10% Penalty on Annuity

[VolAgent]

This is were we get into semantics. No, technically they are not part of the official term/label "application". But they are most certainly required to apply for the product. Without them filled out, the product will not be issued.

Once upon a time, I had a technical glitch and needed the carrier to send me the completed app for my records. I asked for the "signed application", they sent all 30+ pages, not just the technical "application".

The carrier knows what you mean when you ask. I would not expect them to play semantics with a client in this situation.

I have no idea what would happen and I skipped over most of the back and forth between the two of you. I would hope a carrier would not as it is part of their file for the applicant and would have to be provided to a regulator or at discovery if there ever was a lawsuit over it. Typically regulators and judges take a dim view on playing silly games.

 

[scagnt83]

I have no idea what would happen and I skipped over most of the back and forth between the two of you. I would hope a carrier would not as it is part of their file for the applicant and would have to be provided to a regulator or at discovery if there ever was a lawsuit over it. Typically regulators and judges take a dim view on playing silly games.

If there is even a single question missing in the suitability or financial disclosure forms they Contract will not be issued until that is answered. There is no carrier I know of that considers those forms as "optional" when applying for an annuity.

 

[VolAgent]

If there is even a single question missing in the suitability or financial disclosure forms they Contract will not be issued until that is answered. There is no carrier I know of that considers those forms as "optional" when applying for an annuity.

I'm taking about providing the file when requested. Yes, they want everything answered for compliance reasons and to defend themselves if there is a question down the road.

 

[Julieolo]

I have 2 other things I would like to just throw out there.

I first visited another guy who wanted $100 a month to invest the money and take care of the account.

When I met with my current financial adviser I asked him what he would receive for his services. He told me nothing that he collects his pay check from his employer. This made me think that he would have no motive for selling me anything...just advice. This was naive of me I know. And I probably asked the questions wrong but I am now under the impression that he does gain something from holding the contract. Am I right?

Here is another question that keeps popping up in my head that I am afraid to ask. In the contract it states that I will receive 2.5% interest for the first 3 years. After 3 years I am guaranteed a 1% interest rate. I ask about this because lets face it...1 % is nothing. He said that it was guaranteed 1% but if the market was up at the time that it would go up with the market. Is this true because after everything I have learned, I now fear it may not be true.

 

[NPCOACH]

I have 2 other things I would like to just throw out there.

I first visited another guy who wanted $100 a month to invest the money and take care of the account.

When I met with my current financial adviser I asked him what he would receive for his services. He told me nothing that he collects his pay check from his employer. This made me think that he would have no motive for selling me anything...just advice. This was naive of me I know. And I probably asked the questions wrong but I am now under the impression that he does gain something from holding the contract. Am I right?

Here is another question that keeps popping up in my head that I am afraid to ask. In the contract it states that I will receive 2.5% interest for the first 3 years. After 3 years I am guaranteed a 1% interest rate. I ask about this because lets face it...1 % is nothing. He said that it was guaranteed 1% but if the market was up at the time that it would go up with the market. Is this true because after everything I have learned, I now fear it may not be true.

For the first guy, it is not unusual for a money manager to charge a 1% fee (if he is managing money, not just selling an annuity). That would be $160 a month in your case.

But for the second guy, if he is selling you an annuity, I would be very surprised if he is not getting a commission in some way. Maybe the employer gets the commission and is paying part to him, but not likely someone is not getting a commission somewhere. Nothing wrong with a professional getting paid for his services, he should, but they should be honest about it.

As far as the contract terms you asked about (the guaranteed interest) no one can answer that without knowing the particular company and product.

 

[NPCOACH]

I agreed with you originally that "technically" the application portion is just a few pages. Guess you missed that.

But if a consumer asks for the "application they filled out" most carriers are going to send them the entire new business forms, not just the first 3 pages.

I read just fine, you are the one who missed that I wrote you "technically" were correct.

In the future, I will just be careful not to respond to people who want to argue needless semantics. If she asks for the "application she signed" the carrier is most likely not going to just give her the first few pages of new biz paperwork.

SC,
No you didn't write that I was "technically correct". Let's try to be honest. You wrote that you didn't want to engage in semantics with someone that thinks an application is only 2 or 3 pages. You were trying to be deliberately insulting.

Obviously, as I wrote, there can be 40 or 50 pages that might have to be submitted. While important, they are not the application. The application will almost always appear in and be part of the actual policy contract. Virtually Never will all of the other 40+ pages be included in the annuity contract. Insurance companies rely on them to issue the annuity, but they ARE NOT generally part of the contract.

Many of the forms required are agent reports and disclosures that the client never sees. These most definitely are not part of the contract ot the application. Nevertheless, the company will not issue an annuity without them. And a I seriously doubt any company would release those to a client that merely asked for a copy of their application.

I have been on this forum for many years and seldom post because of people like you. If there is a single thing I have posted in this thread that is inaccurate, I will happily acknowledge it and apologize. But don't make up nonsense and then engage in revisionist history to try to make yourself look good. It doesn't work.

 

[Julieolo]

I hate to see anyone here getting upset with each other. This is obviously a complicated subject with complicated rules and regulations.

I personally value everyones input here and if there is anything I have learned is how complicated all this all is.

Also keep in mind how easy it is to miss interpret each others posts because of the form of communication. Even something as simple as a comma can change the meaning of ones text.

Consider:
Let's eat grandpa.
Let's eat, grandpa.

Oh and I almost forgot to add....the correct punctuation can save a life. =)

 

[DHK]

It's okay. In this context, these exchanges help us all to improve - either our own communication or to get better in our craft.

There's other parts of the forum that can get downright nasty... but this isn't it. Most of us here... well, we learn quickly when we're wrong. Sure, we get a little testy, but sometimes that's part of the process.

 

[scagnt83]

Last paragraph of my initial response to your post:

The second paragraph is technically correct. But whats required to be included in the policy is still state specific.

SC,
No you didn't write that I was "technically correct". Let's try to be honest. You wrote that you didn't want to engage in semantics with someone that thinks an application is only 2 or 3 pages. You were trying to be deliberately insulting.
............
I have been on this forum for many years and seldom post because of people like you. If there is a single thing I have posted in this thread that is inaccurate, I will happily acknowledge it and apologize. But don't make up nonsense and then engage in revisionist history to try to make yourself look good. It doesn't work.

I said it initially, and multiple times after.

---

You try to call me out, yet you made insulting comments as well.

Whats crazy is that we are disagreeing about if we disagree or not. You are needlessly arguing semantics because for some reason your feelings got hurt.

What we do not agree on was your assertion about demographics. I would be surprised if that is correct, but it really doesnt matter either way. I was serious when I asked to see the LIMRA study, wasnt trying to be a jerk with that comment.

 

[NPCOACH]

SC,
I sent you the Gallop survey and Limra study info 36 hours ago.
Here is the site for everyone:

www.annuity-insurers.org

Not sure what more you want.