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Old 04-14-2008, 04:34 PM   #21
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Way to compare the two. I am glad you can go from an annuity to rape in the same post.
If the shoe fits,...
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Old 04-14-2008, 04:35 PM   #22
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Ah here we go. Should liven up a bit soon.
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Old 04-14-2008, 04:41 PM   #23
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If the shoe fits,...

In some circumstances, true.
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Old 04-14-2008, 06:31 PM   #24
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Let's see if any of these annuity defenders can stick to facts:

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Originally Posted by hundoracer View Post

They are commonly used for people in their 50's and 60's who cannot afford to be in the market with risk to their principle when they are looking to retire in the future.
Umm, if someone 'cannot afford to be in the market with risk to their principle', there are plenty of alternatives. An annuity is not the only answer.

Quote:
Did they have it during 2001, 2002, 2003? If they did, they should be very thankful that they weren't in the market and lost nearly all of their monies.
See above, but... if they don't need their money, it's a paper loss. An investment with the appropriate risk level shouldn't drop far (if at all), and should be expected to bounce back.

If they do need the money - well, most annuities have big surrender fees - that is a loss, no?


Perhaps the parents are to blame for making in an inappropriate investment. But, as we've seen, the large commissions associated with these annuities tend to attract aggressive salesman who gloss over the negatives.

-ERD50
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Old 04-14-2008, 06:39 PM   #25
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I'd settle for banned from the forum.
Bright lights seem to work pretty well at shaking out any spammers.

Then maybe some lurkers learn a thing or two from the questions and (usual lack of) answers.


Note to hundoracer: 'we have many satisfied clients' line was already used this week.

-ERD50
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Old 04-14-2008, 06:47 PM   #26
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Hello,

First time poster even though I have been lurking around this site for over a year. I hate having to post without first introducing myself, but this is an emergency situation and I need some advise. I hope you all understand.

While watching Dateline tonight, I found out that my parents were one of the many victims who fell for the index annuity trap.

They retired a couple of years ago and moved to Italy. Over the next few months they were planning on making large withdrawals to fund their new home purchase. Tomorrow I'm going to call them to explain the situation they are in.

I have done some searching on the web and I found that there is a class-action lawsuit against Allainz. Would anyone know how my parents can join this lawsuit? Any advise is greatly appreciated. Thank You!
1. Dont freak out.
2. Find out what product they have and I can get the details for you.
3. It is probably not as bad as you think, it may have even been good for them.
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Old 04-14-2008, 06:54 PM   #27
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I watched the Dateline show and didn't think it did a good job of explaining what the pitch is to attract people in the first place (I missed the first few minutes). I never really even "got" how EIAs work. Based on the thread the other day, I had the impression that you "invest" in these things for a set period (e.g. 10 years) and then start drawing the annuity. But I didn't get that impression on Dateline. Do some of these things start paying the annuity immediately but promise to keep a floor on the payment amount? Or do they always require a holding period before payments begin?
On the Indexed annuities, the lowest commitment time frame I have seen is 6 years, most are around 10. The ones that are more than 10 like 14 plus have no benefit (IMHO) over the ones that are 10 or less. On most 10 year annuties you have full access to your funds and can choose a number of different options for payout, including lump sum after the 10 years.
On the funding of the annuity you can generally fund 1. immediate single premium 2. Any number of times during the first few years. They are all a little different.
Another type of annuity is a spia single premium immediate annuity. You give them some money they pay it back over a fixed period of time or over your life-you choose the pay out option. Statistically those who take the life payout option live longer than those that dont (something about getting free money). SPIA's are not indexed annuities.
Let me know if you have more questions.
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Old 04-14-2008, 06:59 PM   #28
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I'll bet you think most rape victims were just asking for it, right?
Not the same, I do not think rape vitctims would appreciate the comparision.
You have to choose and go through a number of steps to purchase an annuity.
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Old 04-14-2008, 07:06 PM   #29
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I've had an insurance license since 1989, so who are you talking to? Whether they made a bad choice or not is immaterial. The fact remains these products are WAY oversold and marketed to a demographic that has shown to be easily intimidated is the problem......

Anyone who says an EIA is the "same as a CD but with upside potential" needs to be shot.........
I do not think that annuities are oversold. I do think that many buy the wrong annuity from the wrong company.
I am a big believer in the time value theory of money. No one person should have 100% of there money in any one type of investment.
There are some great annuities out there with no cap 100% part & a low spread. I think compared to the market the last few years, annuities have been good for the average senior (who was in the right annuity = not the ones with the 11+ year surrender charges).
There are some great funds out there that I love, but when a client does not want to be in the market and still wants a potential for gain & can tie up a portion of there money for 6+ years, where else are you going to put their money?
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Old 04-14-2008, 07:26 PM   #30
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Let's see if any of these annuity defenders can stick to facts:



Umm, if someone 'cannot afford to be in the market with risk to their principle', there are plenty of alternatives. An annuity is not the only answer.

See above, but... if they don't need their money, it's a paper loss. An investment with the appropriate risk level shouldn't drop far (if at all), and should be expected to bounce back.

If they do need the money - well, most annuities have big surrender fees - that is a loss, no?


Perhaps the parents are to blame for making in an inappropriate investment. But, as we've seen, the large commissions associated with these annuities tend to attract aggressive salesman who gloss over the negatives.

-ERD50
What product that thas no risk would you put someones money in?
A person should never put all of there money in one product.
It is not considered a loss it is a penalty.
They can take out 10% a year with out penalty on most products.
Penaltys normally start at 10% and go down one % each year until the 10th year. Many even have a bonus of 5-10%. So it is feesable to have a 10% bonus annuity with a 10% surrender penalty. You gain interst even on the bonus money on many plans on day 1.

The only risk is if you have to have 100% of the money in the next few years. EIA are not for people that may at any moment need 100% of there money. If you can understand that, you can see that EIA are great for many people.


I am making no recommendations to any one product, seek advice from a financial professional.
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Old 04-14-2008, 07:30 PM   #31
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There are some great funds out there that I love, but when a client does not want to be in the market and still wants a potential for gain & can tie up a portion of there money for 6+ years, where else are you going to put their money?
You perhaps don't realize it yet but you happened on a lynching. That annuities are bad (period!) is part of received wisdom around here.

Annuities are sold as are most financial products by salesmen and saleswomen. Do we criticize motorcycle salespeople for selling a product that can easily get you killed?

Do we criticize the counter person at Tiffany for selling some guy a $100,000 diamond when he might have been able to get the girl he wanted for a quarter of that?

I have enough faith in capitalism that I am willing to let people make their own choices.

If the OP's parents are planning a retirement to Italy it doesn't sound as if anyone is likely to starve over this hideous wrong.

Ha
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Old 04-14-2008, 07:31 PM   #32
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Let's see if any of these annuity defenders can stick to facts:



Umm, if someone 'cannot afford to be in the market with risk to their principle', there are plenty of alternatives. An annuity is not the only answer.

See above, but... if they don't need their money, it's a paper loss. An investment with the appropriate risk level shouldn't drop far (if at all), and should be expected to bounce back.

If they do need the money - well, most annuities have big surrender fees - that is a loss, no?


Perhaps the parents are to blame for making in an inappropriate investment. But, as we've seen, the large commissions associated with these annuities tend to attract aggressive salesman who gloss over the negatives.

-ERD50
I never said that the annuity was the only answer, but thanks for playing.

I agree with you on the paper loss. The market only matters on one day. The day you take out your money.

I also agree with you on the attraction of over aggressive salespeople. However, there are over aggressive salespeople in every sales market.
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Old 04-14-2008, 07:33 PM   #33
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I think compared to the market the last few years, annuities have been good for the average senior
Also for the past few years, foreign stocks have been better than US stocks. And bonds have done better than US stocks. But that doesn't really tell me anything about how they'll likely behave in the future; the statement is true, but not helpful for assembling a long-term financial plan.

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There are some great funds out there that I love, but when a client does not want to be in the market and still wants a potential for gain & can tie up a portion of there money for 6+ years, where else are you going to put their money?
Treasury ladder? CD ladder?
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Old 04-14-2008, 07:35 PM   #34
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What product that thas no risk would you put someones money in?
US Treasury bills. Next question?
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Old 04-14-2008, 07:48 PM   #35
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Not the same, I do not think rape vitctims would appreciate the comparision.
I agree it was over the top.

What I was attempting to point out was that your fellow annuity advocate hundoracer, who said of the OP, "...IF his parents are in a bad spot, that it is due to their own stupidity", was guilty of blaming the victim.
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Old 04-14-2008, 07:55 PM   #36
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tb's are considered safe- yes, great return- no & go only up to one year.
04-14) 13:37 PDT WASHINGTON, (AP) --
Interest rates on short-term Treasury bills fell in Monday's auction with rates on three-month bills dropping to the lowest level in nearly four years.
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Old 04-14-2008, 07:55 PM   #37
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You have to choose and go through a number of steps to purchase an annuity.
[edited over the top language]
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Old 04-14-2008, 08:01 PM   #38
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I agree it was over the top.

What I was attempting to point out was that your fellow annuity advocate hundoracer, who said of the OP, "...IF his parents are in a bad spot, that it is due to their own stupidity", was guilty of blaming the victim.
Understood, We cannot always blame the client, there are some slime balls out there. I am surprised allianz just dropped that one guys appointment.
Good luck
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Old 04-14-2008, 08:07 PM   #39
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Please can the classless and crass language. We can talk about facts and have non emotionally based conversation.
If by "salesman" you mean talking about the facts, that is me. Thank you
Have a great week.
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