Dateline Expose on an Annuity Sellers

[Allen Trent]

Fixed Annuities are great because unlike a bond they can't loose value. And the interest is comparable even so.

Fixed annuities can lose value to surrender charges unless it has 100% guarantee of return of premiums in the surrender charge language. IE: some fixed annuities may only return 85 -92 cents on the dollar if surrendered quickly.

not likely, but it happens. So your statement should be "cant lose value due to investment/interest returns"

 

[DHK]

Bonds provide a guaranteed rate of return. They do not lose value.

Unless interest rates change and one chooses to liquidate them before maturity. Statements may show a loss of value on the statement, but otherwise you're right.

 

[scagnt83]

Unless interest rates change and one chooses to liquidate them before maturity. Statements may show a loss of value on the statement, but otherwise you're right.

Same effect as an early surrender charge. If a Bond is held to maturity, there is no possibility of loss. Same/similar to a Fixed Annuity.

 

[Oregon Ben]

Yes, not surrendering the policy. Although some include living benefits unlike bonds

 

[scagnt83]

I always get a kick out of these types of videos as they always pull the cover back before getting to the application. I am sure they don't want to show the agent completing an application, suitability form, client disclosure or understanding form specific to the product or have the customer initial right beside those so called hidden surrender charges.

In all fairness. Back when this dateline episode aired. Annuity apps were not as comprehensive as they are now.

Fewer pages, fewer explanations, fewer disclosures, no initials, and fewer signatures. The suitability section was non-existent compared to today's apps. Very different.

Stuff like that scandal is why apps are the way they are these days.

 

[fostever]

I think where agents get in trouble, whether it's annuities or anything else is greed. Trying to recommend converting most or all of a clients retirement portfolio to an annuity instead of a portion is usually why annuities are a byword for predatory sales.

 

[scagnt83]

I think where agents get in trouble, whether it's annuities or anything else is greed. Trying to recommend converting most or all of a clients retirement portfolio to an annuity instead of a portion is usually why annuities are a byword for predatory sales.

I completely agree. Part of my whole annuity elevator speech is it "can be great for a portion of your retirement portfolio, but not all of it".

So it immediately takes away the thought or objection of "they want all of my money"

 

[DHK]

OR... you are doing a laddered annuity or split annuity approach.

Yes, it's dangerous and/or reckless to put all of one's retirement portfolio into a SINGLE annuity product. But laddering, layering, or splitting assets between various annuity contracts can be a great way to go.

 

[scagnt83]

OR... you are doing a laddered annuity or split annuity approach.

Yes, it's dangerous and/or reckless to put all of one's retirement portfolio into a SINGLE annuity product. But laddering, layering, or splitting assets between various annuity contracts can be a great way to go.

That would not pass suitability with many carriers.

 

[DHK]

If you have an emergency liquidity fund, and you've got a SPIA (or other annuity for income) and you can split up the remaining funds for growth/deferral... there would be no problem.