Lady is Thinking About Putting $20K into a CD

[0b1kanobee]

78 years old? That is just a number. People are living much longer now and an annuity might work perfectly. It all depends on her finacial needs. An insurance agent that has been doing annuities properly could figure out what she should/could do with her money.

She could gave a 100k under her matress for all I know. Find the monies and go from there. If this is all she has then an annuity isn't really a good option at least not a long year product.

Check with Symetra, they have some good CD alternatives. I nor anyone else for that matter could give you any definative advice on this lady without more facts. From what I have gathered so far which is nothing, a cd sounds about right but more facts are needed.

Also, depending on what financial planner she worked with if not you does not mean he/she might not reccommend an annuity. You need more facts to get better answers.

 

[Newby]

All great questions to ask. And the answers should come from a properly licensed financial professional - not an insurance agent. I'm out. Later.

Healthagent, I have respect for your health insurance knowledge but when you get outside of that you have a lot of opinions that are ignorant.

You find her a fee for service financial planner that will advise her on her $20,000 that can do anything with it better than a knowledgable and professional life agent without costing her an arm and a leg.

Of course there are a lot of life hacks...just like there are a lot of health hacks. But that doesn't diminish the professional agents who take their business seriously.

The life agent should do his fact finding. It's very likely that a fixed rate or indexed annuity is EXACTLY the best place for her. It's also likely that a single pay life policy is EXACTLY right for her. If a CD or market product is what she is looking for THEN the agent can refer her to the right place.

 

[briko3]

Is being a financial advisor and agent mutually exclusive? We all know that insurance is a vital part of any financial plan. I would rather have a financial advisor that understands insurance as well as investing.

 

[moonlightandmargaritas]

The life agent should do his fact finding. It's very likely that a fixed rate or indexed annuity is EXACTLY the best place for her. It's also likely that a single pay life policy is EXACTLY right for her. If a CD or market product is what she is looking for THEN the agent can refer her to the right place.

Amen. That's it in a nutshell!
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Is being a financial advisor and agent mutually exclusive?

Not necessarily, but there are so many life insurance people that work under the guise of being a "planner". When all you have is a hammer, everything looks like a nail...

If someone wants truly objective "advisor" action - they've got to go fee-based.

 

[xrac]

A financial planner is is a title and they are like insurance agents both good and bad. Have you ever listened to Suze Orman give advice. Some of it is horrible.

Most planners wind up sticking small amounts of money into mutual funds or money markets or maybe bonds. If she needs income and immediate annuity would be appropriate. If she doesn't need this money then life insurance or a longer annuity could be used to pass it on to heirs. She could use it for final expense planning. If she just wants to do better with it then CDs look at the annuties from ANCIO. To really give advice one has to know her situation.

 

[scagnt83]

Not necessarily, but there are so many life insurance people that work under the guise of being a "planner". When all you have is a hammer, everything looks like a nail...

If someone wants truly objective "advisor" action - they've got to go fee-based.

Very good points.

And a 78 year old who is looking to just get a better ror than what CDs are giving, most likely is not the right candidate to sit down and pay $1000+ for a financial advisor to tell her what to do with her $20K.... that would be paying a 5% fee just for someone to tell her where to invest the money!

And lets remember that most all "fee based advisors" have both their L&H and securities licenses.

Most who advise and sell separate the two with the client. They tell the client that they will do the planning and advise on a course of action. There is a predetermined fee for this.
Then the client can choose to use them to place them in the appropriate products or they can use someone else, its their choice.

The ones who dont sell products, almost always have a referral agreement with a producer that they refer all of their planning clients to.
Either they get put on for a percentage on the apps, or they get very hefty referral fees...
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All great questions to ask. And the answers should come from a properly licensed financial professional - not an insurance agent. I'm out. Later.

Heres the thing about that statement: Life insurance agents are properly lisenced financial professionals.

Whether they have the proper training to advise clients on investment matters is a whole different story.

Annuities are an investment. An investment that you have to have a life insurance license for.
But just because you have the license, does not mean that you have the knowledge to advise people on their situation. This comes from proper training, which many life insurance agents do have.

Plus, many life insurance agents are registered reps as well. So many "insurance agents" actually have more than enough licenses to direct clients toward the most appropriate investment.
But that being said. None of those licenses taught me one bit about what is the appropriate product or path for a client. But the proper training certainly did.

Proper fee based planning is a very comprehensive process. And one that most people of moderate means simply dont need when they just want a better ror on one portion of their assets.

Just because you, or the people that you work with do not have the training in this, does not mean that other agents do not.



And on another note... if this woman goes to a fee based advisor and tells him that she wants a better rate of return on $20K. He most likely isnt going to charge a fee, and will just sell her an annuity, CD, or bond.... or laugh and refer her to an insurance/investment guy....

 

[arnguy]

Possibly after fact-finding an annuity may be suitable, but at that age IMO only an immediate annuity is what I would recommend.

 

[scagnt83]

Possibly after fact-finding an annuity may be suitable, but at that age IMO only an immediate annuity is what I would recommend.

The only annuity you would recommend??
If she didnt need immediate income from this money an immediate annuity would be a totally unsuitable product for her!!!!


The fact remains that there is not nearly enough info on the OP to give cut or dry answers to this situation.

 

[Newby]

Very good points.

And a 78 year old who is looking to just get a better ror than what CDs are giving, most likely is not the right candidate to sit down and pay $1000+ for a financial advisor to tell her what to do with her $20K.... that would be paying a 5% fee just for someone to tell her where to invest the money!

And lets remember that most all "fee based advisors" have both their L&H and securities licenses.

Most who advise and sell separate the two with the client. They tell the client that they will do the planning and advise on a course of action. There is a predetermined fee for this.
Then the client can choose to use them to place them in the appropriate products or they can use someone else, its their choice.

The ones who dont sell products, almost always have a referral agreement with a producer that they refer all of their planning clients to.
Either they get put on for a percentage on the apps, or they get very hefty referral fees...
- - - - - - - - - - - - - - - - - -


Heres the thing about that statement: Life insurance agents are properly lisenced financial professionals.

Whether they have the proper training to advise clients on investment matters is a whole different story.

Annuities are an investment. An investment that you have to have a life insurance license for.
But just because you have the license, does not mean that you have the knowledge to advise people on their situation. This comes from proper training, which many life insurance agents do have.

Plus, many life insurance agents are registered reps as well. So many "insurance agents" actually have more than enough licenses to direct clients toward the most appropriate investment.
But that being said. None of those licenses taught me one bit about what is the appropriate product or path for a client. But the proper training certainly did.

Proper fee based planning is a very comprehensive process. And one that most people of moderate means simply dont need when they just want a better ror on one portion of their assets.

Just because you, or the people that you work with do not have the training in this, does not mean that other agents do not.



And on another note... if this woman goes to a fee based advisor and tells him that she wants a better rate of return on $20K. He most likely isnt going to charge a fee, and will just sell her an annuity, CD, or bond.... or laugh and refer her to an insurance/investment guy....

I agree with what you said except a fixed or indexed annuity is NOT considered an investment. To be an investment your principle amount MUST be at risk.

This may sound like I am splitting hairs again but it is EXACTLY what will get you into trouble. Never call ANY insurance product an investment including fixed and fixed indexed annuities.

 

[arnguy]

The only annuity you would recommend??
If she didnt need immediate income from this money an immediate annuity would be a totally unsuitable product for her!!!!


The fact remains that there is not nearly enough info on the OP to give cut or dry answers to this situation.

You are entitled to your opinion; however, at that age from the limited info available IMHO I would be hard pressed to recommend anything other than an IA. As you pointed out, more facts are needed to make a truly intelligent recommendation.