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Surrender Charge on an Annuity
06-24-2008, 07:54 PM
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#1
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Confused about dryer sheets
Join Date: Jun 2008
Posts: 3
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Surrender Charge on an Annuity
Do all fixed annuities have a surrender charge if cashed in before maturity date?
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06-25-2008, 07:38 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Dunno about all, but certainly the vast majority do. Don't think I have ever seen one without a surrender charge.
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"All animals are equal, but some animals are more equal than others."
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Ezekiel 23:20
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06-25-2008, 07:48 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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I would think that they do, and here's why.
They want to make sure if you wake up during the term of the annuity that if you want out they get to rip you off again.
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06-25-2008, 08:45 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
I would think that they do, and here's why.
They want to make sure if you wake up during the term of the annuity that if you want out they get to rip you off again.
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Mr handley, you perhaps don't yet know that "annuity" is a very bad word around here.
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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06-25-2008, 11:14 AM
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#5
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Confused about dryer sheets
Join Date: Jun 2008
Posts: 2
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surrender charges
They typically have surrender charges during the "surrender period" which is not the same as maturity date.
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06-25-2008, 11:24 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by jhandley
Do all fixed annuities have a surrender charge if cashed in before maturity date?
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Most annuities don't have a "maturity date", just a "surrender period". It depends on your contract.
Contrary to popular belief, you can buy annuities with NO surrender charges, but most agents won't tell you that........
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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06-25-2008, 11:25 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by FinanceDude
Most annuities don't have a "maturity date", just a "surrender period". It depends on your contract.
Contrary to popular belief, you can buy annuities with NO surrender charges, but most agents won't tell you that........
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Why?
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06-25-2008, 11:30 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by 73ss454
Why?
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Well, they make a LOT less money if they do so. Annuities have different "share classes". Here's an example:
No surrender: Agent gets nothing up front but 1% a year trailing income from day one
Short surrender: (4 year surrender schedule) Agent gets 4% upfront and a .50% trail starting in the 3rd year
"Normal surrender" (7 year surrender schedule) Agent gets 6-7% upfront and either no trail or .25% after the 7th year.
Since most newer agents are under pressure to get "numbers" they stick with the 7-year products, not even mentioning other options............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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06-25-2008, 11:34 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Thanks FD, you guys listening out there?
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06-25-2008, 11:43 AM
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#10
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Confused about dryer sheets
Join Date: Jun 2008
Posts: 2
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It's my understanding that all annuities, variable and fixed, have a "maturity date" or "income date". Usually means the date at which income payments are scheduled to begin unless you annuitized the contract prior to that date.
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06-25-2008, 11:46 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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You could perhaps see if there's a class-action against your carrier and then see if you can leverage that to get out of your contract without the surrender charge.
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06-25-2008, 11:48 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by Marquette
You could perhaps see if there's a class-action against your carrier and then see if you can leverage that to get out of your contract without the surrender charge.
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Doubtful, those actions are few and far between..... What we DON'T know is when the annuity was purchased. The surrender charge goes down each year. In addition, there's a "free amount" that increases over time that can be moved without penalty.
OP needs to provide more info to get more help..........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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06-25-2008, 11:49 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by bcarrell
It's my understanding that all annuities, variable and fixed, have a "maturity date" or "income date". Usually means the date at which income payments are scheduled to begin unless you annuitized the contract prior to that date.
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In the "old days", that was true. However, due to changes, "forced annuitization" clauses have be challenged in courts, and the investor has won virtually all of those cases........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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06-25-2008, 11:53 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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Quote:
Originally Posted by FinanceDude
Doubtful, those actions are few and far between..... What we DON'T know is when the annuity was purchased. The surrender charge goes down each year. In addition, there's a "free amount" that increases over time that can be moved without penalty.
OP needs to provide more info to get more help..........
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Sorry, I should probably have put a smiley along with that one... it was mostly tongue-in-cheek, although we're wading through a class-action and a state-filed suite right now.
That's a very good point about the charges though. We don't know when it was bought, what the terms are, or if it's even in a free look period right now.
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06-25-2008, 11:58 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by Marquette
Sorry, I should probably have put a smiley along with that one... it was mostly tongue-in-cheek, although we're wading through a class-action and a state-filed suite right now.
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Which company??
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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06-25-2008, 12:20 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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Quote:
Originally Posted by FinanceDude
Which company??
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I filled you in via PM
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06-25-2008, 06:34 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Quote:
Originally Posted by haha
Mr handley, you perhaps don't yet know that "annuity" is a very bad word around here.
Ha
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Hey, I like annuities and insurance companies!
Medium-rare.
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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