40 Yr Old with $500/month for Investment. Best Course of Action?

[scagnt83]

Isn't this an oxymoron? You're recommending dividend investing AND indexed annuities, which just so happen to not participate in dividends.

Also, if you're talking about National Western Life 's Ultra Value then don't forget to leave out the spread and that it's a monthly average annual reset. That's kind of important information.

I would call it diversity, not an oxymoron.

Indexed Annuities are not designed to compete with the stock market. They are designed to compete with fixed investments such as Bonds & CDs. So I dont know why it matters that the index annuity does not participate in dividends... it also does not participate in negative years in the market.

Also, Indexed Annuities are not directly invested in the Index... the index is a benchmark, not the direct investment. The insurer doesnt even directly invest in the chosen index. Its an options play.


NWL's Ultra Value currently does not have a spread for new business. The old spread was only 35bps.

Not sure why you are trying to pick apart empty's post. He is recommending one of the best performing indexed products on the market currently. NWL has a very good renewal history and the Ultra Value has a great track record of returns.

And being a forum full of agents, Im sure that empty assumed that if agents are interested they can look up the info about the product themselves.... or that they already are aware of the product and its features since it has been discussed on this forum multiple times recently... most things posted here assume a certain amount of industry knowledge from an existing agent...

Also, the correct phrasing would be "dont forget to include the spread" not "dont forget to leave out the spread".

 

[aclaro]

I'm not trying to pick it apart and no where did I say it was a bad product. I was just trying to clarify things. People come on here to learn and when you group dividend investing with indexed annuities it can get confusing. They are definitely two different buckets, like you said.

I find it frustrating when agents talk about index annuities and leave out material information. I understand that someone who is interested should do their own research. I just think it's important to include that the participation rate is for a monthly average annual reset. As for the spread I'm sure you're right as your reputation speaks for itself. I just took a quick peek at Annuity Rate Watch which said it had a spread of 65 bps on 8/29/2014.

You bring up a good point on the assumptions of this forum. Obviously, I'm fairly new to the forum. I've noticed you do a good job of putting in the extra couple sentences to explain things for people that are looking for knowledge and information on here. I wish more people did that. You'd have less insurance agents pulling out some participation rate or cap rate or guarantees without truly knowing and understanding the product they are talking about.

 

[scagnt83]

I just think it's important to include that the participation rate is for a monthly average annual reset. As for the spread I'm sure you're right as your reputation speaks for itself. I just took a quick peek at Annuity Rate Watch which said it had a spread of 65 bps on 8/29/2014.

Actually I was wrong. They seem to have brought the spread back as of 8/29 like you said. While that kind of sucks, its kind of a good thing because I get to call a client today and tell them "I told you so" (obviously not in those exact words... lol)

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What company did you purchase your IUL through?

I own some guardian whole life as well as some penn mutual whole life and I'm thinking its time to add some universal life in the mix.

Mine is through LFG. But I am considering adding a Midland IUL this year or next.

Midland/NA has one of the strongest products on the market right now imo. LFG still has a very strong product too.

 

[xrac]

40 yr old male in FL that has no upfront money but maybe a couple grand but has the ability to invest $500/month for the next 15 years. What would be his best option(s) in your opinion, and what could he expect the outcome to be?

You will get as many answers as there are participants on this forum. HOw about a WL or VUL policy to start with especially if he has no insurance now.