Allianz Life Insurance Company of North America is attempting to capture a shifting consumer preference toward wealth preservation by introducing a specialized retirement benefit designed to decouple lifetime income from estate depletion. The company recently announced the Legacy+™ Income Benefit, an optional rider for its registered index-linked annuity (RILA) products that aims to maintain a death benefit even if the underlying contract value reaches zero due to income distributions. This strategic move targets a growing segment of retirees who prioritize leaving a financial legacy over total lifetime consumption. By integrating this feature into its existing RILA framework, Allianz Life is positioning itself to address the tension between immediate liquidity needs and long-term estate objectives within the highly competitive annuity market.
Legacy+™ Income Benefit Integration and Fee Structure
The new Legacy+™ Income Benefit is currently available as an optional rider on two specific Allianz Life RILA products: the Index Advantage+ Select Income® Annuity and the Income Advantage ADV® Annuity. To access this feature, policyholders must select the rider at the time of contract issuance. The company has structured the pricing such that selecting this benefit results in lower lifetime income percentages compared to the standard Income Benefit rider. Financially, the Legacy+™ Income Benefit carries an additional rider fee of 0.85%, which is layered on top of the existing 0.70% income benefit rider fee. This brings the total annual rider fees for the Legacy+™ Income Benefit to 1.55%, which are deducted annually from the contract.
The mechanism of the benefit relies on a "Legacy Value" that is locked in at 50% of the accumulated contract value at the moment income payments commence. According to the company, this value remains unchanged regardless of the duration of the retiree's income payments, effectively shielding a portion of the assets from being exhausted by lifetime distributions. However, the company notes that this value is subject to reduction if the policyholder takes "Excess Withdrawals" or "Legacy Withdrawals." A full Legacy Withdrawal would result in the immediate termination of the contract and all future lifetime income payments.
Shifting Consumer Priorities in Retirement Planning
The launch of this product appears to be a direct response to evolving demographic trends identified by the Allianz Center for the Future of Retirement®. Data from the company's 2026 Annual Retirement Study indicates a significant pivot in how Americans approach retirement spending. The study found that 56% of Americans now prefer to leave a substantial financial legacy for family or charitable causes rather than spending their entire retirement savings on themselves. This represents an 18-percentage-point increase over the previous five-year period, when only 38% of respondents prioritized legacy.
By addressing this specific psychological barrier—the fear that spending during retirement will eliminate the ability to pass on wealth—Allianz Life is testing whether specialized RILA riders can drive higher adoption rates among cautious investors. The company is positioning the Legacy+™ Income Benefit as a tool that provides "permission to spend" by offering the assurance that a core portion of the estate will remain intact. This product development highlights a broader trend in the insurance sector where manufacturers are moving beyond simple income guarantees toward more complex, multi-objective financial structures that attempt to solve for both longevity risk and estate planning simultaneously.
Key Takeaways
- The Legacy+™ Income Benefit is an optional rider for the Index Advantage+ Select Income® Annuity and Income Advantage ADV® Annuity.
- Total annual rider fees for the Legacy+™ Income Benefit amount to 1.55%, consisting of a 0.70% income benefit fee and a 0.85% Legacy+™ fee.
- The benefit locks in a Legacy Value at 50% of the accumulated contract value when income payments begin, which remains constant regardless of the length of income payments.
FinanceInsyte's Take
In our view, Allianz Life is executing a sophisticated attempt to capture "sticky" assets by solving for the psychological friction inherent in the decumulation phase of retirement. The 18-percentage-point surge in legacy prioritization identified by the Allianz Center for the Future of Retirement® suggests a fundamental shift in consumer behavior that traditional annuities have struggled to address. By offering a mechanism that guarantees a death benefit even if the contract value hits zero, Allianz is essentially selling "consumption confidence." However, the 1.55% total fee structure is a significant consideration for institutional advisors and clients; the trade-off between higher fees and the peace of mind provided by the 50% locked-in legacy value will be the primary determinant of its market success. This move signals that the RILA market is maturing from simple indexed growth tools into highly customized, multi-purpose wealth management instruments.
Questions & Answers
How does the Legacy+™ Income Benefit impact the total cost of an Allianz Life RILA?
The Legacy+™ Income Benefit requires an additional 0.85% rider fee, which is added to the 0.70% income benefit rider fee. This results in a total annual rider fee of 1.55% being deducted from the contract.
What happens to the death benefit if the contract value reaches zero?
The Legacy+™ Income Benefit is designed to provide a death benefit even if the contract value falls to $0 due to income payments. The Legacy Value is locked in at 50% of the accumulated contract value at the start of income payments.
Are there risks to the guaranteed Legacy Value?
Yes. The Legacy Value can be reduced by "Excess Withdrawals" or "Legacy Withdrawals." Furthermore, a full Legacy Withdrawal will terminate the contract and all future lifetime income payments.
Which specific products support this new benefit?
The Legacy+™ Income Benefit is available on two Allianz Life RILA products: the Index Advantage+ Select Income® Annuity and the Income Advantage ADV® Annuity.
Source: Allianz Life Insurance
