Jackson Prespective II variable annuity. As might be expected, my original advisor denegrated this recommendation. Any assistance you might be able to render as an unbiased third party would be greatly appreciated. Thank you.
Hi Jim – Thank you for your message. We do have a review posted on our website for the Allianz 360 annuity. We would also be happy to answer any additional questions or concerns that you may have about the 360, or any other annuity. Please feel free to reach out to us via phone, toll-free, at (888) 440-2468. We look forward to hearing from you. Best. – Annuity Gator Team
Thank you for sharing your information and analysis. It is helpful to folks like me 🙂 I suspect I was a bit gullible at the “goodness” my financial advisor extolled about this Allianz MasterDex X product, and didn’t persist in asking for clarification of “fuzzy” details. According to your analysis, it appears the real rate of return is significantly lower than what I expected. So, two questions, one perhaps philosophical investment strategy, the other specific to this product.
1. If this product is intended to be held 10 years (or more) before beginning to take monthly payments from it, why would anyone with at least a bit of risk tolerance invest in this annuity product rather than investing in the stock market (market indexes perhaps?), since most studies show the rolling 10-yr average stock market return is around 10% (particularly is you have a 15+ year period) ?
2. IF I decide this annuity product was a bad decision and want to get out of it, what is that really going to cost me, knowing that it’s been a little less than one year since I purchased it ? If it is relevant, I’m 56 years old now.
Thank you for any information or suggestions for further reading you can offer!
Hi Al – Thank you for your message. We would be happy to discuss these questions with you, as well as walk through how such product may (or may not) fit with your specific situation. In order to best do so, we would actually need to get more information from you – which would be ideally done via phone, as versus emailing personal details back and forth. At your convenience, please feel free to reach out to us, toll-free, by calling us at (888) 440-2468. Thanks, we look forward to hearing from you. Best. -Annuity Gator Team
I just retired at 62. I was contacted by an allianz agent who is offering the 365I annuity and mentioned a 6% premium bonus. She said the annuity guaranteed the 6% return. Is the two to five percent range more realistic?
Hi Craig – Thank you for your message. The answer is that they could be. We can help you to get a more accurate idea of how the Master Dex X may return by running a (free) analysis for you via our annuity calculator. Please contact us at your convenience at (888) 440-2468. Thanks, we look forward to chatting with you. Best. – Annuity Gator Team
i am 64 wife is 60 you mentioned a better strategy for investing but did not say what it was i am very interested in because allianz is a product i am looking at would also like comparison info on allianz vs lincoln financial annuities liked your video and site thank you
Hi Howard – Thank you for your comment. We would be happy to discuss some possible annuity options with you, however, we would first need to get some additional information from you in order to provide you with the best advice. Instead of emailing personal financial details back and forth, though, it would be best to discuss via phone. Please feel free to contact us directly, toll-free, at (888) 440-2468. We look forward to speaking with you. Best. – Annuity Gator Team
Hi Howard – Thank you for your message. We would be happy to discuss some potential options with you. In order to provide you with the best advice, we would need to get a bit more information from you. Rather than emailing sensitive details back and forth, though, it would be best to chat via phone. Please feel free to reach out to us directly, toll-free, at (888) 440-2468. We look forward to speaking with you. Best. -AnnuityGator Team
I would like to leave my information with you and could you recommend an annuity.
700k 55 yrs old and looking for income for life in 6 yrs. with an option to go out more yrs. then start the income for life. I am looking strictly for income for life not interested in these fancy growth products they are trying to push tied to the stock market.
Hi Don – Thank you for your message. We would be happy to discuss some possible annuity options with you. In order to provide you with the best advice, though, we would first need to obtain a bit more information from you. Rather than emailing personal financial details back and forth, though, it would be best if we chatted by phone. Please feel free to contact us directly, toll-free, at (888) 440-2468. We look forward to speaking with you. Best. – Annuity Gator Team
Hi Don – Thank you for your message. We would be happy to discuss some potential options with you. In order to provide you with the best advice, we would need to get a bit more information from you. Rather than emailing sensitive details back and forth, though, it would be best to chat via phone. Please feel free to reach out to us directly, toll-free, at (888) 440-2468. We look forward to speaking with you. Best. -AnnuityGator Team
the link for the Annuity E-book Free is broken. Please provide. Thx!
Hi Carolyn – Thank you for your message. We have been in the process of updating (and adding to) our AnnuityGator.com website. Please feel free to check back and download the free annuity e-book. If we can help further, you can also reach us by phone, toll-free, by calling (888) 440-2468. Best. – Annuity Gator Ream
Thanks for your article on the Allianz annuity. My wife and I have an appointment with the Blackstone group in a few weeks and Allianz is one of the products they will be pitching. I will use your information to determine if they are “trustworthy”.
I have not idea if an annuity should be part of our retirement portfolio, but will start the education process on your website.
Hi Gary – Thank you for your message. If you are still in need of information about the Allianz Master Dex X Index annuity – or any annuity, for that matter – please feel free to contact us directly via phone. We will be able to answer any questions that you may have, and also to run some scenarios based on your specific goals. You can reach us toll-free by calling (888) 440-2468. Best. – Annuity Gator Team
I am considering this Allianz product but I believe my agent said there was no cap for the annual gain. If I am correct, wouldn’t that throw all of stats off that you have presented here and make this a much better product?
Hi Pavel – Thank you for your message. Yes, it could make the stats differ. If you’d like, we can run your specific information through our annuity calculator for the Master Dex X. That way, you can get a better idea of how the product may perform based on your figures. Rather than emailing sensitive information back and forth, please feel free to call us toll-free at (888) 440-2468 and we can get the information that is needed to run the calculations. Thanks, we look forward to chatting with you. Best. – Annuity Gator Team
Do agents need to pick up policy if you cancel?
Hi Barbara – Thank you for your message. If you cancel an annuity, you have the option of mailing the policy back to the insurance company. If the annuity is still within its free look period, you can also receive a refund of the deposit that you made. Best. – Annuity Gator Team
A concerned investor
Hi Jason! I was told by a financial advisor that if I invest in an annuity with Allianz, my investment will double over 10 years. Is this true? From your article, it doesn’t sound like it.
Hi and thank you for your message. To answer your question, while doubling your money is not completely out of the question, it is not likely that you could do so – especially in a fixed index annuity with a cap or participation rate (which essentially limits the annuity’s upside potential). In order to give you a better answer that fits a particular annuity, along with your specific situation (i.e., time frame, income goals, etc.), we would need to get some additional information from you. Rather than emailing sensitive personal details back and forth via email, a direct call would likely work best. Please feel free to contact us toll-free at (888) 440-2468. Thanks, we look forward to speaking with you. Best. – Annuity Gator Team
Very information reviews. Thank you so much.
During your review of the Allianz 222 you rated it as a B or B+. How does the Master Dex X compare and what would you rate it?
Hi Jo-Ann – Thank you for your comment. The rating would be dependent in part on an annuity buyer’s objectives, income needs, and time frame. We would be happy to discuss further with you, but would need some additional information. Rather than emailing sensitive personal details back and forth, it would likely be best to chat for a few moments via phone. Please feel free to contact us at your convenience at (888) 440-2468. Thanks, we look forward to hearing from you. Best. – Annuity Gator Team
Not sure if you are still looking at comments but had a couple of thoughts. First off, at least one of your crediting method spreadsheets looked like it didn’t allow for a -0.75% gain given that the rider fee is always applied regardless of whether your crediting method was at 0%. However, the monthly average one did do this so that’s good given it had the highest return which was used afterwards. It would be interesting to look at those returns for the lifetime of the annuity if the caps and spreads were available during all those years and see how it compares. 🙂 Also, I own the MasterDex X and the Simple Rider III has 3 payout options. Have you done any analysis of those to see which would be best?
Hi Bernie, and thank you for your comment.
We are always updating our annuity review database, so we will look into this. If we can help answer any questions, feel free to reach out to us directly at (888) 440-2468, or set up a time to chat with one of our annuity specialists by visiting: http://annuitygator.com/contact/. We look forward to hearing from you.
Best! Annuity Gator