While this indexed annuity has a pretty short surrender charge period (5 years), the spread seems incredibly high.
Right now, the Pro V1 from Allianz has a 2.5 percent spread.
This spread is applied to 1 of 2 bond indexes--either the Barcalys Capital aggregate bond index or the PIMCO US Advantage index.
Interest rates around the world are at historic lows.
Continued appreciation is possible if the world comes to a deflationary end and bond prices continue to rise, but how likely is this?
The yield story is pretty much non-existent becuase of the super low interest rates.
On top of all this, apply the 2.5 percent "spread" to any return from either of these indexes and you are pretty much certain to make no money.
What the spread means is that 2.5 percent is subtraany return from an index return.
The 2.5 percent spread creates a pretty high hurdle.
