[quote=STL Indy]

The MasterDex 10 is complete garbage, as are most of Allianz’s fixed annuities (thanks to their crediting methods).

If you want to get serious about EIA sales, get something like MCP Premium which does monte carlo sim's of pretty much every EIA on the market and gives monthly updated ratings on what the current best (for the customer) EIA's are.

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[quote=joedabrkr] [quote=STL Indy]

The MasterDex 10 is complete garbage, as are most of Allianz's fixed annuities (thanks to their crediting methods).

If you want to get serious about EIA sales, get something like MCP Premium which does monte carlo sim's of pretty much every EIA on the market and gives monthly updated ratings on what the current best (for the customer) EIA's are.

[/quote]

Sounds interesting, but then again if I were to get involved in using that product line I want to pick something reliable and decent and use it consistently for a long time, not change monthly based upon someone's monte carlo analysis.

Generally I'm pretty convinced that EIA's are a pretty raw deal for clients.
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That's pretty much the nature of EIA's.  They're always coming out with new ones, and the ones that you sold 12 months ago may have changed their moving parts so that their not as attractive anymore as what can currently be sold.  ING's Secure Index product (with monthly averaging as the crediting method) has been the leader and highest rated by the MCP Premium software for the past year (which is completely unbiased and not affliated with any insurance companies or FMO's).

What do you all think of Equity Indexing as the mechanism driving a cash value life insurance policy?  I know that Pacific Life has a product that functions like that.  Essentially, you get the guaranteed return similar to that of a UL with a floor, but you also have the chance (Again, I said “chance”.) of higher returns if the market performs well.  Of course, the market returns do not include dividends.  I’ve thought long and hard about EIAs and indexing in general.  If perhaps you could make a case, is this it?  Am I missing something?  Has anyone actually sold this product?

Soothsayer,

You are missing something.  Over a long period of time, there is absolutely no reason to expect an equity indexed UL policy to perform any better than a traditional UL policy.   The main problem is not that it's equity indexed, but that it is universal life.   In the vast majority of cases, UL is a terrible insurance to own.

People buy UL because it sounds like whole life, but at a cheaper cost.  In reality, it is nothing more than term insurance with a side fund.  The problem is that term insurance is terrible for long term insurance needs.    Term is meant for temporary needs. 

The buildup of cash in UL policies is mainly an illusion.  When one takes cash out of the policy and couples this with the increasing cost of the insurance these policies usually fall apart on themselves.

I've been doing this for a long time and I have never seen a UL policy that was not in danger of blowing up at older ages. (The exception is guaranteed UL policies.  These can make sense at older ages.)

On EIAs in general.....

I have never sold one, but...

They can be ok if the following conditions apply:

1) The client is looking for a fixed product
2) The client knows that they don't mind having to hold the product for a long period of time due to surrender charges
3) The client wants the opportunity to do better than other fixed products, but understands that they can do worse.

[quote=anonymous]

On EIAs in general.....

I have never sold one, but...

They can be ok if the following conditions apply:

1) The client is looking for a fixed product
2) The client knows that they don't mind having to hold the product for a long period of time due to surrender charges
3) The client wants the opportunity to do better than other fixed products, but understands that they can do worse.

[/quote]

Do you believe that anybody would willingly buy one if they were presented with alternatives?  I don't.

For the younger people.  If you decide to make this a career you're going to have to make peace with yourself on several levels.  In a way you're going to have to set your moral values aside--park them at the door.

The chief reason is because of how you're paid--fees and commissions, rather than a percentage of the growth your client experiences. That is an inherent conflict of interest.

Often times--VERY OFTEN--the appropriate action is to take no action at all, but if you don't get the client to do something you're not going to get paid.

So you "sell" the client on someting.

What is offensive--especially since I am no longer selling or supervising those who do--is the tendency for a great many sociopathic sales people to recommend things based on the size of the commission or fee they stand to earn instead of what is appropriate for an investor.

Take and EIA.  Lock your money up for years with huge penalties in a product that fluctuates with the stock market.  How smart is that?

Somebody--I think it was EAGU--pointed out that the insurance companies are buying CDs for the safety of principal component and options or futures on the benchmark index for the growth component.

I'll bet they're even more simple than that.  I'll bet the insurance company is simply sitting on cash for the safety of principal part and buying options or futures for the growth component--not even buying CDs with the cash.

I ask you this.  Why should your client pay 10% of what they invest for a scheme as simple as that?  If you had $200,000 you could put it in the bank to earn interst and buy two long term index calls and you've got essentially the same thing.  Instead of paying $20,000 plus trails you'll spend $8 at Fidelity.

In a sense the only people who use advisors are people who are too naive to know what they're doing and who have not yet bothered to look into what they're doing.

There are a lot of them, but as you approach them do your best to be honest.  It's supposed to be how much THEY MAKE from something you sell them, not how much you make.

I ask you this.  Why should your client pay 10% of what they invest for a scheme as simple as that?  If you had $200,000 you could put it in the bank to earn interst and buy two long term index calls and you’ve got essentially the same thing.  Instead of paying $20,000 plus trails you’ll spend $8 at Fidelity

While I don't disagree with you at all on the above post, I must point out that you have been told over and over and over that the client does NOT pay any fees or take a commission hit when they buy an annuity.  If you are going to argue about a product please get your facts straight.

There is no commission paid by the client to purchase an EIA or B Share VA.  Edward Jones is the only firm that I know of that offers an A Share annuity so I don't include that in the above paragraph.

[quote=babbling looney]

I ask you this.  Why should your client pay 10% of what they invest for a scheme as simple as that?  If you had $200,000 you could put it in the bank to earn interst and buy two long term index calls and you've got essentially the same thing.  Instead of paying $20,000 plus trails you'll spend $8 at Fidelity

While I don't disagree with you at all on the above post, I must point out that you have been told over and over and over that the client does NOT pay any fees or take a commission hit when they buy an annuity.  If you are going to argue about a product please get your facts straight.

There is no commission paid by the client to purchase an EIA or B Share VA.  Edward Jones is the only firm that I know of that offers an A Share annuity so I don't include that in the above paragraph.

[/quote]

For the umpteenth time, if the sales person earns 10% it is at the client's expense.  There is no free lunch and the insurance industry is not a non-profit organization.

You're being intellectually dishonest if you believe that your commissions are created out of thin air simply because they don't appear on the client's statement.

For the umpteenth time, if the sales person earns 10% it is at the client's expense. 

No sh*t.  No one is arguing that.   

But...... it is not the same thing as paying a 10% commission.  You keep using the example of paying out of the principal and thereby reducing the amount invested into an annuity.  This is incorrect and makes it look as if you haven't a grip on the product you are discussing.  If you want us to take your arguments seriously then you need to use correct facts.

[quote=babbling looney]

For the umpteenth time, if the sales person earns 10% it is at the client's expense. 

No sh*t.  No one is arguing that.   

But...... it is not the same thing as paying a 10% commission.  You keep using the example of paying out of the principal and thereby reducing the amount invested into an annuity.  This is incorrect and makes it look as if you haven't a grip on the product you are discussing.  If you want us to take your arguments seriously then you need to use correct facts.

[/quote]

Suppose I invest $100,000 in an EIA when the S&P 500 is at 567.

Further suppose that three months later the index is still at 567 and I need to liquidate my investment.

How much will I get back?

one of too things oh great and exaulted one

1.) you being a newbie and all - the rep didn't conduct a proper review of your needs (KYC)

2.) as a client you withheld info from your rep

p.s.   stick to postings about your "cat toy" as that seems to be the limit of you "vast" knowledge ....

[quote=NASD Newbie][quote=babbling looney]

For the umpteenth time, if the sales person earns 10% it is at the client's expense. 

No sh*t.  No one is arguing that.   

But...... it is not the same thing as paying a 10% commission.  You keep using the example of paying out of the principal and thereby reducing the amount invested into an annuity.  This is incorrect and makes it look as if you haven't a grip on the product you are discussing.  If you want us to take your arguments seriously then you need to use correct facts.

[/quote]

Suppose I invest $100,000 in an EIA when the S&P 500 is at 567.

Further suppose that three months later the index is still at 567 and I need to liquidate my investment.

How much will I get back?

[/quote]

Still not the same thing.   You can argue apples and oranges all you want but the client does not pay a commission to purchase an annuity.  Like all annuities there is a surrender charge if you  break the contract.  Like all annuities you get your initial investment back less the surrender charge that is in the contract.   However, there are some EIAs that allow you to have access to up to 40% of your principal without penalty and most allow you an annual 10% free withdrawal. 

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[quote=anonymous]

Soothsayer,

You are missing something.  Over a long period of time, there is absolutely no reason to expect an equity indexed UL policy to perform any better than a traditional UL policy.   The main problem is not that it's equity indexed, but that it is universal life.   In the vast majority of cases, UL is a terrible insurance to own.

People buy UL because it sounds like whole life, but at a cheaper cost.  In reality, it is nothing more than term insurance with a side fund.  The problem is that term insurance is terrible for long term insurance needs.    Term is meant for temporary needs. 

The buildup of cash in UL policies is mainly an illusion.  When one takes cash out of the policy and couples this with the increasing cost of the insurance these policies usually fall apart on themselves.

I've been doing this for a long time and I have never seen a UL policy that was not in danger of blowing up at older ages. (The exception is guaranteed UL policies.  These can make sense at older ages.)

[/quote]

Do you work for Northwestern Mutual?  I'm not trying to be funny--just wondering.

[quote=babbling looney]

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[/quote]

I understand them.  My point is that it's disingenuous to deny the huge chop just because the client does not see it.

They are rarely appropriate, if they were they would not have to pay so much juice to get them sold.

[quote=NASD Newbie]

[quote=babbling looney]

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[/quote]

I understand them.  My point is that it's disingenuous to deny the huge chop just because the client does not see it.

They are rarely appropriate, if they were they would not have to pay so much juice to get them sold.

[/quote]

THe juice is to compensate me for taking the assets out of production for 10 years. It must be tough on you to have NO capacity for independent, creative thought.

[quote=cranky sob][quote=NASD Newbie]

[quote=babbling looney]

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[/quote]

I understand them.  My point is that it's disingenuous to deny the huge chop just because the client does not see it.

They are rarely appropriate, if they were they would not have to pay so much juice to get them sold.

[/quote]

THe juice is to compensate me for taking the assets out of production for 10 years. It must be tough on you to have NO capacity for independent, creative thought.

[/quote]

No, the juice is designed to get you to push an inappropriate investment off on unsuspecting rubes--just like five point muni odd lots and penny stocks.

If you park your ethics at the door you have no problem with them.

[quote=NASD Newbie][quote=cranky sob][quote=NASD Newbie]

[quote=babbling looney]

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[/quote]

I understand them.  My point is that it's disingenuous to deny the huge chop just because the client does not see it.

They are rarely appropriate, if they were they would not have to pay so much juice to get them sold.

[/quote]

THe juice is to compensate me for taking the assets out of production for 10 years. It must be tough on you to have NO capacity for independent, creative thought.

[/quote]

No, the juice is designed to get you to push an inappropriate investment off on unsuspecting rubes--just like five point muni odd lots and penny stocks.

If you park your ethics at the door you have no problem with them.

[/quote]

You should see the natural gas deal that I'm working on. You'd be REALLY jealous of how much I'm gonna make off of it! I'm sorry you failed out of the industry.

[quote=cranky sob][quote=NASD Newbie][quote=cranky sob][quote=NASD Newbie]

[quote=babbling looney]

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[/quote]

I understand them.  My point is that it's disingenuous to deny the huge chop just because the client does not see it.

They are rarely appropriate, if they were they would not have to pay so much juice to get them sold.

[/quote]

THe juice is to compensate me for taking the assets out of production for 10 years. It must be tough on you to have NO capacity for independent, creative thought.

[/quote]

No, the juice is designed to get you to push an inappropriate investment off on unsuspecting rubes--just like five point muni odd lots and penny stocks.

If you park your ethics at the door you have no problem with them.

[/quote]

You should see the natural gas deal that I'm working on. You'd be REALLY jealous of how much I'm gonna make off of it! I'm sorry you failed out of the industry.

[/quote]

What I did not leave was a string of ruin in my wake.

I'm not jealous of any of the sociopaths I've encountered in this business--there is no reason to be in the long run.

[quote=NASD Newbie][quote=cranky sob][quote=NASD Newbie][quote=cranky sob][quote=NASD Newbie]

[quote=babbling looney]

I agree with you that an EIA is bad investment for the client. However, these questions that you keep repeating and repeating and your fallacious examples make us think that you don't have a clue on how annuities work.

[/quote]

I understand them.  My point is that it's disingenuous to deny the huge chop just because the client does not see it.

They are rarely appropriate, if they were they would not have to pay so much juice to get them sold.

[/quote]

THe juice is to compensate me for taking the assets out of production for 10 years. It must be tough on you to have NO capacity for independent, creative thought.

[/quote]

No, the juice is designed to get you to push an inappropriate investment off on unsuspecting rubes--just like five point muni odd lots and penny stocks.

If you park your ethics at the door you have no problem with them.

[/quote]

You should see the natural gas deal that I'm working on. You'd be REALLY jealous of how much I'm gonna make off of it! I'm sorry you failed out of the industry.

[/quote]

What I did not leave was a string of ruin in my wake.

I'm not jealous of any of the sociopaths I've encountered in this business--there is no reason to be in the long run.

[/quote]

If it helps to call successful people names, so you don't have to commit suicide for being a failure, I support you. Those sociopaths are very, very naughty.

babbling looney, you can't agree that an eia is a bad investment because...

An EIA is a savings vehicle, not an investment.  It carries no market risk, but plenty of other risk.  Therefore, a securities license is not needed to sell the product.

I must also commend you for pointing out that Putsy's posts show that he doesn't understand the product (even if he's correct about it usually not in the client's best interest)