Scroll down for a discussion on Equity Index Annuity the best ? within the Annuities Forum.
Originally Posted by dannysdad
I'm asking, more specifically, what size of bonus are you using and what is the guaranteed minimum interest? Say the bonus ...
I'm asking, more specifically, what size of bonus are you using and what is the guaranteed minimum interest? Say the bonus is 10% and the min. is 3%, on a 10 year product. The avg. would be 4%. This is much worse than a 10 year fixed annuity.
What does a 10 year fixed pay that you are referring to? You are simply adding up total interest for an average without consideration for the compounding affect of the initial 10% bonus?
You may be right, but I have to dig out a spreadsheet and figure it or look at the effective interest rates the companies post with the products. There are other considerations, but you bring up a good point.
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I dug out an old spreadsheet and assuming interest rates on the 10% bonus annuity remain static at 3% and straight fixed annuity at 5%, the fixed overtakes it at year 8.
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Chuck
If you think your boss is stupid, remember: you wouldn't have a job if he was any smarter.”
What does a 10 year fixed pay that you are referring to? You are simply adding up total interest for an average without consideration for the compounding affect of the initial 10% bonus?
You may be right, but I have to dig out a spreadsheet and figure it or look at the effective interest rates the companies post with the products. There are other considerations, but you bring up a good point.
If you compound the hypo FIA, you get 4.8%. If you compound a 5.6% fixed annuity, you get a hair over 7%. I wish it were the other way around, as I would rather have the FIA commission.
With most products (nearly all, as a matter of fact), if you leave before the contract period the bonus is lost. So, a bonus is fine if you stay for the long haul.
There are also products that take this even a step further: you have to take an income stream for some period, usually 10 years, or you lose the bonus.
I know a lot of you don't like Allianz, but at least with their latest product the 10% bonus vests at 1% per year. Since it is a 10 year product and the penalty is around 6% in the sixth year, I'm looking at this as having a 6 year walkaway if someone really hated it. The vested bonus and the penalty would be about the same in year 6.
So, in the past I haven't made a big deal about the bonuses because I always looked at bonuses as being icing on the cake.
That whole world is different because of the economy and because there are some decent products now with genuine bonuses.
What companies lose the bonus ? None that I deal with. And the companies I deal with pay full accumulation value on death if prior to maturity, and they pay the death benefit immediately, not over 5 years like many do.
Vesting a bonus? Why is that necessary if you sold the right product to begin with? I never put money into a long term annuity unless that money is not going to be touched except for the 10% annual penalty free withdrawals.
I don't deal with Allianz because of those kinds of things. The annuities I wrote with AVIVA (American Investors) paid full accumulated value on death. If you surrendered early you kept the bonus minus a surrender charge and MVA. The fixed also have similar surrender charges. Midland pays full accumulated value on death, including the bonus with no vesting nonsense.
What am I missing?
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Originally Posted by dannysdad
If you compound the hypo FIA, you get 4.8%. If you compound a 5.6% fixed annuity, you get a hair over 7%. I wish it were the other way around, as I would rather have the FIA commission.
Understood, but the FIA's are paying a little over 3% which offsets that some. I do sell Fixed products, but shorter term 3 to 5 year stuff. I understand where you are going, but the conversation I was involved in had more to do with the Index option and whether it was important to me. The indexing does add another dimension and adds value, I just have difficulty convincing people to move to the index strategy in the uncertain economy we have had for the last few years.
If I lose the indexing option to the BD's, I will only be selling FA's, and probably without the bonus.
Last edited by patch36 : 10-12-2008 at 07:27 PM.
Reason: Automerged Doublepost
What companies lose the bonus ? None that I deal with. And the companies I deal with pay full accumulation value on death if prior to maturity, and they pay the death benefit immediately, not over 5 years like many do.
Vesting a bonus? Why is that necessary if you sold the right product to begin with? I never put money into a long term annuity unless that money is not going to be touched except for the 10% annual penalty free withdrawals.
I don't deal with Allianz because of those kinds of things. The annuities I wrote with AVIVA (American Investors) paid full accumulated value on death. If you surrendered early you kept the bonus minus a surrender charge and MVA. The fixed also have similar surrender charges. Midland pays full accumulated value on death, including the bonus with no vesting nonsense.
What am I missing?
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Understood, but the FIA's are paying a little over 3% which offsets that some. I do sell Fixed products, but shorter term 3 to 5 year stuff. I understand where you are going, but the conversation I was involved in had more to do with the Index option and whether it was important to me. The indexing does add another dimension and adds value, I just have difficulty convincing people to move to the index strategy in the uncertain economy we have had for the last few years.
If I lose the indexing option to the BD's, I will only be selling FA's, and probably without the bonus.
It appears that you understand that the fixed annuity is the better deal for the client, but, for some reason, you won't do it. Would that reason be the commission?
It isn't that simple. The conversation was about Indexing. In the case of most of my customers and the fact that they are unwilling to move to the Indexed Strategies, the pure fixed may have been best, but there are other factors. In hindsight, some of these customers MAY have been better served with a pure fixed annuity, but not in every case. In hindsight many of these customers would have been better served with a Single Premium Life Policy since they will never touch their money. Hindsight is great.
I have as many clients who have done better with the Bonus Annuity as they would have to this point with the Fixed. In the extreme longterm, and if they do not die or take out the money for Nursing Home or Terminal Illness, or ... yes, they might be better off mathematically with the Fixed Only Product. Remember, most of my clients are not Boomers, they are older. Many will not live the full term of the contract and the products I write pay an immediate death benefit, including the bonus and all of the interest. I write very few income annuities or annuities the client expect to outlive. Unlike the Allianz products, the ones I sell pay full accumulated value immediately upon death and have penalty free withdrawals of 10% a year, nursing home and terminal illness waivers, ect...
You seem to want to paint me as commission driven without concern for the customer? Perhaps you are judgemental without knowing all the facts about my clients and my ethics? I understand your conclusion and opinion, but there is more to the story, and I pride myself on what I have done for my clients.
It isn't that simple. The conversation was about Indexing. In the case of most of my customers and the fact that they are unwilling to move to the Indexed Strategies, the pure fixed may have been best, but there are other factors. In hindsight, some of these customers MAY have been better served with a pure fixed annuity, but not in every case. In hindsight many of these customers would have been better served with a Single Premium Life Policy since they will never touch their money. Hindsight is great.
I have as many clients who have done better with the Bonus Annuity as they would have to this point with the Fixed. In the extreme longterm, and if they do not die or take out the money for Nursing Home or Terminal Illness, or ... yes, they might be better off mathematically with the Fixed Only Product. Remember, most of my clients are not Boomers, they are older. Many will not live the full term of the contract and the products I write pay an immediate death benefit, including the bonus and all of the interest. I write very few income annuities or annuities the client expect to outlive. Unlike the Allianz products, the ones I sell pay full accumulated value immediately upon death and have penalty free withdrawals of 10% a year, nursing home and terminal illness waivers, ect...
You seem to want to paint me as commission driven without concern for the customer? Perhaps you are judgemental without knowing all the facts about my clients and my ethics? I understand your conclusion and opinion, but there is more to the story, and I pride myself on what I have done for my clients.
I love commissions and I'm in business to make money. I know you can be commission driven and concerned for the customer, at the same time. In your case, I think you step over the line. You are misleading people about what to do with their money. Do you let them know that if they do "indexing", they will have ZERO money in the stock market? Do you explain to them that they will make more money in a fixed annuity? How would you explain yourself in open court? Aren't you afraid that someone like me will meet your client and explain what you have done? You should be.
Guys like you are the reason that the regulators use to justify making these things securities. Nice job.
Fixed Annuities are saving vehicles not investment vehicles.
They can be indexed to the market indexes to allow you to return a greater interest rate potentially than a fixed product like a CD could.
They are not investments.
The definition of an investment is a vehicle where your money is placed at risk to potentially gain greater than average returns. There is also the potential that you could lose your money.
In a fixed annuity there is no risk hence it is not an investment.
Guys like you are the reason that the regulators use to justify making these things securities. Nice job.
It's nice to see "dannysdad" beating the crap out of someone other than me for a change. Patch36, he's all yours now.
He wants me to commit suicide. Lord knows what he will want you to do! If nothing else, I'm sure he will report you to your DOI. It's what he does.
Good luck with him. You will need it! Actually, just get a good lawyer and let the law firm deal with him in their own good time. That's what I'm doing. It might work for you as well... and anyone else that this miscreant turns his sights on.
I'm hoping he'll beat up on stibroker (Scott Thilgen). I can't wait to see the graphics he comes up with here! (Try the link. Hell of a good song! Wonder who does it. Anyone know?)
I love commissions and I'm in business to make money. I know you can be commission driven and concerned for the customer, at the same time. In your case, I think you step over the line. You are misleading people about what to do with their money. Do you let them know that if they do "indexing", they will have ZERO money in the stock market? Do you explain to them that they will make more money in a fixed annuity? How would you explain yourself in open court? Aren't you afraid that someone like me will meet your client and explain what you have done? You should be.
Guys like you are the reason that the regulators use to justify making these things securities. Nice job.
You certainly put yourself on a pedestal. You have no idea how I conduct business and what I have told my customers. You have ascertained I am a liar, thief and scoundrel from a simple conversation. You assume that there is no place for the products I sell and that you are the only one entitled to an opinion. Billions of dollars are sold each year in the same products I choose to sell. I explained why they are suitable to those I sell them to and I also explained that I sell a variety of annuities. This particular discussion was about FIA's which you obviously think are not a good product. We disagree, but you could not contain yourself without making your typical personal attacks.
As I said, I meet with all of my clients each year and explain the Indexing Strategies and the choices they have. Because of their fear of the markets and economic uncertainty they generally choose to remain in the Fixed Account. I don't know how to explain it to you so you understand that I do educate my customers, but their choice is typically not to move out of the Fixed Account. Am I doing a poor job by not trying to get them to move into a Fixed Strategy? It is my job to inform them, not coerce them, but they understand they have the choice which is something they do not have in a Fixed Interest Only Annuity.
I sincerely doubt any of my customers would choose to work with or trust an arrogant and pompous ass such as yourself, but give it a shot if you would like.
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Originally Posted by Paradigm
Fixed Annuities are saving vehicles not investment vehicles.
They can be indexed to the market indexes to allow you to return a greater interest rate potentially than a fixed product like a CD could.
They are not investments.
The definition of an investment is a vehicle where your money is placed at risk to potentially gain greater than average returns. There is also the potential that you could lose your money.
In a fixed annuity there is no risk hence it is not an investment.
Exactly P. FIA's offer strategic choices, FA's, don't, but at the end of the day they are a Savings Vehicle, not an investment.
Last edited by patch36 : 10-12-2008 at 11:27 PM.
Reason: Automerged Doublepost
If you compound the hypo FIA, you get 4.8%. If you compound a 5.6% fixed annuity, you get a hair over 7%. I wish it were the other way around, as I would rather have the FIA commission.
You certainly put yourself on a pedestal. You have no idea how I conduct business and what I have told my customers. You have ascertained I am a liar, thief and scoundrel from a simple conversation. You assume that there is no place for the products I sell and that you are the only one entitled to an opinion. Billions of dollars are sold each year in the same products I choose to sell. I explained why they are suitable to those I sell them to and I also explained that I sell a variety of annuities. This particular discussion was about FIA's which you obviously think are not a good product. We disagree, but you could not contain yourself without making your typical personal attacks.
As I said, I meet with all of my clients each year and explain the Indexing Strategies and the choices they have. Because of their fear of the markets and economic uncertainty they generally choose to remain in the Fixed Account. I don't know how to explain it to you so you understand that I do educate my customers, but their choice is typically not to move out of the Fixed Account. Am I doing a poor job by not trying to get them to move into a Fixed Strategy? It is my job to inform them, not coerce them, but they understand they have the choice which is something they do not have in a Fixed Interest Only Annuity.
I sincerely doubt any of my customers would choose to work with or trust an arrogant and pompous ass such as yourself, but give it a shot if you would like.
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Exactly P. FIA's offer strategic choices, FA's, don't, but at the end of the day they are a Savings Vehicle, not an investment.
I just can't figure out why you would use a FIA over a FA, if you're not going to use the FIA for what it was intended for and the client will make less money. I don't doubt that you explain things to your clients. I'd bet anything you wouldn't do it with a regulator in the room, though.
If you come here and admit to doing things that are so blatantly out of line, don't be so shocked that you are called on it.
Also, it's funny that Al3 chimes in. I called him out on giving investment advice on his website and he has removed that material from the site. He should be thanking me for keeping him out of trouble and you should be thankful, too.
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Originally Posted by padthaiforlunch
Which fixed product has over 7% for ten years?
Figure it out for yourself, rookie.
Last edited by dannysdad : 10-13-2008 at 08:04 AM.
Reason: Automerged Doublepost
You have selective memory and preconceived ideas. I do what I do for the right reasons, I sell the right products to the right people after a careful analysis of their situation, and I don't need to justify myself to you. Based on our short and very general discussion you have ignored the totality of my statements, taken what I have said out of context and decided to paint me with your broad brush. I hope we can agree to disagree.
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Originally Posted by padthaiforlunch
Which fixed product has over 7% for ten years?
Creative math, compounding, and wishful thinking. It isn't a guaranteed rate.
Last edited by patch36 : 10-13-2008 at 08:50 AM.
Reason: Automerged Doublepost
You have selective memory and preconceived ideas. I do what I do for the right reasons, I sell the right products to the right people after a careful analysis of their situation, and I don't need to justify myself to you. Based on our short and very general discussion you have ignored the totality of my statements, taken what I have said out of context and decided to paint me with your broad brush. I hope we can agree to disagree.
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Creative math, compounding, and wishful thinking. It isn't a guaranteed rate.
Patch, first, I used the 7% number because YOU wanted to know what it would be using YOUR creative math. Go look at your own post.
YOU are the one who is not using EIA's for their intended use. YOU have admitted it. Why shouldn't YOUR integrity be called into question? You choose a strategy that pays you MORE and pays your client LESS than the logical alternative.
Unless you come back with some lame attempt to justify what you and I both know what you are doing, I have nothing more to say on this topic. Peace.
You don't like things being taken out of context and spun? We can agree on that, but your figures offered no context and were contrived to make a flawed point. I too am done, with you. Find someone else to spew your venom at.
You don't like things being taken out of context and spun? We can agree on that, but your figures offered no context and were contrived to make a flawed point. I too am done, with you. Find someone else to spew your venom at.
Here's some math for you...
Your FIA: $110,000 (includes 10% bonus) pays 3%/year. In ten years it will be worth $147,831.
Fixed annuity: $100,000 pays 5.5%/year. In ten years, it will be worth $170,814.
Go ahead and explain how the math works in favor of your client. Your attacks on my character will not change the math.
This year I sold mostly Aviva. So, yes, I'm well familiar with Aviva. Allianz had the sense to drop the MVA. Try explaining the MVA to a client. Worse yet, watch their face drop when you present the client with an MVA disclosure to sign. It's crazy since the MVA does not help the company that much.
Next year I suspect I will be selling mostly Allianz (and some others) since Allianz took a bath because Aviva came out with some better products. Now it is reversed, at least temporarily.
As for bonuses: can anyone name any company that gives a client a 10% bonus and then lets them keep it if they bail short of the commitment time? Of course not. !0% bonus, 10 year commitment period, declining penalty each year, keep 1% of bonus each year whether you stay or not. Full vesting as an immediate death benefit with choice to heirs of stretching full 12% minimum guarantee or taking 6% minimum growth for time investment was held as a lump sum. How can it get much better than that?
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One more thing on MVA (market value adjustment):
Once a client looks at a 4-page disclosure with all sorts of graphs, facts and figures, they then ask "What the hell is this?" I then explain it as simply and truthfully as possible:
"If the insurance company thinks you made too much and they made too little (if you leave the contract early), then they can take back some of what you made."
Nice thing to have to explain.
Last edited by Charpress : 10-13-2008 at 10:59 AM.
Reason: Automerged Doublepost
Where are the gains from the index included in your math.
Definitions:
IRAs etc are for ACCUMULATING wealth.
Annuities are for DISTRIBUTING wealth.
Does this clear things up???
If you had read the whole thread, instead of chiming in to hear yourself talk, you would know that this scoundrel is putting money into FIA's WITHOUT using any index as a crediting method. All the client gets is the "bonus" and the minimum guarantee.
Also, it's funny that Al3 chimes in. I called him out on giving investment advice on his website and he has removed that material from the site. He should be thanking me for keeping him out of trouble and you should be thankful, too.
Figure it out for yourself, rookie.
Since you brought it up, let me update the issue.
Because you claimed you turned me into the DOI, my lawyer wanted the site vetted by a "recognized" expert in prep for whatever civil action, if any, she is going to suggest with respect to you.
All your posts here and to every other board on the net is being compiled. These things take time. I don't think any civil action can (or should) be taken against you... unless you have deep pockets... which I doubt, but I'll wait to see what she suggests before I make a final decision.
Your postings in the "Question about a shotgun" thread suggesting I commit suicide has raised a lot of interest this morning such that she thinks all your posts should be sent to the law enforcement authorities for profiling. She thinks you could be the next Virginia Tech killer.
I told her she was exaggerating, that you are just a web-board wise-guy venting some steam, but I was surprised how many people she told me have made postings about violence on the web and have later done something reprehensible.
You really stirred up a hornets nest. Sam told me Sunday that he would honor a court order to 'out' you and my lawyer told me this morning that with your postings suggesting suicide that she can easily get one... although if she turns this over to the feds, it would be their case, not ours.
Personally, I don't want any of this but she thinks you are dangerous and as an officer of the court she sees a responsibility of some kind here to protect the public.
You've cloaked yourself quite well. We've not been able to identify "dannysdad."
At first I thought it was the guy here having some "fun" like he did when he took the identity of "pre-paid-legal" to post here. (I won't "out" him but his mistake was using the same "birthday" on both public profiles on this board.)
Sam has told me he would safeguard your identity (until a court order) but he said you are definitely NOT that other guy... and I agree. That guy is not cloaked and would never go so far as to request someone to kill themselves.
But someone here has... and from my private mail a lot of people think that person went too far.
I don't think anything will come of it as a civil case... me vs. you... but if she sends your posts to the FBI or homeland security, it's way, way out of my hands.
If she thinks, as an officer of the court that you are what she calls a "clear and present danger" (not sure what she means by that) there is nothing I can do to stop her.
I respectfully suggest that you talk with your own lawyer for advice before this spins out of control for you... perhaps for both of us.
The one thing in your favor is that the feds move like snails so you (and your lawyer?) have plenty of time to figure out what you will want to do or say... if anything.
I have to admit, you have me a bit un-nerved. It has been almost ten years since I received something that might resemble a veiled death threat. I don't feel as safe today as I felt before you posted this suicide thing. You sure got MY attention... along with that of a bunch of others.
I don't know why you wanted to go there... and maybe it is important we find out in case you are indeed dangerous. Like I say, I just don't know.
I've written a lot of dumb, stupid things in my 45+ years as a writer (starting on my high school newspaper,) but never that someone should be hurt or killed. Those are boundaries you just don't cross... ever.
If you had read the whole thread, instead of chiming in to hear yourself talk, you would know that this scoundrel is putting money into FIA's WITHOUT using any index as a crediting method. All the client gets is the "bonus" and the minimum guarantee.
Does this clear things up???
..and if you had not made assumptions you would know that my clients are choosing not to participate in the Indexed strategies because of concerns about the economy, not because of my 'putting' them anywhere. They have the option to move into the Index Stratgies each year, but all the bad news and predictions of bad things coming have kept them, by their choice, in the Fixed side. My customers for the last year or two that have chose not to participate in the Index have made 'only' the Fixed Interest, but they have the option and my annual review to educate them to the possibilities of the Index strategies in the years to come.
You were looking to pick a fight and prove a point based on your misconceptions and attitude. I apologize for any part I may have played in your misunderstanding. I always do what is best for my clients based on their individual situation and goals. Your name calling and history of wishing death on those who don't agree with your preconceptions and misconceptions speak volumes to your character and rationalization of information. I only wish I were as ethical and knowledgeable as you think you are.
Re: Equity Index Annuity the best ?
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