Agent Arrested and Convicted for Selling an Annuity.

[sonic1]

That's all great and stuff but can you please answer the question?

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No. We were not talking about risk. We were talking about risk of losing money in a seven-year annuity versus a 14 year annuity. That is not the same. You jumped in and told him he was wrong and you can't even come up with one example to support your claim. Just think before you start typing next time.

 

[scagnt83]

You solved the great mystery of annuities. I'll run out and share it with the financial community immediately! Of course "Captain Obvious", going longer has a benefit of a better rate. The point of this discussion at least with the South Carolina guy was that he believes a long-term annuity is unsuitable for anyone in their 70s or 80s and in fact is I was told even for a 65-year-old. He in fact suggested short and long term products provide very similar upside potential. Don't worry yourself on getting the facts about the discussion though. It's just a bunch of words and somebody would have to read it to you anyway. Your "revelation" is almost like your input in this conversation which is, irrelevant. At least scagnt38 followed the discussion and made some sense.

I never said it was unsuitable for a 65 year old. All I ever mentioned was someone 80 and up.

And I what I said was that in the Glenn Neasham case, the clients goals could have very likely been met with a shorter surrender product. Especially one that did not require a mandatory 5 year annuitization.

I went on to say that the majority of 80 year olds can accomplish their goals without resorting to locking up their money for 14 or 15 years.

And technically I did not say it was not suitable. I specifically said it was suitable. Just not the best possible fit for the situation imo.

 

[VolAgent]

That's all great and stuff but can you please answer the question?

Why, the question has been answered repeatedly. It isn't my fault you don't like the answer.

And I'd pick a better thread to argue about liquidity and unforeseen changes. The annuity was sold in 2008, just a few years later she had a conservator. I'm not going to hunt back through the thread, but I believe she entered a nursing home as well. Fortunately the product did allow additional withdrawals if she was in a nursing home. But there is no way anyone could have foreseen those changes.

So yes, those are very real concerns. Insolvency is the least of them, but needing access to the money is huge, particularly at her age.

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There are downsides to everything. Donwsides to buying a house. Downsides to taking a vacation to the Bahamas. Downsides to WINNING the lottery. Downsides to buying car insurance. Downsides to posting on this board. Downsides to the ACA. Downsides to CDs. Downsides to 7 year surrender charges. Downsides to liquidty. Downsides to 14 year surrender charges. Anybody that doesn't acknowledge that shouldn't be in any business.

But we were talking about risk.

Downside is risk, I'm not sure how that escaped you.

Life is full of risks, it is about balancing it versus the reward. But you are only fooling yourself if you pretend they don't exist when they do.

 

[bobson]

Why, the question has been answered repeatedly. It isn't my fault you don't like the answer.

And I'd pick a better thread to argue about liquidity and unforeseen changes. The annuity was sold in 2008, just a few years later she had a conservator. I'm not going to hunt back through the thread, but I believe she entered a nursing home as well. Fortunately the product did allow additional withdrawals if she was in a nursing home. But there is no way anyone could have foreseen those changes.

So yes, those are very real concerns. Insolvency is the least of them, but needing access to the money is huge, particularly at her age.

Everyone needs access to money. Maybe we should outlaw annuities? Only allow savings accounts?

 

[scagnt83]

No. We were not talking about risk. We were talking about risk of losing money in a seven-year annuity versus a 14 year annuity. That is not the same.

We are talking about multiple types of risk. Vol did a nice job of naming them all I believe.

 

[VolAgent]

Everyone needs access to money. Maybe we should outlaw annuities? Only allow savings accounts?

Ah yes, the typical reaction, overreact.

Often I wonder why we have to endure ethics, and then I get reminded.

Just because we can do something doesn't mean we should.

I admit, I never was Glenn's biggest fan. I was never sure that the punishment was appropriate, but I wasn't there and I wasn't going to second guess the jury. Fortunately for Glenn, the appellate court had access to everything and decided there was no theft.

But why warning bells weren't going off in his mind is beyond me. As long as he had been doing this, he should have had that sixth sense that just said something was wrong here. All he had to do was slow down. Little things and never would have gotten to this point. A shorter surrender period, not sending her to the bank for a check, anything.

 

[sonic1]

Once again my man, you're starting to ramble on. We spoke specifically about losing money in a seven-year versus a 14 year indexed annuity. That was it. Nothing about downside or whatever. My point being is that I knew you couldn't come up with a single example. Just think next time before you start to type.

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Your rambling on my man. We were specifically speaking about a seven-year annuity versus a 14 year annuity as far as the potential to lose money. That is all plain and simple. The reason why I gave you the challenge was because I knew you could not come up with one single example. Just do us all a favor next time and think before you type. Take care.

 

[VolAgent]

And yes, it is true... Anyone given the choice of higher caps with the same downside risk chooses higher caps. It's silly to argue otherwise.

I quote you again. You said it, not me. I've pointed out repeatedly that this statement is simplistic in the assumption that a 7 year annuity has the same downside as a 14 year annuity.

You're inability to understand this is not my problem.

 

[sonic1]

Bobson was correct. You spoke without understanding the conversation. Let's just drop it.

 

[Norwayguy]

Volagent - you're making no sense. None. First a 14 year is bad then you suggest possibly getting another annuity when the first surrender period ends and HOPE rates are better. In fact so much better that it makes up for the shortcomings of the first lower cap rate policy you sold them. Hope as a strategy is silly.

Yes longer term rates/annuities will get you better caps. Welcome to the discussion.

You hopefully have read this thread so you know we're on the assumption that liquidity is fine.

Regardless, if at that age you think the client will need to have access to it then don't put it in an annuity. If they're fine and you do, it should be for income, growth and legacy. Very simple.

Lowering the bar for your clients account values and expectations isn't maximizing their "bang for the buck"

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Bobson had it right...

Actually he makes a lot of sense....A big concern for me as an agent with a longer term contract is the carrier discontinuing the sale of said product and coming out with a new improved product.

Can anyone in the class tell me what happens when a carrier closes a block? Anyone Bueller? Could the answer be a far higher likelyhood of said carrier dropping caps to minimums?