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- #51
Rate Search Inc.
- Thread starter johnrocks
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- 11,280
No not at all. They have different crediting strategies. Annual point to point for example works like this.... If thier contract begins on Jan. 1 then they take what the S&p is at on that date. We will say it was at 1000. NOthing that happens over the year matters. What matters is the value of the S&P on Jan. 1 2008(we will say it is 1100 on this date). It earned 10%. Most annual pt. to pt. contracts have a 7% cap, so the client would get 7% the ins. co. gets 3%.
Some do a monthly average. They record what the S&P does at the end of every month for 12 months and then take the average. They usually have a monthy cap on those. Some have a participation rate. Say 80% participation. The client would have got 8%, because only 80% of thier money was able to gain interest. It is definetly easier to explain on paper.
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- #53
- 11,280
At CIB they have calculaters that go back to any ten year period and show you what crediting method worked best. No one knows how the market will perform. Its best to divide the annuity up in to difent accounts. You can put 40% in point to point, 30% in monthly avg. and 10% into the fixed account. All there money doesn't have to have the same crediting method.
I trust CIB in telling me what to do. The annual point to point is the easiest to explain. I know the nasdaq has more up and down spikes which would be better with a annual point to point. S&P is the more popular one. There is a product out now that will credit the contract 2% in the dwon years. I think that is awesome. Of course you just cant look at one feature.
I trust CIB in telling me what to do. The annual point to point is the easiest to explain. I know the nasdaq has more up and down spikes which would be better with a annual point to point. S&P is the more popular one. There is a product out now that will credit the contract 2% in the dwon years. I think that is awesome. Of course you just cant look at one feature.
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- #55
Don't confuse annuities Deferred vs Immediate!
It drives me crazy when someone here or an annuity flyer confuses the tax free ( until withdrawal) benefits of a deferred annuity with the "lifetime income" of a immediate annuity. The only thing in common at this point is the word "annuity." You could just as easily buy an immediate annuity with ANY source of money.
The only other possible connection is that some companies automatically convert a deferred annuity to a immediate annuity but that to me is criminal and another issue.
And...my cousin is helping his aunt who is in a nursing home - is 91, and needs funds and some "friend" put her in a deffered annuity when she was 86!!!
It drives me crazy when someone here or an annuity flyer confuses the tax free ( until withdrawal) benefits of a deferred annuity with the "lifetime income" of a immediate annuity. The only thing in common at this point is the word "annuity." You could just as easily buy an immediate annuity with ANY source of money.
The only other possible connection is that some companies automatically convert a deferred annuity to a immediate annuity but that to me is criminal and another issue.
And...my cousin is helping his aunt who is in a nursing home - is 91, and needs funds and some "friend" put her in a deffered annuity when she was 86!!!
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- #57
My point exactly> I think that a person that would do that for a commission check should be banned from the industry!! There are too many good descent people in this profession to allow a few bad apples to tarnish our image as a whole. There needs to be more education in annuities AND long term care before you just go out there and start selling!1
Not true. Just because the IA has a cap on it doesn't mean the company makes the difference when the crediting strategy exceeds the cap. They, the insurance company, issue the caps as a way to minimize the cost structure of the options they have to purchase. The insurance company pretty much knows what their profit is on any IA contract they issue regardless of what the market does.
- 11,280
I was just explaining what the caps mean. I know the company makes more than what it seems.
- 11,280
And...my cousin is helping his aunt who is in a nursing home - is 91, and needs funds and some "friend" put her in a deffered annuity when she was 86!!!
Most annuity contracts will let you get a percentage every year if you are in the nursing home. Everyone knows there are good agents that explain everything, bad agents that are looking for commissions, and clients that complain even though they are made aware of every feature of a product.
Clients hear what they want to hear. SO what was the purpse of this lady buying the annuity in the first place? Where was her money before? Maybe it was in stocks that would have bankrupt her?
If someone is decieved or just happen to be in a jam, there are companies like peach tree that will buy annuities and give her a lump sum. It sounds like that agent locked up all her money, I would NEVER EVER lock up all of ones money no matter wht the age is.
I know when my parents get that age or start losing good judgement I will make them have a POA, ( power of attorney)
