Question about Transamerica annuity safety

[dinodino]

Hi, All,

My in-laws have a variable annuity with Transamerica, and I am inclined to advise them to cancel and take the surrender value. I am worried about institutional risk (never mind what I think about annuities, which is a whole separate issue).

What do you folks think?

Thanks,

Dino

[brewer12345]

Assuming that the variable annuity is invested in sub accounts that resemble mutual funds, I would not be particularly concerned. The credit risk you take with these things is primarily that the insurer might fall down on whatever guarantees they have slapped on the contract. The actual assets are not on the insurer's balance sheet, as this is a "separate account" product.

[2B]

I would look at the surrender fees versus the combined VA fees. Chances are there is a very short payout to cover the surrender fee. Also, look to see if there is an exemption to the fee if one goes into any form of assisted living. I certainly don't know anything about their health but it may be an issue.

The other issue is how well their assets would be managed without the VA diaper service.

I think variable annuities are criminal acts in most cases. I keep hearing how "good" the new versions are but I've never gotten any of the juicy details.

[haha]

Quote:

Originally Posted by dinodino Hi, All, My in-laws have a variable annuity with Transamerica, and I am inclined to advise them to cancel and take the surrender value. I am worried about institutional risk (never mind what I think about annuities, which is a whole separate issue). What do you folks think? Thanks, Dino

What I think is that there is way more marriage risk in something like this than you might realize. Just by mentioning it you make the buyers feel dumb. If they do what you say, and invest in Vanguard indexes or something and we get a huge bear market they lose money that they will feel and maybe justifiably so that is on your account.

Not long ago there was a thread on here about someone who wanted to take a job that his wife didn't want to move for. Many people who felt that their careers had maybe been harmed by not talking a move, or quitting a job to follow a spouse, piped up with how they harbored resentments through long marriages.

Since you are already married it is too late to make the most rational choice, but don't confound your troubles by volunteering for risky assignments.

Hey, JMHO.

Ha

[dinodino]

Great, Guys, thanks for the input. Sounds like it's okay as is, and we'll leave it at that.