- 4,576
Those were Aviva products, correct?
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- Thread starter RunnerDude
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Those were Aviva products, correct?
- 10,330
No. Allianz. It was the product at the heart of the class action.
I used to see policies on a regular basis with 10% and 12% annualized returns over the 10 year stretch.
I get that the withdrawal features were not fully disclosed to some consumers. But the returns were outstanding.
Consumers forget features of policies all the time after just 1 year. We are talking 10 years time.
Very few people were actually "harmed" by those sales.
- 10,330
Oh, and I did come across upset consumers when I told them it required a 4 or 5 year drawdown to get out of the product.
But not a single one of them suffered financially because of it.
And a few of them admitted to remembering that feature after the initial shock of not being able to lump sum out.
My grandparents had one. It did 11%. Came from a CD earning 2%. Laddered the 5 payments into MYGAs. No big deal.
But not a single one of them suffered financially because of it.
And a few of them admitted to remembering that feature after the initial shock of not being able to lump sum out.
My grandparents had one. It did 11%. Came from a CD earning 2%. Laddered the 5 payments into MYGAs. No big deal.
- 10,330
I will say that some people suffered financially because of their own foolishness.
I know of a few who got upset and demanded out starting y11 and took a surrender charge doing so.
I know of agents who pushed people to do that as well.
I know of a few who got upset and demanded out starting y11 and took a surrender charge doing so.
I know of agents who pushed people to do that as well.
- 4,576
I think Aviva/Athene also had some products with BCA in the name related to Balanced Allocations.
While I agree the masses were not harmed by some of those products, there were plenty of very elderly people that cashed out 7-10 years after purchase & got back less than deposited.....stupid on their part, for sure. Also there were shady agents that lured them out of those contracts to a new contract with a bonus, etc. Lastly, there were death claims paid in some cases where the nearly 15-20 year surrender charge on some was applied.---I recall a carrier possibly National Western that issued such a product to an 83 year old. Many of the suitability laws & carrier suitability rules on liquidity, etc came from some of these cases. So, I dont necessarily agree that very few were harmed.
If we know that a microscopic fraction of buyers ever annuitize their contracts, how did some of those 2 tiered annuities benefit most that were buying them for tax deferral & long term savings when the 1st tier of the contract many times only got credited 1% on 87.5% of their deposit. Not to mention the higher surrender charge & longer surrender charge schedules to offset the bonus credit to Tier 2 income bucket & higher commission.
I am also not saying that some didnt benefit by annuitizing to get the money out, but those annuity payouts were pretty low rates also when you annuitized to receive the 2nd tier bucket of annuitization money
I am a much, much bigger fan of the income riders today
- 10,330
I was speaking to that specific Allianz policy. It often gets the most heat, but it was the most consumer friendly out of the whole class action.... and had the best returns out of probably the entire FIA market.
People surrendering policies early does not make it a bad policy. Its a bad decision by the consumer or the agent pulling their strings.
Most of what you described are bad actors. Not bad products.
But the situation did bring about some very needed change in the industry. I was a green agent at the time so it was interesting being on the tail end of all that.
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National Western is possibly the worst indexed annuity carrier that exists. Their whole business model revolves around them ripping people off and keeping their money longer than promised.
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- 10,330
Oh, and yeah, one of those acronyms was the Aviva product I think. I was never a big fan of Aviva. But they had some decent riders at one point considering the marketplace at that time.
- 4,576
Aviva became or was acquired by Athene, right?
- 10,330
- 5,778
Yeah, I think they gave the farm away on those that's why they pulled them like they did.
