Allianz MasterDex 10 Plus Annuity offered by Allianz

The main criticism of indexed products involves surrender charges and the fact that people have their savings tied-up for years due to the fact that they would have huge fees applied if they need to remove funds.

The whole liquidity and suitability thing is what was front and center for the trial of the agent in northern california.

You can't have an elderly person with dementia put a whole lot of their money into a financial product that basically comes with withdrawal penalties or restrictions for a decade.

The surrender charge period for this Masterdex 10 from Allianz is 10 years.

Rates of return are currently capped at 4.75 percent (the 1 year FTSE point to point cap).  This rate could obviously change and is presumably subject to and reduced by some participation rate as well.

10 years of restrictions on access to funds is a big trade for--at best--some portion of 4.75 percent that is subject to change.

This indexed annuity comes with a 10 percent premium bonus that is paid during the first 5 years of the contract.

The 10 percent premium bonus is applied to all premiums paid by the annuity owner during the first 5 years.

Also should be noted that the premium bonus only applies to funds that are annuitized by the owner--not to any withdrawals.

I think the 10 percent level is at the upper range of what is offered in the indexed market.

This level of bonus or credit should be considered meaningful since fixed income returns and yields on almost all investments are in the 1 - 4 percent range.