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Old 04-16-2008, 09:49 AM   #181
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They don't have to be directly investing in them to be getting hurt by them. Consider the mega-huge hedge funds that are shorting down the price of safe dividend paying stock.
True, but I don't have to leave my money in the market and if I take it out I don't have to pay anyone.

If I signed for an annuity and choose to get out I have to pay.

It's the cost of doing business I guess.
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Old 04-16-2008, 09:57 AM   #182
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True, but I don't have to leave my money in the market and if I take it out I don't have to pay anyone.

If I signed for an annuity and choose to get out I have to pay.

It's the cost of doing business I guess.
Again, not true. You could always move your money to a money market fund within the annuity. Granted it will probably pay a tad less than your typical money market, but probably more than your local bank savings account and definitely more than the zero you get on checking.
You can also go to money market, then dollar cost average back into the market. And all without being hit with any taxes from past gains, something you can't do with mutual funds.
BTW, for a tad higher in annual cost, you can have a VA that keeps your money totally liquid if you should decide to get out.
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Old 04-16-2008, 09:57 AM   #183
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Again, not true. You could always move your money to a money market fund within the annuity. Granted it will probably pay a tad less than your typical money market, but probably more than your local bank savings account and definitely more than the zero you get on checking.
You can also go to money market, then dollar cost average back into the market. And all without being hit with any taxes from past gains, something you can't do with mutual funds.
BTW, for a tad higher in annual cost, you can have a VA that keeps your money totally liquid if you should decide to get out.
ENOUGH WITH THE SHILLING!
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Old 04-16-2008, 10:05 AM   #184
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Again, not true. You could always move your money to a money market fund within the annuity. Granted it will probably pay a tad less than your typical money market, but probably more than your local bank savings account and definitely more than the zero you get on checking.
You can also go to money market, then dollar cost average back into the market. And all without being hit with any taxes from past gains, something you can't do with mutual funds.
BTW, for a tad higher in annual cost, you can have a VA that keeps your money totally liquid if you should decide to get out.
And if I would like to take the money and put it in my pocket??
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Old 04-16-2008, 10:09 AM   #185
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And if I would like to take the money and put it in my pocket??
They refer you to t he "customer retention" department, run by Ben Dover.
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Old 04-16-2008, 10:10 AM   #186
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And I thought is was Mike Hunt who ran that department.
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Old 04-16-2008, 10:13 AM   #187
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And if I would like to take the money and put it in my pocket??
Take the money out and put it in your pocket. Like I said, they have fully liquid VA's. Do you do this with mutual funds though?
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Old 04-16-2008, 10:14 AM   #188
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ENOUGH WITH THE SHILLING!
I'm not shilling. I'm trying to clarify. It seems silly to have misconceptions floating around. Get the facts, then decide if you hate them. But at least get the facts.
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Old 04-16-2008, 10:19 AM   #189
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Take the money out and put it in your pocket. Like I said, they have fully liquid VA's. Do you do this with mutual funds though?
So I'd just pay a tad more for this option. OK I'll take it if you can keep the fees under 4%.

I like to have some idea what I'm investing in and with my limited brain power annuities don't do it for me. I might as well read the Dead Sea Scrolls.
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Old 04-16-2008, 11:37 AM   #190
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Of course, a DIY VA wouldn't have a salesman telling you how smart you are to protect your assets. It also wouldn't have the commission.
VG and Fido already have them............
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Old 04-16-2008, 01:58 PM   #191
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Personally, I think that these guarantees must be extremely hard to properly hedge and that the writers of these things are taking significant risk.
If they are taking significant risk, wouldn't it make sense that I can benefit by being on the other side of that position?

For me this was an excellent thread, I learned a few things. May I ask, does anyone know of a source online to learn about the various living benefit riders other than reading the prospectus or calling an agent?
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Old 04-16-2008, 02:00 PM   #192
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If they are taking significant risk, wouldn't it make sense that I can benefit by being on the other side of that position?
Unless they succeed in blowing themselves up and defaulting.
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Old 04-16-2008, 02:05 PM   #193
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I would think the risk is actuarial risk. You could open up a "hit service" and save insurance companies millions!
I think I should write a Sue Grafton book "A is for Annuities". The main character will be a hit man for insurance companies that have risked too much on living benefits.
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Old 04-16-2008, 02:19 PM   #194
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Unless they succeed in blowing themselves up and defaulting.
That's true
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Old 04-16-2008, 09:07 PM   #195
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Unless they succeed in blowing themselves up and defaulting.
Brewer, do you see ING, Prudential, John Hancock, Pacific Life, or Hartford blowing up?
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Old 04-16-2008, 10:25 PM   #196
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Brewer, do you see ING, Prudential, John Hancock, Pacific Life, or Hartford blowing up?
I bet that I could ask "Do you think Bear Stern will blow up" last year and you would have said "no"...

But then again... JPM bought it all and guaranteed everything so in a sense as far as clients.... it did not blow up...
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Old 04-17-2008, 07:45 AM   #197
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Brewer, do you see ING, Prudential, John Hancock, Pacific Life, or Hartford blowing up?
ING as a whole? Nope, the Dutch bank and life companies are too strong, and many of the far flung subs elsewhere are solid (Canadian P&C, US Bank, etc.). I am "less sanguine" about the US life companies, but since they have put their name on them, I expect they would bail them out in times of trouble as they have in the past.

Prudential: Probably not. Its just so damn big, and they still have big life, etc. operations. But I am still waiting for the fallout from buying one of the least disciplined players in the VA industry (Skandia).

Hancock: Before they buyout, I could have seen it. As part of Manulife, I think it is highly unlikely.

Pac Life: I think highly of them, but despite the high ratings they are definately entrpreneurial. Sometimes that is good (made a couple billion off PIMCO), sometimes it isn't. It is worth remembering the shambles they were in in the early 90s. But ultimately I think t hey are OK.

Hartford: Probably OK. Perfect storm would probably be the VA thing hitting them while the P&C ops got hit with either a big cat loss or a persistently soft market.
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Old 04-17-2008, 08:49 AM   #198
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ING as a whole? Nope, the Dutch bank and life companies are too strong, and many of the far flung subs elsewhere are solid (Canadian P&C, US Bank, etc.). I am "less sanguine" about the US life companies, but since they have put their name on them, I expect they would bail them out in times of trouble as they have in the past.
VAs are only 5% of their total income from operations.......

Quote:
Prudential: Probably not. Its just so damn big, and they still have big life, etc. operations. But I am still waiting for the fallout from buying one of the least disciplined players in the VA industry (Skandia).
I think Pru is ok, but VA is a higher part of their total income.........I have heard 20% or so, now that they have American Skandia......

Quote:
Hancock: Before they buyout, I could have seen it. As part of Manulife, I think it is highly unlikely.
I agree........

Quote:
Pac Life: I think highly of them, but despite the high ratings they are definately entrpreneurial. Sometimes that is good (made a couple billion off PIMCO), sometimes it isn't. It is worth remembering the shambles they were in in the early 90s. But ultimately I think t hey are OK.
Pacific Life has the least amount of "promises" in their VAs........

Quote:
Hartford: Probably OK. Perfect storm would probably be the VA thing hitting them while the P&C ops got hit with either a big cat loss or a persistently soft market.
Moshe told me that 40% (yikes) of Hartford's income is from the annuity side............
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Old 04-17-2008, 08:50 AM   #199
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FD, income isn't the real determinant of risk. Its how much exposure they have via guarantees, and how aggressive thoese guarantees are.
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Old 04-17-2008, 08:54 AM   #200
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FD, income isn't the real determinant of risk. Its how much exposure they have via guarantees, and how aggressive thoese guarantees are.
I agree.....but if 40% of your income is from annuities, and 85% of all VAs are sold with the "guaranteed income riders", that might be a problem.........in the future...........
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