Index Annuities

[Franz Kafka]

If the bold above is correct then this is your problem.

The GenDex is an Indexed Life Insurance Policy, not an Indexed Annuity.....

And a 1.4% return could be very possible on an IUL contract in its early years....


Unless its the MasterDex annuity and your just getting the names confused....

I don't know whether the OP is misled or trying to mislead.

 

[scagnt83]

I don't know whether the OP is misled or trying to mislead.

I think they are just very confused and "think" that they know it all after going through a career shops sales school

Every single thing the guy has said about IAs is factually wrong.

It sounds like the stuff NYL used to preach about IAs when I was there "your clients will loose money, its not really guaranteed, its a ripoff, a con, phantom annuities, etc. etc."

 

[KJ in Miami]

If the bold above is correct then this is your problem.

The GenDex is an Indexed Life Insurance Policy, not an Indexed Annuity.....

And a 1.4% return could be very possible on an IUL contract in its early years....


Unless its the MasterDex annuity and your just getting the names confused....

You got me... confused the names! I appreciate the correction on that one.
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How an Equity Indexed Annuity Works? - Page 3

Read and learn something... because you're an *** when it comes to these products:

The index annuity does not invest or hold securities. That is why they are not a security or "investment".

Your ignorance is astounding.



BTW, I have no idea about the Allianz products. I'm not defending them or any other company. You simply need to know the general makeup of these policies.

Funny, calling someone an *** then proving your point by posting to some other discussion like that solved anything!! Do you understand the Whole Life is invested primarily in bonds... UL policies a little riskier products... FIA's of course in the indexes. ONLY in your world can Allianz pay high commissions to Agents, pay clients less than they deserve, and fool some to believe that the do not make 11% off this money!! What do you think, life insurance or annuities are not invested... "your ignorance is astounding!" They just don't sit in a CD or Money Market account!!

The whole purpose of this post was to understand the concept you guys use to sell these products. Unfortunately, all the class actions lawsuits will not convince that your clients are being victimized by these companies and their tactics. So defend what you have been told, don't try to understand, & maybe one day you will realize the truth in what I am saying. But, when I see what these products have done to Senior's life savings, it upsets me! They are realistically paying less than CD's without liquidity. This is an actual case - not something I made up.

Even the book "The AARP Guide to Retirement" explains that these companies can change their participation rates!

If you truly care about your clients... do the right thing and verify! Otherwise, you could be taking part in a scheme and these folks do not need to be taken advantage of. If you don't, I do not know how you sleep at night!!
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I think they are just very confused and "think" that they know it all after going through a career shops sales school

Every single thing the guy has said about IAs is factually wrong.

It sounds like the stuff NYL used to preach about IAs when I was there "your clients will loose money, its not really guaranteed, its a ripoff, a con, phantom annuities, etc. etc."

Factually wrong... Prove that!! And not with a post to some other "discussion." Possibly you can prove it with one talking about the class action lawsuits against an FIA company. Oh ya, is "factually wrong" too?

You really don't care if what I am saying is true. Your clients don't deserve you looking out for them. Probability & statistics prove the point... no "career sales school."

You are indoctrinated - now you know how Madoff pulled off his scam, he just hired people like you!
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Index annuities are poison for your pocketbook
<*Prev*Next*>
RIP-OFF ALERT:*For years, I have warned people about something known as index annuities. They're one of the hottest products in the investment and insurance landscape, but they're poison for your pocketbook.
Index annuities really took off after the stock market got decimated a few years ago and marketers saw the opportunity to take advantage of people who were worried about outliving their money.
Of all the things you could for your wallet, buying an index annuity at any age is just about the*worst*thought possible.
Money*magazine recently ran a long-form feature about all the problems that have befallen those people who are sold these things. The story also dug into why index annuities are pushed so hard to the great detriment of buyers. The simple reason is a massive commission goes to the insurance salesperson who sells it!
Index annuities are sold with the promise that you can earn a return based on the stock market in good years, along with the guarantee that you'll*lose no money in bad years. That's very attractive to someone who is 65 and worried about having enough money for the rest of their life. It's a lure that makes people think, "Hey, I can play the market with no risk on the downside? What could be wrong with that?!" Actually, so much is wrong here, though chiefly 2 things come to mind:
These plans come with massive fees. There's what's called a "surrender charge" that can hang with you for 15 years. If you buy in and then need to get out before 15 years, that surrender charge can be tens of thousands of dollars or more.
In most of the convoluted contracts for index annuities, the insurance company can decide to change how much these policies earn each year. So they can offer you upfront a great deal and pull a sucker move on you by changing the payout. Then you're stuck unless you want to pay that huge surrender charge.
The number of complaints filed with state insurance regulators about people who sell index annuities around the country is huge. But state regulators often cannot or will not do anything to help those who were sold on false promises.
Here's a final word of warning: The pitch for index annuities often starts with an invite to a free lunch or dinner seminar to learn more. Believe you me, that is the most expensive meal you will ever eat. If you are past 60, index annuities are a danger to your financial health, your financial security and your long term ability to live independently. Kick that insurance person who tries to sell you that junk straight to the curb! *

From clarkhoward.com

It about sums it up!

 

[Bobrobb]

1. sheryljmoore.com 2. indexannuity.org 3. You are embarrassing yourself.

 

[Norwayguy]

Not hypothetical.
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I am just trying to see the defense to why someone would recommend such a product. I definitely replaced a bad product with a good one... and the one that "clearly don't understand" is the one who looks back at you in the mirror! Why do you misquote me? I never said the monthly cap was 0% - an unsaleable product! But I said it was 2.1% and that is why the cards are stacked against the customer in favor of the FIA company. You must be one of those guys that has no clue why FINRA wants to regulate FIA's too! You think that it is a conspiracy instead of understanding that this product is made to favor the company and not the client.
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Why no downside cap?The most the customer gets upside is 2.1%... the company can change the participatation rate at will... no downside cap!! No cards stacked against them you say?? In this case, He gained 2.1% when the market was at over 8%, he lost over 11% when the market lost the same amount.

If you care about your clients you will try to understand what I am saying. If you care about your pocketbook, you will argue against this enlightment.
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How can you say that they are not invested in the s&p? What does Allianz tell you that they are invested into? To me, that arguement does not even hold water. So they mirror the s&p; however, when the s&p makes 11% Allianz does not? How? Is Madoff involved? Too good to be true I would say! It is invested in something... once again - Allianz cannot pay high commission (although they do not anymore) without making $$$. In reality that just does not work.

I never even conseidered the dividends.

It sounds like the customer chose the monthly point to point crediting method...The upside is capped at 2.1 monthly so max potential was 25.2% but thats not reality...That crediting method does have no downside protection on a monthly basis meaning if in 1 month the index goes up 5 percent the client accounts for 2.1 and if the index drops 2.1% the next month then yes they end up with zero...but that is only one crediting option...I see many people take that option because they do the math 2.1*12= 25.2 while annual pt2pt and monthly averaging caps where probably in the 4-7% range over the same period of time.
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The whole purpose of this post was to understand the concept you guys use to sell these products. Unfortunately, all the class actions lawsuits will not convince that your clients are being victimized by these companies and their tactics. So defend what you have been told, don't try to understand, & maybe one day you will realize the truth in what I am saying. But, when I see what these products have done to Senior's life savings, it upsets me! They are realistically paying less than CD's without liquidity. This is an actual case - not something I made up.

Even the book "The AARP Guide to Retirement" explains that these companies can change their participation rates!

If you truly care about your clients... do the right thing and verify! Otherwise, you could be taking part in a scheme and these folks do not need to be taken advantage of. If you don't, I do not know how you sleep at night!!
- - - - - - - - - - - - - - - - - -


Factually wrong... Prove that!! And not with a post to some other "discussion." Possibly you can prove it with one talking about the class action lawsuits against an FIA company. Oh ya, is "factually wrong" too?

You really don't care if what I am saying is true. Your clients don't deserve you looking out for them. Probability & statistics prove the point... no "career sales school."

You are indoctrinated - now you know how Madoff pulled off his scam, he just hired people like you!
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It about sums it up!

You don't need to go to AARP to see that the company can change participation rates just open the policy and it will tell you that the company sets the participation rate annually, The rate can be decreased to a contractual minimum as stated in the policy, This is similiar to a straight fixed annuity except the participation rate is set in advance and locked in for the year while a straight fixed annuity can change the credited interest rate at any time as long as it is equal to or greater than the guaranteed minimum.

FIAs like any annuity is a long term vehicle, and as others have already pointed out are designed to return 1-3% above a regular fixed annuity over the contract period.

People putting money in these products need to understand that interest is not credited until the end of the policy year and if they are taking distributions should have that amount in the fixed bucket.

About your comment on FINRA. FINRA wanted to take over FIAs because of the dollars flowing into these products and their lack of control over them, not that they are securities or should be regulated as securities. B/Ds went along with it because it allowed them to require their reps to run the FIAs throught B/D compliance and more importantly get the commissions paid through the B/D grid. As someone who kicked FINRA to the curb this past January after a 11 year run with them I can only say good riddence.

 

[DHK]

Do you understand the Whole Life is invested primarily in bonds... UL policies a little riskier products... FIA's of course in the indexes.

[...]

What do you think, life insurance or annuities are not invested... "your ignorance is astounding!" They just don't sit in a CD or Money Market account!!

The CLIENT'S guaranteed funds are fully available and are NOT invested.

The COMPANY takes the reserve and invests it in the COMPANY'S general account. It's the COMPANY that has to generate the returns.

The CLIENT'S money is NEVER invested in securities or anything else... unless it is a variable policy.

BANKS DO THE SAME DAMN THING! Banks offer guaranteed insured accounts and take the funds and "invest" them and lend them out.

You are really out to try to build a watch when someone is only asking for the time.

I suspect a troll.
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People putting money in these products need to understand that interest is not credited until the end of the policy year and if they are taking distributions should have that amount in the fixed bucket.

This is worth quoting again.

 

[VolAgent]

Funny, calling someone an *** then proving your point by posting to some other discussion like that solved anything!! Do you understand the Whole Life is invested primarily in bonds... UL policies a little riskier products... FIA's of course in the indexes. ONLY in your world can Allianz pay high commissions to Agents, pay clients less than they deserve, and fool some to believe that the do not make 11% off this money!! What do you think, life insurance or annuities are not invested... "your ignorance is astounding!" They just don't sit in a CD or Money Market account!!

I'll say this very clearly for you, all general account products are invested in the same thing. They are primarily invested in Treasuries, corporate bonds, and commercial and residential mortgages. Exactly how just depends on the company and its CIO. Whole life, universal life, indexed universal life, fixed annuities and fixed indexed annuities are all general account products. Additionally, any money for reserving exists in the general account, this would include term insurance, and guaranteed riders on variable or fixed indexed annuities. Once the money goes into the general account, it is not designated for any particular product or policy, that's why its called the general account. The company takes all risk on its general account, the insured's only risk is that the company goes under. Contrast that with separate accounts, where the person's principal is always at risk.

Your lack of knowledge about basic insurance concepts is startling. Yes, plenty of people were hurt by FIAs due to poor agents, just as plenty are going to be in for a shock from their VA. The only difference between the agents who hurt people with a FIA and you is the product you'll use to do the damage with.

 

[Larry Tew]

KJ, coming onto the board and posting like a total ASSHOLE doesn't motivate anyone here to understand your position. Not only that, but quoting Clark Howard pretty much says it all.

Thanks for trying to save us all from the error of our ways, but no thanks.

 

[arnguy]

I think that hot Miami sun must be too much for KJ! It fried his brain.

 

[KJ in Miami]

KJ, coming onto the board and posting like a total ASSHOLE doesn't motivate anyone here to understand your position. Not only that, but quoting Clark Howard pretty much says it all.

Thanks for trying to save us all from the error of our ways, but no thanks.

Good point! I just figured I would start it off with a BANG! My apologies if I offended anyone. My zeal based on this client got the best of me.