the reason for the over-reaching is they have been positioned and marketed as 'investments' & misrepresented-hence more regulation.
Equity Index Life Insurance Products
- Thread starter Ficklone02
- Start date
Arguably a valid point (i.e.…although I'm not sure you can fairly lump all agents and/or insurance companies in the same boat as your statement suggests ) , but still doesn't justify the SEC's involvement in a product that is outside their jurisdiction. Moreover, the SEC is clearly not doing the job with the products the DO have jurisdiction over. Can you say Madoff?
Madoff ran a non-registered product which is not the SEC's responsiblity to supervise. however in the next year you will see non-registered products (aka Hedge Funds) come under the watch of the SEC. The problem is that 99% of teh people at teh SEC are not smart enough to know waht they are looking for.
Not exactly true. SEC has jurisdiction over investment advisory firms. See this article from Reuters:
January 6th, 2009
Why did the SEC fail to spot the Madoff case?
true...just as the saying "not all hawkeyes are bad: it is the 99% that give 1% a bad name.". When dealing with folks that have been raped with these products it is disappointing to see how absent the insurance commissioners have been.
Quick question...how exactly, and be specific, have folks been raped by this product? Remember...be specific. I am curious because my family is happy as larks and so are the people I know that have these products as well. Ok, it's only one other family that I know of...not exactly something people talk about. I'm curious at what ways financial advisers have made their clients money the past few years. Our policies (my family) are all on the positive side while my 401k and other investments are being destroyed.
1. misrepresentation
2. illuquidity due to unreasonable surrender periods
3. surrenders upon death
4. sold as something they are not
5. undue pressure by EIA sales people that make upwards of 15% commision on the products.
6. sold to seniors that will never be able to access their money
7. very complex and and while sounding like good 'investments' they are complex tools that are hard to totally undestand.
The above are based upon my professional experience, use the google machine and you can find more.
Ask any academic, fee based advisor, or fiduciary...or anyone that doesn't make commission selling them and it is pretty rare to find someone that finds them to be a good vehicle for the long haul.
jmb
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Dude asked for specifics. You just provided a bunch of rhetoric. If you in fact have examples of consumers that were negatively affected by these, you should be able to provide specific numbers. At this point, you're just spouting off a bunch of stuff that can neither be verified or questioned. Maybe that is your goal?
Give us something to consider and wrap our arms around. This list is truly unhelpful to either side of the argument.
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Although there has been a spirited discussion in regards to the effects of using this financial product.....I still have no idea what it is. Can anyone expound upon answering the original question?
wikipedia does a decent job answering your question: Equity-indexed annuity - Wikipedia, the free encyclopedia
"dude"?
"rhetoric"?
these in fact are the VERY reason they are being more regulated. what more do you want? Joe Smith's of west des moines, estate was jacked with a 11% surrender upon his death to get the death benefit associated with his EIA? Get a grip. You are summarily dismissing me. Fine. Do the research and find out what is wrong with them. You tell me your family is happy with them...wow that anectdote must make my analysis of the void.
keep selling those eia's and good luck-
j
Tons of misinformation here regarding EIAs. I don't sell 'em, but I've worked on the in-house side for two companies that sell EIAs for almost 8 years now. To say they're risky is just bogus. Unsafe is rather untrue. They're good products. I don't think they're the next best thing since sliced bread, however - but if used correctly - they can be very good.
It's generally all about the company and product you buy. And, if you buy a 15 year product, don't surrender it after 3 years and then whine (unless your agent fooled you, which sucks, but part of that blame does go on you too - for not knowing what you bought).
I see no need to "educate" further here as this thread is mostly a "I know more than you" mudslinging contest with not a ton of fact.
It's generally all about the company and product you buy. And, if you buy a 15 year product, don't surrender it after 3 years and then whine (unless your agent fooled you, which sucks, but part of that blame does go on you too - for not knowing what you bought).
I see no need to "educate" further here as this thread is mostly a "I know more than you" mudslinging contest with not a ton of fact.
who has said they are risky? they are often misused, rarely fully explained, have terrible surrender schedules, weigh heavily in the favor of insurance companies and the agent selling them, and have inherent problems the way the are marketed as 'stock market' oriented.
I will agree with out doubt product details make a difference as does the company creating them. "If used correctly"-is the key. They have a reputation of being peddled by abusive agents particularly in regards to seniors....
I appreciate you have worked for an insurance company and may even work with these products. However; I would encourage you to educate yourself by viewing EIA's with a critical eye-not your corporate bias. When doing a real analysis of these products you would realize where my concern comes from.
I worked for an EIA company. I would never buy one myself. Also, 99% of the agents that sell the DO NOT know what they are selling. These companies are doing very well because of the number of people who surrender them losing up to 30% of their money.
Also, the companies walk the fine line of ethical. They know the agent mis-sell them, but don't do a lot to inform them as it might **** them off. You can't **** off the bread winners.
Also, the companies walk the fine line of ethical. They know the agent mis-sell them, but don't do a lot to inform them as it might **** them off. You can't **** off the bread winners.
I am fully aware of the ins/outs of these products, I certainly don't need someone on the internet to tell me that. I rarely have bias, Cyclone wise or company wise. There are good and bad things about almost every type of investment, equity-indexed annuities (or any type of annuity) are no different. Knowing how to use them properly is key - as is educating yourself.
Not true. It's actually the bad agents that ruin it for the majority - causing people to toss these "stats" out as if they're true. Trust me, I've seen some bad agents at work and they're rather slick in their "work". But most of them are not this way.
As for the surrender comment - amusing. Companies generally don't start making cash on an annuity contact until somewhere between year 3-6 - depending on the product. Surrender charges are mostly there to recoup the money that is lost upon early surrender. Especially on the bonus products.
As I said, I know a bit more about these than the general administrative rep. To paint them as perfect or evil would be naive.
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golly add this to the long list which includes...everything that you are an expert on. i would love to debate this with you face-face. call me at my office and i will buy you lunch and if you convince me -I will put you in a category that nobody else has been successful in: convincing me these are good products. I have done the research(my assistant spent two weeks building spread sheets of products that might actually be worthy, until we crunch the numbers) and have yet to find one that is worth the marketing slicks that you home office people put together. I will show the fraility and the actuary assumptions that skew the returns to the insurance company. Furthermore; I will have 4 other CFP's, one MBA join us and you can convince all of us. We manage 250 mm dollars and could easily committ a solid chunk of money to your product...heck if you do a really good job I can probably get you time in front of FPA and you can convice other folks how awesome these are.
IM me for my office number in Urbandale. Lunch is on me, if you can prove how awesome these products are. Just so you know you will be about the 14th person through our office that has tried to prove to us how awesome they are. The last one left in agreement that the product sucked.
Only stipulation is that I will need a copy of whatever product you are sending before our time together. A policy with the identifiers removed will be sufficient.
I am waiting.
I've never been a big fan of insurance products. I've got a little term insurance, but other then that I figure I'll save the extra fees associated with insurance and just stick the money into the stock market and real estate. Perhaps if you're in your retirement years and am very worried about captial preservation, return, and tax benefits, it might make some sense.
A few years ago, we met with a friend who worked for Life Investors. He convinced us we should stick a little money in one of their products. It was supposed to give you stock market return with low risk and capital preservation, blah, blah, blah. We stuck a couple thousand in it. To make a long story short, we got disgusted with the the speed of his work and decided to pull the money out a few years later and stick it into the same fund, but through Scottrade. They transferred if over, but bang we got hit with a $300 fee to do it. I never argued about it, because it was small dollars and I ddin't want to mess the friendship up, but what a crock of balony. The return on that fund has been very mediocre relative to my other stuff in regular mutal and index funds.
A few years ago, we met with a friend who worked for Life Investors. He convinced us we should stick a little money in one of their products. It was supposed to give you stock market return with low risk and capital preservation, blah, blah, blah. We stuck a couple thousand in it. To make a long story short, we got disgusted with the the speed of his work and decided to pull the money out a few years later and stick it into the same fund, but through Scottrade. They transferred if over, but bang we got hit with a $300 fee to do it. I never argued about it, because it was small dollars and I ddin't want to mess the friendship up, but what a crock of balony. The return on that fund has been very mediocre relative to my other stuff in regular mutal and index funds.
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