Why Keep A VUL Whose CV is More Than The Original Coverage.

[Guest]

James you stated:

Plus my money is not at risk (savings should not be at risk), and you and John don't know what is going to happen in the next 10, 20 or 30 years now do you?

Well James I do know what will happen to my savings in 30 years. The buying power will be eroded by inflation.

James, a person needs to divesify: That means have money in different vehicles to be able to respond to whatever curve balls life and the economy throw your way.

Sure, I will agree everyone needs some savings. They also need stock investment for a long term hedge against inflation.

 

[James]

Where's your fiancial training from James?

LOL, listen are you debating my numbers? You claim a 17% average return, that doesn't mean anything at all!

The fact is, in seven years you increase your initial investment $7,888.00 give or take a few bucks. In reality that is about 6.5% in actual return, you see the difference in actual return Vs average interest? You can not average interest and come up with anything but hyped smoke and mirrors!

Ps, I cheated myself out of a years interest. If I put down 10 grand in a 15 year annuity that has a 10% bonus, in seven years I'll have $15,478.10, if I see a 5% rate over those 7 years initially not the $14,741.50 as I suggested. Which means I'm right behind you and I have no real risk from a loss and I close the gap suggested by marcircus by nearly half becuase I cheated myself out of a years interest initially.

 

[James]

James you stated:

Plus my money is not at risk (savings should not be at risk), and you and John don't know what is going to happen in the next 10, 20 or 30 years now do you?

Well James I do know what will happen to my savings in 30 years. The buying power will be eroded by inflation.

James, a person needs to divesify: That means have money in different vehicles to be able to respond to whatever curve balls life and the economy throw your way.

Sure, I will agree everyone needs some savings. They also need stock investment for a long term hedge against inflation.

I'll agree with you about diversification, I'm all for it! Yet the stock market on a individual basis is quite deceptive and in reality doesn't beat a good insurance contract by that much! Now if you live through a severe depression and can pick up Coke Cola stock for nickels or in my case pick up Chrysler stock for less then 3 dollars a share you can surely make big money! Yet in most cases on the day to day living most will not realise a return greater then 4% as I have suggested using Mutual Funds. Now there are some that have paid on average of 8%-10% but these are not flashy and they do not glitter. They have solid management and have been conservative, almost as much as Insurance Carriers, but you'll see very few FP'ers in real life or in the media pushing them.

 

[Guest]

James, you stated:

If I put down 10 grand in a 15 year annuity that has a 10% bonus, in seven years I'll have $15,478.10, if I see a 5% rate over those 7 years initially not the $14,741.50 as I suggested.

James, you are not factoring in any expenses on that annuity. No commisions, no administrative charges, no yearly account mainenance fee, nothing. So, I think your numbers, if anything, are too generous to the annuity (ok for back of the envelope work).

 

[Crabcake Johnny]

As I suspected - another piker with no training spouting verbal diarrhea. We're done here - I don't argue with people who clearly don't know what they're talking about. As least get trained or invest youself before you give others advice.

James that 16% return fund is one of the investments I have. I have stock where I'm up over 80% over the past 10 year. But there's a saying about arguing with fools.

 

[Guest]

According to James:

most will not realise a return greater then 4% as I have suggested using Mutual Funds.

James, I mean this very respectfully. If you really believe this, you would do yourself a world of good by doing some solid research. This is way off base. (Unless you mean they are frequent traders whose profits get eaten up by commissions, expenses and taxes).

 

[Crabcake Johnny]

James, you stated:

If I put down 10 grand in a 15 year annuity that has a 10% bonus, in seven years I'll have $15,478.10, if I see a 5% rate over those 7 years initially not the $14,741.50 as I suggested.

James, you are not factoring in any expenses on that annuity. No commisions, no administrative charges, no yearly account mainenance fee, nothing. So, I think your numbers, if anything, are too generous to the annuity (ok for back of the envelope work).

James hasn't the faintest idea as to what he's talking about:

http://www.nasd.com/InvestorInforma...ity-IndexedAnnuities-AComplexChoice/index.htm

Do EIAs and other tax-deferred annuities provide the same advantages as 401(k)s and other before tax retirement plans?


No, 401(k) plans and other before-tax retirement savings plans not only allow you to defer taxes on income and investment gains, but your contributions reduce your current taxable income. That's why most investors should consider an EIA and other annuity products only after they make the maximum contribution to their 401(k) and other before-tax retirement plans. To learn more about 401(k)s, please read Smart 401(k) Investing.


Is it possible to lose money in an EIA?



Yes. Many insurance companies only guarantee that you'll receive 90% of the premiums you paid, plus at least 3% interest. Therefore, if you don't receive any index-linked interest, you could lose money on your investment. One way that you could not receive any index-linked interest is if the index linked to your annuity declines. The other way you may not receive any index-linked interest is if you surrender your EIA before maturity. Some insurance companies will not credit you with index-linked interest when you surrender your annuity early.


Caution! Some EIAs allow the insurance company to change participation rates, cap rates, or spread/asset/margin fees either annually or at the start of the next contract term. If an insurance company subsequently lowers the participation rate or cap rate or increases the spread/asset/margin fees, this could adversely affect your return. Read your contract carefully to see if it allows the insurance company to change these features.

 

[James]

As I suspected - another piker with no training spouting verbal diarrhea. We're done here - I don't argue with people who clearly don't know what they're talking about. As least get trained or invest youself before you give others advice.

James that 16% return fund is one of the investments I have. I have stock where I'm up over 80% over the past 10 year. But there's a saying about arguing with fools.

As I suspected another hack that can't hold their own! I gave you the numbers, now if you can't live with it that is fine but my numbers are accurate now are they not? LOL, I can tell the truth is killing ya! Fact is in a seven year period your precious small cap fund didn't beat a average annuity by that much, so if you have a problem with that take it up with your small cap manager.

James, you are not factoring in any expenses on that annuity. No commisions, no administrative charges, no yearly account mainenance fee, nothing. So, I think your numbers, if anything, are too generous to the annuity (ok for back of the envelope work).

No I didn't, I use a realistic number, now if you want to argue a fools game go ahead but most agree a good Annuity or a EIA that has solid numbers will return 5% realistically, sometimes they'll do better other times they'll do less.

 

[Crabcake Johnny]

Jame's, who is your EIA through so I can see the past performance.

 

[Crabcake Johnny]

At least know the fees of EIA's: (pretty harsh fees - glad I don't have one!)

http://www.sec.gov/investor/pubs/equityidxannuity.htm

Margin/Spread/Administrative Fee. The index-linked interest for some annuities is determined by subtracting a percentage from any gain in the index. This fee is sometimes called the “margin,” “spread,” or “administrative fee.” In the case of an annuity with a “spread” of 3%, if the index gained 9%, the return credited to the annuity would be 6% (9% - 3% = 6%).