One more time, variable annuities....

[Art G]

You lost me with the "to death" requirement...

It's not a requirement, [Mod - personal insult deleted] !

 

[FinanceDude]

Excellent. This thread is over when it gets compared to either Hitler, Nazis or Salem Witch trials. Internet rule 6427.82

Bad day?

 

[Notmuchlonger]

No, Im in a good mood. It was my attempt to be funny. Obviously I failed miserably. I wont quit my day job as a stock market predictor.

Dow will be 10000 by the end of a year.

 

[2B]

Dow will be 10000 by the end of a year.

The end of which year?

 

[Notmuchlonger]

The end of which year?

Thats up grabs.

 

[Bestwifeever]

No, Im in a good mood. It was my attempt to be funny. Obviously I failed miserably. I wont quit my day job as a stock market predictor.

Dow will be 10000 by the end of a year.

Hey, you made me laugh! Are we touching bottom yet, oh prognosticator? (go ahead, hit that one out of the park )

 

[samclem]

Hey, umm, about those super-solid insurance companies that we're supposed to give all our money to. Dbl Doc just posted an interesting link on another thread .

Yep, no reason to worry folks.

 

[clifp]

I am dying (which I guess is the best way to own a VA) to see Art spin how great VA when it turns out the insurance companies didn't probably hedge "the guarantee you can't lose money in VA feature."

It seems me that with absurdly low rates for T-Bills and the 40% market decline, and record volatility. it would be virtually impossible for an insurance company to offer a product that promise to capture "75% of the upside of the market", but will guarantee that you get your money back in 10 years. Brewer started a thread on how to replicate a VA using options, and CDs. Any insurance company that wrote a VA several years ago during times low volatility and high CD rates is hosed trying to duplicate this now.

I predict that state insurance funds are the next victim.

 

[2B]

I predict that state insurance funds are the next victim.

They are generally underfunded and do not represent a "full faith and credt" on the state. It's all paid for by the insurance companies that operate in that state based on their sales. If the "big one" hits, these pools will become very strained very quickly. I suspect the feds will bail them out but they are going to be very limited in what is covered. The federal bail out may not happen right away so a lot of checks may not show up before they come in.

 

[Zathras]

And one more fact, right now I know a ton of people who are thrilled to death that they moved from good quality mutual funds into them. How odd that they're not opposed to paying an extra percent to protect them from their 30% losses.

Ask those same people how they feel about it when the market is up

 

[Art G]

I am dying (which I guess is the best way to own a VA) to see Art spin how great VA when it turns out the insurance companies didn't probably hedge "the guarantee you can't lose money in VA feature."

It seems me that with absurdly low rates for T-Bills and the 40% market decline, and record volatility. it would be virtually impossible for an insurance company to offer a product that promise to capture "75% of the upside of the market", but will guarantee that you get your money back in 10 years. Brewer started a thread on how to replicate a VA using options, and CDs. Any insurance company that wrote a VA several years ago during times low volatility and high CD rates is hosed trying to duplicate this now.

I predict that state insurance funds are the next victim.

You guys try so hard to discredit me that you don't even take the time to read my posts, or that article for that matter.
I've stated numerous times that if the product fails, I'll be the first to admit it, but why work so hard to bury the product before it's dead? No matter what happens, the clients will still get back their remaining funds, so worst off, they'll be in the same boat anyone else is with their mutual funds currently.
I haven't tried to "spin" a thing. I've merely pointed out that you all are slamming a product that quite possibly could turn out to have been the best decision you should have made. If I'm willing to admit if the product doesn't work, why are so many of you out there unwilling to admit it may?
BTW, brewster's creation would be just about as expensive to structure, and with no tax deferral, no death benefit, no guaranteed income for life, and no step ups. All he created was an index fund with insurance and you laud that?

 

[Art G]

Ask those same people how they feel about it when the market is up

So, if the market's up, you're going to be up also. Possibly more, just depends on the mutual funds you selected. However, you're not currently paying capital gains and you can move within the portfolio without creating a taxable event. Then of course, there are the quarterly (and sometimes daily) lockins of highest value.
So, assuming your funds outperformed, you gave up some return to protect your money for life. How are you feeling currently about your funds?
I realize that you all have the need to fit in with "the cool guys", but just like in high school, they really don't care about you at all. Think for yourselves. Have an open mind.

 

[FinanceDude]

Ask those same people how they feel about it when the market is up

Not as thrilled, but can you tell me with certainty when the market will recover, so I can buy stocks at the right time?

 

[Sarah in SC]

FD, are y'all selling these or something? Just checking.

 

[Art G]

FD, are y'all selling these or something? Just checking.

Not at the moment I wouldn't think. However, having bought one in the last year sure makes me feel better.

 

[Zathras]

So, if the market's up, you're going to be up also. Possibly more, just depends on the mutual funds you selected.

Didn't you just say a few posts ago that your upside was limited?
If that is not the case, my apologies.

How are you feeling currently about your funds?
I realize that you all have the need to fit in with "the cool guys", but just like in high school, they really don't care about you at all. Think for yourselves. Have an open mind.

Again, since you ask, I feel great. My income stream continues to increase, I can buy more stock at a lower price for an even larger income stream in the near future, and I don't have to pay anyone 2% or more in fees (is that one time, or on an annual basis)?

I do have an open mind, what I have seen of VAs is definately not for me. They may be good for someone else, but they are a really bad deal for this investor.

 

[Zathras]

Not as thrilled, but can you tell me with certainty when the market will recover, so I can buy stocks at the right time?

No, if you are looking for the very bottom, I can't.
But I lay pretty darn good odds that in 10 years the market will be a lot higher than it is now

 

[Zathras]

No matter what happens, the clients will still get back their remaining funds, so worst off, they'll be in the same boat anyone else is with their mutual funds currently.

Not true, someone earlier in this thread laid out exactly what happened to them. They ended up getting only a fraction of the worth and that was after a legal mess I wouldn't want to deal with.

 

[Art G]

Didn't you just say a few posts ago that your upside was limited?
If that is not the case, my apologies.



Again, since you ask, I feel great. My income stream continues to increase, I can buy more stock at a lower price for an even larger income stream in the near future, and I don't have to pay anyone 2% or more in fees (is that one time, or on an annual basis)?

I do have an open mind, what I have seen of VAs is definately not for me. They may be good for someone else, but they are a really bad deal for this investor.

No, I said if you went with brewsters plan your upside is limited, not with a VA. It would be limited with an Indexed annuity as well, but I wouldn't recommend those to anyone.
And again, if you have a large portion of cash available to invest now then you're one of the smart ones. I also was liquidating some since June, but if you're buying on the downtrends, unless you have unlimited cash flow, at some point that runs out.....or you sell something else at a loss.

 

[Art G]

Not true, someone earlier in this thread laid out exactly what happened to them. They ended up getting only a fraction of the worth and that was after a legal mess I wouldn't want to deal with.

Sorry, but if you read that story, it was someone who knew someone. As far as my research indicates, no one has ever lost their own investment in a VA. Of course, there is the chance someone is creating stories just to fit in with the cool kids.

 

[Sarah in SC]

As the holder of an annuity from the defunct Executive Life Assurance Co. HATRED does not begin to express my attitude. But I will moderate myself and refer you to dozens of posts by 2B.

So Art, are you calling CuppaJoe a liar? Just wondering....

 

[Art G]

So Art, are you calling CuppaJoe a liar? Just wondering....

Well Sarah, I didn't recall who had said what, and of course I'll now receive another point deduction from the moderators to be sure, but lets just say I'd hate to see an industry unfairly defiled.
BTW, there's already another thread where the creator of the thread threw out his "oooops" towards VUL's.

Ya know Sarah, I realize I'm not making any friends around here, but what the heck if it at least gets people around here to think or even ask questions then that's fine. So far on this site, I've given out some good stock picks (which some people have been kind enough to thank me for in private), foretold of the coming doom caused by hedge funds, and recommended VA's when the market was up and you could lock in values. I'm not sure how much more is necessary before people at least think to themselves, "hmmmmm, perhaps I could use professional advice"?

 

[Sarah in SC]

Well, speaking as one of those who gets their checks based on folks that look for that professional advice, I totally agree. But I spent 3 years earning that CFP and getting to run numbers on those annuities, and I don't see much value in them for most folks.

And I'm not piling on, just pointing out that your broad brush might take into account who you are claiming makes stuff up. No mod action, just pointing out that Cuppa is not one of those that has been giving you a hard time about annuities.

 

[Art G]

Well Sarah, you may not see a value to them. However, if they do pay off as promised you might want to alter your viewpoint. I've never used a broad brush, as I've stated quite plainly that the product isn't right for everyone. I don't use it for everyone. However, with that said, it also shouldn't constantly be written on here that it's not right for ANYONE. People are going to need pensions in the future, probably more so than they did in the past because in all likelihood they will live longer. Back when they merely were a death benefit product, they weren't all that useful, however now with living benefits they've taken on a completely different value. Even guys like Scott Burns and Moshe Milevsky (who hated the products) are now admitting to their benefits.
Heck, there are certain people out there who have no need for social security or medicare! Where are all the threads knocking those?
FWIW, I think there's a decent chance insurance companies rescind living benefits. I think their actuaries misfigured or were coerced to approve products. All JMO.
As to cuppa joe, I didn't mean to be bagging on you. I would just need to see in writing where an insurance company didn't pay back the clients money. It just doesn't seem feasible.

 

[Martha]

Art, for your information Executive Life Insurance Company which CuppaJoe mentioned was a large California insurer and it failed. You can read about it plenty of places by doing a Google search. Executive Life Insurance Company - Wikipedia, the free encyclopedia

There was lots of ugliness and complications after the failure.