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Re: immediate annuity (again)
Old 09-26-2006, 10:50 PM   #141
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Re: immediate annuity (again)

From Google search #1 return:
-------------------------------------------
"Definition of Investment"
From Econterms

Definition: Investment is defined as any use of resources intended to increase future production output or income.


A logical definition of investment

in·sur·ance* (n-shrns)
n.
1.
a. The act, business, or system of insuring.
b. The state of being insured.
c. A means of being insured.
2.
a. Coverage by a contract binding a party to indemnify another against specified loss in return for premiums paid.
b. The sum or rate for which such a contract insures something.
c. The periodic premium paid for this coverage.
3. A protective measure: biking helmets that provide insurance against a head injury.

Seems to me IA's meet both defintions
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Re: immediate annuity (again)
Old 09-26-2006, 10:59 PM   #142
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Re: immediate annuity (again)

Quote:
Originally Posted by Running_Man
From Google search #1 return:
-------------------------------------------
"Definition of Investment"
From Econterms

Definition: Investment is defined as any use of resources intended to increase future production output or income.


A logical definition of investment



















in·sur·ance* (n-shrns)
n.
1.
a. The act, business, or system of insuring.
b. The state of being insured.
c. A means of being insured.
2.
a. Coverage by a contract binding a party to indemnify another against specified loss in return for premiums paid.
b. The sum or rate for which such a contract insures something.
c. The periodic premium paid for this coverage.
3. A protective measure: biking helmets that provide insurance against a head injury.

Seems to me IA's meet both defintions
Not in the eyes of the SEC...............
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Re: immediate annuity (again)
Old 09-26-2006, 11:49 PM   #143
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Re: immediate annuity (again)

Running_Man: I agree. Here's an article I visit now and again:

http://www.gold-eagle.com/editorials...din041506.html
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Re: immediate annuity (again)
Old 09-27-2006, 03:48 AM   #144
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Re: immediate annuity (again)

An annuity is exectley the same as life insurance but in reverse.

life insurance is insurance against dying

an annuity is insurance against living

my vote annuities are insurance not an investment.
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Re: immediate annuity (again)
Old 09-27-2006, 07:52 AM   #145
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Re: immediate annuity (again)

I'll say one thing, discussing anything concerning annuties seems to be as controversial as any topic on politics or religion.
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Re: immediate annuity (again)
Old 09-27-2006, 09:53 AM   #146
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Re: immediate annuity (again)

Quote:
Originally Posted by DOG52
I'll say one thing, discussing anything concerning annuties seems to be as controversial as any topic on politics or religion.
agreed................
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Re: immediate annuity (again)
Old 09-27-2006, 10:27 AM   #147
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Re: immediate annuity (again)

Quote:
Originally Posted by Running_Man
My question is in that circumstance what is the best defense for that? *Is it IA's? *Stocks in that scenario would be an unmitigated disaster, yet there is an equal chance the US might try and inflate it's way out of the problem such as some South American countries did with their Social Security problems, in that case IA's are the absolute worse investment because even with 10% inflation protection you are not protected.
Probably not an IA, if you are worried about extreme scenarios like Japan and Argentina. Most of the Japanese life insurers are scraping along by the skin of their teeth, hoping like hell interest rates rise some day. None of them are what I would consider to be an attractive credit risk. In a hyper-inflationary scenario/default a la Argentina, you'd also be looking at the failure of many/most life insurers.

But I think you are definately into tinfoil hat territory...
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Re: immediate annuity (again)
Old 09-27-2006, 10:36 AM   #148
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Re: immediate annuity (again)

Quote:
Originally Posted by mathjak107
An annuity is exectley the same as life insurance but in reverse.

life insurance is insurance against dying

an annuity is insurance against living

my vote annuities are insurance not an investment.
I think some of you boys are a bit narrow minded on this one. Even the insurance companies think there products are often both insurance and investment. Here's the old standard for insurance- whole life:

"Advantages of a Whole Life Insurance Policy
Interest accumulated through the investment portion of the policy is tax-free until withdrawn. "
From

http://www.lifequote.com/htm/wholelife.asp

Or here is another one, this about fixed annuities:

fixed annuity
Definition

An investment vehicle offered by an insurance company, that guarantees a stream of fixed payments over the life of the annuity. The insurer, not the insured, takes the investment risk. also called fixed dollar annuity.

The above from:

http://www.investorwords.com/1987/fixed_annuity.html

The italics are mine, to help you boys find the important parts.

Ha

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Re: immediate annuity (again)
Old 09-27-2006, 10:40 AM   #149
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Re: immediate annuity (again)

Quote:
Originally Posted by HaHa
I think some of you boys are a bit narrow minded on this one. Even the insurance companies think there products are often both insurance and investment. Here's the old standard for insurance- whole life:

"Advantages of a Whole Life Insurance Policy
Interest accumulated through the investment portion of the policy is tax-free until withdrawn. "
From

http://www.lifequote.com/htm/wholelife.asp

Or here is another one, this about fixed annuities:

fixed annuity
Definition

An investment vehicle offered by an insurance company, that guarantees a stream of fixed payments over the life of the annuity. The insurer, not the insured, takes the investment risk. also called fixed dollar annuity.

The above from:

http://www.investorwords.com/1987/fixed_annuity.html

The italics are mine, to help you boys find the important parts.

Ha
Well...............it DOESN'T MATTER what I think, the regulators didn't fine NML and a renegade rep $1 million for "failure to supervise", when he was running seminars touting NML's split dollar insurance as a tax-deferred investment vehicle............. apparently they thought whole life WAS NOT an investment..............
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Re: immediate annuity (again)
Old 09-27-2006, 10:58 AM   #150
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Re: immediate annuity (again)

Ha, I think that both investments and insurance are just discounted cash flows. The main difference in my ind is that I expect an investment to be a positive NPV proposition, while I expect (and hope) that insurance will be a negative NPV proposition.
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Re: immediate annuity (again)
Old 09-27-2006, 11:13 AM   #151
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Re: immediate annuity (again)

Quote:
Originally Posted by brewer12345
Ha, I think that both investments and insurance are just discounted cash flows.* The main difference in my ind is that I expect an investment to be a positive NPV proposition, while I expect (and hope) that insurance will be a negative NPV proposition.
Good point.......... Now Ha has his answer.................
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Re: immediate annuity (again)
Old 10-09-2006, 12:11 PM   #152
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Re: immediate annuity (again)


Not trying to get this poor tired old wrung-out thread going again,
EXCEPT to comment that I just saw yet another article promoting SPIAs:

http://tinyurl.com/ql6km

... and I'm starting to wonder who's paying these journalists to write all
these pro-SPIA stories. Ok, we know WHO, but why NOW; why is the
insurance industry so eager to sell these things now, as opposed to
previously ? Do they know something we don't, e.g. interest rates are
on the way up ??
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Re: immediate annuity (again)
Old 10-09-2006, 12:15 PM   #153
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Re: immediate annuity (again)

They think they smell a gigantic market opportunity, what with the Boomers coming up on retirement. They are probably right. After all, "there's a sucker born every minute."
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Re: immediate annuity (again)
Old 10-09-2006, 12:37 PM   #154
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Re: immediate annuity (again)

Quote:
Originally Posted by brewer12345
They think they smell a gigantic market opportunity, what with the Boomers coming up on retirement. They are probably right. After all, "there's a sucker born every minute."
Well..................if you believe the insurance industry's research, that states: "Boomers retiring in the next 5-10 years, most of whom will not have a lifetime pension to help fund a potentially long retirement (25-30) years, are the ideal client for immediate annuities and VA with guaranteed income riders"................

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Re: immediate annuity (again)
Old 10-09-2006, 12:54 PM   #155
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Re: immediate annuity (again)

Quote:
Originally Posted by brewer12345
They think they smell a gigantic market opportunity, what with the Boomers coming up on retirement. They are probably right. After all, "there's a sucker born every minute."
I think we can expect all sorts of variations on SPIAs comming out in the coming years. Most will be total rip-offs and a few may make some sense (to those for whom the basic concept of annuity as longevity insurance is appealing). Hopefully, Brewer et al will be around to point to the flaws. Who knows, maybe there will be a few gems in the pile of manure..
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Re: immediate annuity (again)
Old 10-09-2006, 01:00 PM   #156
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Re: immediate annuity (again)

Quote:
Originally Posted by brewer12345
They think they smell a gigantic market opportunity, what with the Boomers coming up on retirement. They are probably right. After all, "there's a sucker born every minute."
Boomers retiring? Wouldn't we all be bored & unfulfilled, and have any of us saved enough money?

I think there's a logical inconsistency here that the financial industry hasn't decided how to address yet. We're either all working until we drop or desperately seeking annuities, but we can't do both.
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Re: immediate annuity (again)
Old 10-09-2006, 01:08 PM   #157
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Re: immediate annuity (again)

Quote:
Originally Posted by Nords
I think there's a logical inconsistency here that the financial industry hasn't decided how to address yet. We're either all working until we drop or desperately seeking annuities, but we can't do both.
Now that is funny!!

Remember the infamous saying: "Make sure you don't die with a bunch of annuities, your beneificiaries WILL NOT be amused"..............

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Re: immediate annuity (again)
Old 10-09-2006, 01:14 PM   #158
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Re: immediate annuity (again)

Quote:
Originally Posted by Nords
I think there's a logical inconsistency here that the financial industry hasn't decided how to address yet. We're either all working until we drop or desperately seeking annuities, but we can't do both.
Remember that we are in an increasingly stratified society. Despite the large numbers of fools Boomers who have not saved enough, there is also a sizable slug of the generation that has money but is clueless about how to manage it. So the wolves personal financial advisors have plenty of marks to con with these products. As exhibit A, take a look at the obnoxious pandering of the Ameriprise "Dreams" ad campaign. Where that puking emoticon, anyway?
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Re: immediate annuity (again)
Old 10-09-2006, 01:23 PM   #159
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Re: immediate annuity (again)

Quote:
Originally Posted by brewer12345
Remember that we are in an increasingly stratified society. Despite the large numbers of fools Boomers who have not saved enough, there is also a sizable slug of the generation that has money but is clueless about how to manage it. So the wolves personal financial advisors have plenty of marks to con with these products. As exhibit A, take a look at the obnoxious pandering of the Ameriprise "Dreams" ad campaign. Where that puking emoticon, anyway?
Keep in mind, Brewer, the key phrase is not only "clueless about how to manage it", but also "too lazy to become less clueless on how to manage it".................

You may disagree with me, but most people spend 20 times as much time trying to save $100 on their new car as they do learning about personal finance.

I did a night class at the local high school a few years ago, and tried to teach basic lesson of money to juniors and seniors. They were allowed to bring a parent.

I saw one guy (parent) write out about 10 PAGES of notes during the 50 minute lecture, during which I was showing how to balance your checkbook, and how to use credit cards wisely. His answer? "You should charge for this stuff, I learned a TON tonight"
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Re: immediate annuity (again)
Old 10-09-2006, 01:26 PM   #160
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Re: immediate annuity (again)

Quote:
Originally Posted by FinanceDude
Keep in mind, Brewer, the key phrase is not only "clueless about how to manage it", but also "too lazy to become less clueless on how to manage it".................
No argument from me on that score. I think the lack of even basic money management education in the US is deplorable. It doesn't even require much math ability. Heck, I have a graduate degree in finance and I am not good for much beyond the most basic of algebra. 99% of managing one's finances can be done with 6th grade math.
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