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- #11
- 1,802
So was it the Aviva Income Select Bonus or the Allianz MasterDex X?
Aviva Income Select bonus
Unethical Bonus Annuity Presentation
- Thread starter insuranceexec
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Aviva Income Select bonus
SFTICA
New Member
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All index products are dogs with fleas.
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- #13
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Tell that to my clients who I took out of VA's last year; And yes I am securities licensed. Every annuity has good and bad points. The trick is to find the good you like and the bad that you can live with. Go back and try to develop a half decent VA and then come back to the board and post something meaningful. I look forward to your future posts.
Spoken like a true securities only guy. I once thought that way as well. Products have gotten much better with much shorter surrender periods. And lets not forget, the index annuity should never be compared with a securities investment. They are two different animals and not designed to do the same thing.
How much wealth has been lost in the market over the last 12 months? Now look at how much wealth was preserved in index annuities in the last 12 months. They aren't for everyone, but you shouldn't paint with such a broad brush.
- 14,808
I keep hearing "in down times like this the client would have been better off with an annuity."
No - in down times like this the client would have been better off with a CD.
No - in down times like this the client would have been better off with a CD.
I believe you are taking that quote a little out of context. Whoever said that was likely referring to being better off than if in the market. In addition, there are features that could make an index annuity more attractive and beneficial than a CD.
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- #17
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The problem with a CD is that they were never intended to keep with the core rate of inflation. The two things that the Federal Government keep out of the inflation rate (CPI) is food and energy. The gov't releases a statement stating that inflation was only 4% when in fact it is really around 10% when factoring in the two aforementioned sectors. The gov't has an incentive to make the inflation rate look lower than what it really is to keep China and the other foreign governments from liquidating their positions in US currency. Yes in a down year a fixed interest rate or a CD is better than no return at all. The client I am referring to on here is wanting a lifetime income only. The Aviva product that is mentioned on here pays a guaranteed 7.2% on the income side.
Believe what you like on wikipedia, but CD's were designed to increase the cash reserves of banks and financial institutions while paying a very modest interest rate. Again the problem with the reseves of these establishments is that the reserves have been allowed to dwindle down to next to nothing; leaving very little room for error. And then you have IndyMac need I say more.
- 1,926
The Aviva product that is mentioned on here pays a guaranteed 7.2% on the income side.
What does that really mean? Assuming there is 100,000 in the annuity when one starts their income stream, are they guaranteeing the recipient and/or heirs will receive the 100,000 plus 7.2% per year? How can a company truly guarantee such a yield, seems a bit misleading.
What does that really mean? Assuming there is 100,000 in the annuity when one starts their income stream, are they guaranteeing the recipient and/or heirs will receive the 100,000 plus 7.2% per year? How can a company truly guarantee such a yield, seems a bit misleading.
Jack,
In a down market most index annuities have a reset feature to allows the annuitant to start the following year from the new starting point. Hypotheticall speaking if a client bought an index annuity January 1st and the S&P500 was at a $1000 and the following January of the next year the S&P500 was at $900. The client's upside performance would have a new starting point at $900. So the client would now participate in the markets performance upside from $900. It is important to remember all index annuities are not the same, please be careful in selecting the best product for your clients needs.
Andrew Sheen
Senior Vice President
CDA of America
CDA International
Phone (561) 683-3030 Fax (561) 687-5999
[email protected]
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First of all, there is nothing at all wrong with taking someone out of a poorly designed annuity and using the bonus of the new annuity to pay the penalty on the old annuity. It is done all the time. Any decent insurance company is going to put you through the suitability wringer on this to make sure you are doing the right thing.
You have to be careful that you are talking about a NET plus since on the transfer the penalty is taken out before the new bonus is applied. Also, you had better have a significantly better product and a solid reason for making the move.
On the 7.2% issue, that amount is only guaranteed as a minimum amount of growth on the INCOME SIDE of the ledger, or "income bucket" as we prefer to call it. What I tell clients who can't believe someone can pay them 7.2% is:
"Look at it from the insurance company side. They aren't really giving you anything until you start taking income. At that point they don't guarantee a minimum. In the meanwhile, they have your money and are giving up nothing but some entries on a ledger sheet that is carried over to your annual statement."
"The longer you delay taking income, the bigger your account gets and the larger the percentage of income you can take. BUT, you are now older and the actuaries know how much guaranteed lifetime income you are likely going to see."
The whole thing is brilliant from the insurance company perspective. It can also be a great deal for the customer who wants guarantees as to how much income they can get at any particular stage of their life.
