EIUL and Mortgages

[midwestbroker]

So, what do you think Dave Ramsey would say about this? I know that he is a buy term and invest the rest type of guy.

All I know about Suze Orman is that she is pretty much against annuities (read an article about it in last months Senior Market Adviser).

 

[Crabcake Johnny]

I don't see that Suze is against annuities: http://www.suzeorman.com/igsbase/ig...D=20&SnavID=29&TnavID=&AreasofExpertiseID=107

But I do now where she stands on health insurance:

http://www.assuranthealth.com/corp/ah/promotion/tic_rsd.htm

 

[James]

So, what do you think Dave Ramsey would say about this? I know that he is a buy term and invest the rest type of guy.

All I know about Suze Orman is that she is pretty much against annuities (read an article about it in last months Senior Market Adviser).

Yes they called her a Piker of Annuities, such as this being used to defend their called conclusion:

CAUTION

Please note that an SPIA is my least favorite of all investments. Purchasing an SPIA especially in today's low interest rate environment is not something that I would recommend doing.

No one I know of would call the purchase of a SPIA an investment! Its called an Income, wonder what Suze was drinking that day? That is okay, I understand the idea of todays lowere interest rates but things are what they are now are they not.

 

[J.R.]

Because out of all the worst case scenarios we can dig up and all the articles we can pull up of people getting major illnesses or disablities the simply fact is this; an overwhelming majority of people will do just fine. Most peoples' biggest problem in this country are when two shows are on at the same time.

Not anymore.... Just got the DVR - NASA-Direct TV and now we can record two shows at once. I pretty much have the NGR and SCI channels recording 24/7. Oh that reminds me......Just saw a new show the other day called Man vs. Wild. Normally I am not one for reality shows, but that show kicks ass!!

 

[James]

Oh, if anyone doesn't get the rag Senior Advisor here is a story about what they call the big players such as Jack Marrian and others including the piker herself Suze. Which was referred to as the trouble maker of Annuities making our jobs even harder for those that actual take her spiel seriously. Here is the link and the section about Suze.

http://www.producersweb.com/r/smaMa...371010beb&cT=f8b8c7795fc116492a791fcbfbfbdbef

The Troublemaker: Suze Orman
Rounding out our list is the ubiquitous Suze Orman, whose people declined Senior Market Advisor's request to interview Orman for this piece, citing scheduling conflicts with her latest book-signing tour. We see you shaking your heads at Orman's inclusion in the list, but consider the amount of influence she wields amongst consumers.

Even those outside the financial services sector easily recognize Orman, a media-savvy figure whose investment advice, such as it is, is heard (and read) by millions around the world. She is host of "The Suze Orman Show," airing Saturday evenings on CNBC in the U.S. and Asia, as well as "The Financial Freedom Hour" on QVC. She's also written five New York Times bestsellers, including "The Money Book for the Young, Fabulous & Broke," "The Laws of Money," "The Lessons of Life," "The Road to Wealth," "The Courage to Be Rich" and "The 9 Steps to Financial Freedom," with PBS Television specials based on each. Her newest PBS special, "Women & Money," began airing nationally in January. She has also created a series of do-it-yourself kits for personal financial planning.

In her spare time, Orman serves as a contributing editor to O, the Oprah Magazine and O at Home, as well as contributing columns to Yahoo! Finance's Money Matters Web site and both The Costco Connection and Lowe's Moneyworks — in between her various personal appearances as a motivational speaker.

All of this from a self-built financial media pioneer who was working as a waitress at Berkeley, Calif.'s Buttercup Bakery until she began her career as an account executive with Merrill Lynch.

Orman's one-sided opinions on annuities continue to make her one of the most visible voices in the field, with her own mix of cautiously optimistic recommendations presented on her Web site, www.suzeorman.com.

Her views on annuities tend to advise consumers that even though annuity products are investments that so many financial advisors love to sell — and lots of people love to buy — more myths surround annuities than almost any other investment. She says not many people at all should be investing in annuities, admitting that there are circumstances where they sometimes make sense, but even more reasons why they do not.

Few could argue her strong views tend to make the general investing public particularly wary of annuities, which makes your job that much harder.

 

[James]

Plus, I have always heard that you should not mix your investments with you insurance.

Yes a favorite expression by pikers that simply don't understand how insurance can charge up ones portfolio. Someone, I thought it was this thread but must of been another brought up the name of Peter Katt, while I'm sure he is leary of equity management he is consider an expert when it comes to Insurance and Investments. Now if you don't know who he is you should really dive into his site and read everything he post. Lot of my reasoning and thoughts of Insurance has been nutured by his writings even though I may not agree totally I find it hard to match up my knowledge to this guys knowledge, I'm sure I'll never be the expert of his level!

This is a good story that seems to go along with this thread, http://www.peterkatt.com/articles/AAII_feb1996.html

Plus the site is http://www.peterkatt.com/index.html

 

[Crabcake Johnny]

Don't know. The latest article I read said the average EIA returned 6.5% but also 2.5% worth of "fees" netting 4%. My wife has CDs earing more than that. Even with 1.5% worth of fees that's 5%. She has CDs earning more than that too. In fact, it's quite easy to get a CD earning more than 5% and it's federally insured. I'm not entirely sure exactly what the sales pitch is to get seniors to dump out of CDs to buy an annuity but I'm all ears.

 

[James]

Don't know. The latest article I read said the average EIA returned 6.5% but also 2.5% worth of "fees" netting 4%. My wife has CDs earing more than that. Even with 1.5% worth of fees that's 5%. She has CDs earning more than that too. In fact, it's quite easy to get a CD earning more than 5% and it's federally insured. I'm not entirely sure exactly what the sales pitch is to get seniors to dump out of CDs to buy an annuity but I'm all ears.

I have to admit that I'm for one just don't have the energy to battle a battle that has an outcome we all know is certain. That is we don't agree, I'm not sure how discussing these matters between ourselves can possibly help? It will likely just turn into another Opinion Vs Opinion pieces that are out there with nothing in common.

Fact is I posted Katts site and Jack Marrian site, they don't seem to agree with most of the stories you seem to rely heavily on. Yet I for one can not find better people and more knowledgeable on these very issues we are discussing.

Yet the number one reason why someone would go into annuities or a life insurance contract and using either or both as an investment vehicle is simply "Tax Deferral" and "Safe Harbor", then you have the whole "Income Creation" discussion.

 

[Crabcake Johnny]

Agreed. Still don't understand what the pitch is for the "safety" of an annuity at 1.5% or 2.5% guaranteed when that's among the worst returning CD. But we can agree to disagree. I think it safe to close this out with clients are free to choose whatever they like as long as they understand their options. There is no "good" or "bad" investment - just what's good for you as long as you're aware of the upsides and downsides. You have people putting their money in oversees emerging markets and people hiding it under their matress. Neither is right or wrong.

 

[James]

Agreed. Still don't understand what the pitch is for the "safety" of an annuity at 1.5% or 2.5% guaranteed when that's among the worst returning CD. But we can agree to disagree. I think it safe to close this out with clients are free to choose whatever they like as long as they understand their options. There is no "good" or "bad" investment - just what's good for you as long as you're aware of the upsides and downsides. You have people putting their money in oversees emerging markets and people hiding it under their matress. Neither is right or wrong.

Annuities today are paying about 4.5-7% on average that is, of course you simply go and check out Jack Marrian to find those that are paying best. Then you go to Katts site to find the strategy on how to employ Annuities and LI.

Plus very few Annuities are charging 2.5% cost for their product. Plus the risk factor is clearly seen in Al's post in another thread, which I thought he explained as good as I have read. Fact is most do not do well in the equity market, as in the general population.

While I'm for one not sold on Low Load Insurance vehicle I would find it hard to debate Katts reasoning on why they make sense esp. if short term protection is needed. Such as those over 50 or 55 years of age.