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Old 07-27-2012, 12:02 PM   #41
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[Mod Edit] Is it really that hard to understand?

And yes, the broker does get paid by the insurance company, not from the client, look on the balance after purchase.

Any broker that tries to persuade anyone to buy this is wasting their time. Find the buyers. There's plenty of intelligent people out there.
Yup it is, anything that has 100 pages of disclosures is over my head.

So where does the company get the money to pay the broker?

So you think the people who buy these are intelligent or are you looking for coconuts?
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Old 07-27-2012, 06:12 PM   #42
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Yup it is, anything that has 100 pages of disclosures is over my head.

So where does the company get the money to pay the broker?

So you think the people who buy these are intelligent or are you looking for coconuts?
Like any product, the insurance company makes money on the deal or they wouldn't offer it. They commensate brokers that make it happen. Ins companies use their vast resources to earn a spread, if you can do the same, and diversify that risk, by all means do it.

Absolutely some people that buy them are intelligent, why would you think otherwise? The underlying problem is so many of you simply don't understand the market for them. For people that want more risk discuss other asset classes.
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Old 07-27-2012, 06:16 PM   #43
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Even if all this blather were gospel truth, why on earth would you take credit exposure to an insurance company, pay a salesman's mortgage and get locked in for years and years when you can do the exact same thing on your own in about 15 minutes with expenses of less than $50 a year? Voila: Life, Investments & Everything: Rolling Your Own
Ok.. now what's the minimum guaranteed rate?

You see, no matter how great your strategy is, SOME people will prefer to have guarantees in place by a large worldwide insurance company.
Others will place all their trust in you and prefer you to work your voodoo (for fees).. neither is right or wrong, just different preferences.
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Old 07-27-2012, 06:49 PM   #44
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Ok.. now what's the minimum guaranteed rate?

You see, no matter how great your strategy is, SOME people will prefer to have guarantees in place by a large worldwide insurance company.
Others will place all their trust in you and prefer you to work your voodoo (for fees).. neither is right or wrong, just different preferences.
What the hell are you talking about? The linked article simply explains how you can do exactly what the insurer would do with your money, except if you DIY it costs a tiny fraction of what the insurer would take from your hide. There is no magic, the insurance policy is a wildly overpriced scam.
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Old 07-27-2012, 08:13 PM   #45
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What the hell are you talking about? The linked article simply explains how you can do exactly what the insurer would do with your money, except if you DIY it costs a tiny fraction of what the insurer would take from your hide. There is no magic, the insurance policy is a wildly overpriced scam.
Nice job. Now, when a particular client inquires about what the minimum interest guarantee is, what is the answer? Is the client wrong for asking?

This strategy can work excellent for people that want this. Not everybody wants this. Replacement to your idea does not equate to scam.. You'll have to try again.
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Old 07-27-2012, 09:01 PM   #46
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Now, when a particular client inquires about what the minimum interest guarantee is, what is the answer? Is the client wrong for asking?
Clients? This is predominantly a DIY forum, most of us strive to minimize the fees and commissions associated with being "clients".
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Old 07-27-2012, 09:28 PM   #47
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Clients? This is predominantly a DIY forum, most of us strive to minimize the fees and commissions associated with being "clients".
Which is great.. I'm simply countering the inappropriate bashing of products designed for people that don't fit this DIY category. Lots of blanket statements being made.

Also, no upfront fees, and no commission paid by the buyer. The insurance co pays the broker. It's probably a sore spot, but they have resources and opportunities that 99.999% of individuals don't have unless you're a billionaire.. the spread goes to insurance company and the broker, and client gets what they signed up for. There's no 'hidden fees'
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Old 07-27-2012, 09:44 PM   #48
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Which is great.. I'm simply countering the inappropriate bashing of products designed for people that don't fit this DIY category. Lots of blanket statements being made.

Also, no upfront fees, and no commission paid by the buyer. The insurance co pays the broker. It's probably a sore spot, but they have resources and opportunities that 99.999% of individuals don't have unless you're a billionaire.. the spread goes to insurance company and the broker, and client gets what they signed up for. There's no 'hidden fees'
Haaaahahahaha! Pull the other one: its got bells on.

If the agent and the insurer are eating well, there is really only one place that the meal is coming from: the sucker's policyholder's plate. Don't kid us or yourself. As for the ridiculous supposition that insurers have fabulous investment opportunities unavailable to the rest of us, I invite you to look at the portfolios of the industry. They by and large own a giant pile of investment grade bonds, mostly corporates. You can own those via an ETF or mutual fund for under 25BP annually (probably a lot less). Considering the massive overhead, regulatory expenses, premium taxes and various other expenses insurers have but individuals do not, I think we can safely say that the DIYer has the edge.

The minimum interest rate is up the the investor if you DIY. There is no shell game of raise the minimum rate, reduce the participation rate/lower the cap and make the rube policyholder think he is getting something special (he isn't). If you DIY you have control and everything is transparent. Best of all, you are not locked in for 5 to 12 years as you would be with an EIA/FIA. If you decide you would rather pursue another strategy, you can collapse the DIY structure at your convenience or simply wait for the options to roll off and the bond(s) to mature. Easy as pie. Try getting your money out of an FIA/EIA after a year without taking it in the bakehole in surrender charges.

And for the record, the only clients I have ever had have been institutional investors. To a person, all of those folks would have laughed until they peed themselves if I suggested they buy a EIA/FIA. At my current job I currently am in a role best described as a giant game of Whak-A-Mole where I am using the hammer. I rather think it fits my temperament.
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Old 07-27-2012, 09:47 PM   #49
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It's probably a sore spot...
Yes, it is.

You're one of a very long line of insurance/annuity salesmen who show up here convinced we are all ignorant and misguided when it comes to the virtues of non-SPIA annuities. We've seen the movie many, many times and can recite the script from memory.

While it is amusing to spar with you, it gets tiresome, so I'll sign off for now.
Don't worry, someone else will be along shortly to pick up where I left off. Why don't you have another glass of Kool Aid while you wait?

Never mind, I see brewer is already in the house...
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Old 07-27-2012, 09:51 PM   #50
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Yes, it is.

You're one of a very long line of insurance/annuity salesmen who show up here convinced we are all ignorant and misguided when it comes to the virtues of non-SPIA annuities. We've seen the movie many, many times and can recite the script from memory.

While it is amusing to spar with you, it gets tiresome, so I'll sign off for now.
Don't worry, someone else will be along shortly to pick up where I left off. Why don't you have another glass of Kool Aid while you wait?

Never mind, I see brewer is already in the house...

At least credit KRobby with truth in advertising. After all, the word "Rob" is prominently displayed on every post.
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Old 07-27-2012, 10:19 PM   #51
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At least credit KRobby with truth in advertising. After all, the word "Rob" is prominently displayed on every post.


Thank you, brewer.
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Old 07-27-2012, 10:27 PM   #52
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Like any product, the insurance company makes money on the deal or they wouldn't offer it. They commensate brokers that make it happen. Ins companies use their vast resources to earn a spread, if you can do the same, and diversify that risk, by all means do it.
Can you tell us about the vast resources the ins companies have and where they get them from?
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Old 07-27-2012, 10:30 PM   #53
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Haaaahahahaha! Pull the other one: its got bells on.

If the agent and the insurer are eating well, there is really only one place that the meal is coming from: the sucker's policyholder's plate. Don't kid us or yourself. As for the ridiculous supposition that insurers have fabulous investment opportunities unavailable to the rest of us, I invite you to look at the portfolios of the industry. They by and large own a giant pile of investment grade bonds, mostly corporates. You can own those via an ETF or mutual fund for under 25BP annually (probably a lot less). Considering the massive overhead, regulatory expenses, premium taxes and various other expenses insurers have but individuals do not, I think we can safely say that the DIYer has the edge.
Bond mutual funds are guaranteed? Clearly you're having a difficult time comparing apples to apples. You may be smart, and have excellent strategies that will help many people, but your common sense pertaining to what MANY PEOPLE actually want is disheartening. Further, you think the average person can safely diversify an individual bond portfolio?
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Old 07-27-2012, 10:31 PM   #54
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Old 07-27-2012, 10:35 PM   #55
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Can you tell us about the vast resources the ins companies have and where they get them from?
Money..more money, better deals.. it's pretty simple economics, banks do the same.
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Old 07-27-2012, 10:37 PM   #56
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Thank you, brewer.
Are CD's robbing people too?
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Old 07-27-2012, 10:38 PM   #57
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Bond mutual funds are guaranteed? Clearly you're having a difficult time comparing apples to apples. You may be smart, and have excellent strategies that will help many people, but your common sense pertaining to what MANY PEOPLE actually want is disheartening. You think the average person can safely diversify an individual bond portfolio?
I think most of the people who get talked into this kind of strategy don't have a goddamn clue what they are doing and are buying the sizzle rather than the steak. You will find vanishingly few of the generally reasonably sophisticated posters here will have anything to do with either an EIA or the roll your own version, and that is for a reason. Agents selling these things are simply preying on the ignorant.

If you wish to roll your own with this silly kind of strategy and be assured you get your principal, the best way to do it would be with a CD or one or more high grade corporates. Another alternative would be one of the target maturity date funds that are designed to be a diversified portfolio that all matures at once. Then use some or all of the interest on the fixed income to buy the options package on the equity index of your choice. That is all the insurers do with the policyholders money (what is left of it after they pay a fat commission, overhead expenses, dividends to shareholders, ivory handled backscratchers, etc.) when they sell these products.
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Old 07-27-2012, 10:44 PM   #58
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Money..more money, better deals.. it's pretty simple economics, banks do the same.

If it's so simple maybe you can explain it to me. Your answer is kind of funny.
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Old 07-27-2012, 10:56 PM   #59
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If it's so simple maybe you can explain it to me. Your answer is kind of funny.
You don't believe me or something? The poster I was chatting with pretty much explained it, not to mention of course you get better deals when you have more money to invest. If you can and want to do this on your own, diversify with your own money, tie up your own time, great.. if not, there shouldn't be shame to those that don't. We all win
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Old 07-27-2012, 10:58 PM   #60
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Money..more money, better deals.. it's pretty simple economics, banks do the same.

You made this statement, I'm just asking you to make sense out of it.
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