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Old 11-18-2010, 08:41 AM   #61
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I am a sucker for anything free. We got a flyer from Fidelity & Guaranty for $100, gift card for attending a free financial consultation. So, I thought it would be interesting to go just to hear the sales pitch. He was selling Allianz MasterDex X annuity. He told me that we could not review the contract until the sale. He said that there were no fees since we would not need any of the riders. It was an equity indexed annuity. He also slammed variable annuities, but said this one ( equity index ) was great. I know from reading this board how awful this product is, but I had a hard time spotting the flaws in his presentation.
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Old 11-18-2010, 08:46 AM   #62
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Yikes..........
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Old 11-18-2010, 08:52 AM   #63
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I know from reading this board how awful this product is, but I had a hard time spotting the flaws in his presentation.
Here's a hint:

Quote:
Originally Posted by rothlev View Post
He told me that we could not review the contract until the sale.
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Old 11-18-2010, 08:56 AM   #64
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He told me that we could not review the contract until the sale.
Sounds like Nancy ("we can't see what is in the healthcare bill until we vote it in")...

Be afraid, be very afraid.
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Old 11-18-2010, 09:29 AM   #65
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I wasn't going to buy anything. I was curious as to the presentation. Could it be true that there weren't any fees? He was also crediting the account with a 10% bonus, that was yours to cash out on in increments over 10 years. We both have pension income, I wanted to know what kind of product he would push. He didn't have any credentials at all , just finanical professional with some series license . One thing that was clear to me was someone could easily buy into this. Is it standard practice to not let you see a contract?
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Old 11-18-2010, 09:38 AM   #66
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I wasn't going to buy anything. I was curious as to the presentation. Could it be true that there weren't any fees? He was also crediting the account with a 10% bonus, that was yours to cash out on in increments over 10 years. We both have pension income, I wanted to know what kind of product he would push. He didn't have any credentials at all , just finanical professional with some series license . One thing that was clear to me was someone could easily buy into this. Is it standard practice to not let you see a contract?
There is a recapture schedule for the 10% bonus, you can't cash it out in increments without losing some of it. If you keep the contract for the full term, you keep the 10% bonus. There are no "fees" taken out of your principle, 100% goes into the contract. The agent does get paid a commission and the insurance company can charge a fee for optional riders that comes out of your principal, but the riders are not required. If you consider the insurance company's potential profit when the market goes up a "fee" then that would be a fee, but that's more of the price you pay for principal protection than what I would call a "fee" since nothing comes out of your principal.

That said, products with income riders are usually designed specifically for people who want to take a lifetime income and buying such a policy without the rider wouldn't make sense. There would likely be other products with higher caps or participation rates if you didn't want the rider.

I would be highly skeptical of anyone that wouldn't show you the actual contract before signing something. He probably doesn't want to show you because the contract could be 100+ pages. Every company has specimen contracts that agents can give to clients. I always give my clients a spec contract if they ask for it, which most do. Shouldn't be an issue, sounds like he's just playing hardball salesmanship...
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Old 11-18-2010, 09:41 AM   #67
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Is it standard practice to not let you see a contract?
Yeah; sort of like when you buy that new car but you can't look under the hood until you've signed all the paperwork ...

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Old 11-18-2010, 09:42 AM   #68
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If you want to get warmed up for reading the contract, try wading through this first:

Equity Indexed Annuity Report
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Old 11-18-2010, 09:56 AM   #69
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If you want to get warmed up for reading the contract, try wading through this first:

Equity Indexed Annuity Report
I just read through that and it basically says the person was sold an unsuitable product. If I had a penny for every time someone recommended the wrong product (not just for annuities), I wouldn't need to sell insurance. Of course, everyone knows that there has never been a RR that recommended an unsuitable strategy either. Not saying two wrongs make a right here, just that the pot often calls the kettle black.

I've always found it ironic that RR's chide insurance agents for the commissions on annuities, meanwhile they are pocketing 1% of total portfolio value for 10, 20, 30, 40 years and act like they're doing it for free. High comedy.
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Old 11-18-2010, 10:15 AM   #70
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I have not read through this thread so this may already be in here some place. I thought some of you might be interested in this if considering any kind of annuity.

Annuity Industry Gets Name Makeover - CBS MoneyWatch.com
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Old 11-18-2010, 10:17 AM   #71
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I wasn't going to buy anything. I was curious as to the presentation. Could it be true that there weren't any fees?
In my opinion, that's like saying a CD doesn't have any fees. We all know that the bank lends our money to someone at a rate higher than they pay on the CD. The difference covers the bank's expenses and profits, but we never know exactly how much the difference is.

That's different from a mutual fund where the deal is that they pass through the investment results less a stated fee.

So the company's expenses reduce your return with either format, but in one case it's visible and the other it isn't.
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Old 11-18-2010, 11:53 AM   #72
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ICould it be true that there weren't any fees?
No fees, just charges, expenses, recapture schedules... Gotta ask the right question. If you don't say the secret word, he won't tell you!

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He was also crediting the account with a 10% bonus, that was yours to cash out on in increments over 10 years.
Generous of him. But... TANSTAAFL!

That credit likely gets 'recaptured' if you don't leave everything in the account for the full term. Check the fine print in the contract he won't show to you.

Quote:
He didn't have any credentials at all , just finanical professional with some series license .
Probably a Series 6 National Association of Securities Dealers (NASD) license, required to sell you funds and certain kinds of annuities. It means his sales manager made him read the study guide one afternoon before the test

Quote:
One thing that was clear to me was someone could easily buy into this. Is it standard practice to not let you see a contract?
It might be HIS standard practice, but that by itself is a huge red flag, AKA "Run away! Run away!"
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Old 11-18-2010, 11:58 AM   #73
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"He also slammed variable annuities, but said this one ( equity index ) was great. "

Translation: this product has a higher commission.
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Old 11-18-2010, 12:47 PM   #74
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Probably a Series 6 National Association of Securities Dealers (NASD) license, required to sell you funds and certain kinds of annuities. It means his sales manager made him read the study guide one afternoon before the test
Actually, he doesn't even need a Series 6 to sell an EIA....just an insurance license..........
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Old 11-18-2010, 12:47 PM   #75
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"He also slammed variable annuities, but said this one ( equity index ) was great. "

Translation: this product has a higher commission.
He probably slammed it because he failed the Series 6..........
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Old 11-18-2010, 01:17 PM   #76
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On the guaranteed 8% annual gain, as the saying goes, if it sounds to good to be true, it usually is.

---

Been reading about the Vanguard Annuity Access service. A detailed discussion of it at Bogleheads if you want to read it.

Bogleheads :: View topic - New Vanguard/"Income Solutions" income annuity pro
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Old 11-18-2010, 01:23 PM   #77
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They sure love them SPIAS on Boglehead forum. Somone needs to tell them NOW is not a really good time to lock in a SPIA..........
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Old 11-18-2010, 01:32 PM   #78
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They sure love them SPIAS on Boglehead forum. Somone needs to tell them NOW is not a really good time to lock in a SPIA..........
Actually this has been mentioned (at bogleheads) on several occasions, due to current low interest rates.
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Old 11-18-2010, 03:51 PM   #79
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Actually this has been mentioned on several occasions, due to low interest rates.
Steve
Companies are still paying interest? I thought we were paying them now.
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Old 11-18-2010, 04:45 PM   #80
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I wasn't going to buy anything. I was curious as to the presentation. Could it be true that there weren't any fees? He was also crediting the account with a 10% bonus, that was yours to cash out on in increments over 10 years. We both have pension income, I wanted to know what kind of product he would push. He didn't have any credentials at all , just finanical professional with some series license . One thing that was clear to me was someone could easily buy into this. Is it standard practice to not let you see a contract?
Its a sleazy product being sold by a sleazy agent. Product and scumball aside, F&G (Effin' Gee) is a shaky company owned by an increasingly wobbly South African conglomerate. Even if I loved the product (I don't), I would buy it from a different insurer.
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