What do we do in a worst case scenario?
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[quote=the word]
Dude, balls up and name the product. I’ll take my blinders off and still be able to see it is crap. If it is not crap I will gladly admit as much.
Do you wonder how the ins. co. is able to pay that cash flow?
[/quote]What's in it for me? You're so frightened that you think you're gonna spend your life in arbitration because of VA's. You don't deserve to know which product.
[quote=snaggletooth]What up Word, it’s no joke. It’s all about how you look at numbers.
Here's the thing with the VA's. Despite what some people think, they are for guaranteed income. If you have purchased a VA, you have to be fully committed to using it as an income producing bucket. Here's why: If things continue to be this bad or worse, the VA's will raise the fees. Currently, your rider might be 60 or 70 bps, but they could go as high as say, 1.25%. This is a good thing. Remember, you bought this for the income you will get...guaranteed. The other hedging strategies that are employed, such as options or moving to a fixed bucket, or whatever else it might be, are also used to mitigate the risk of a big disparity between account value and income base. The insurance companies must keep in reserve what they guarantee. They must physically have this. When they go to pay out, they aren't going to pay everyone out at the same time, so that shouldn't be too bad. As has been discussed, if the insurance company sells its annuity division, the new company must honor its guarantees. The fact is, I feel safer being in a VA than not being in a VA. Some of my biggest clients are down 30-40% easy. If they weren't with me, they probably wouldn't have any money in VA's. But in late 2007/early 2008, 1/3 - 1/2 of their money was put into VA's. Their income bases will increase by 7% over the year. Their mutual funds are still down 35% with no guarantees. What up Hank. You make me feel good.[/quote]Whaddup G? I'm not bringing you to orgasm, am I? Don't waste your time with this guy. Throwing facts at someone like him will not override a naive opinion.
[quote=snaggletooth]What up Word, it’s no joke. It’s all about how you look at numbers.
Here's the thing with the VA's. Despite what some people think, they are for guaranteed income. If you have purchased a VA, you have to be fully committed to using it as an income producing bucket. Here's why: If things continue to be this bad or worse, the VA's will raise the fees. Currently, your rider might be 60 or 70 bps, but they could go as high as say, 1.25%. This is a good thing. Remember, you bought this for the income you will get...guaranteed. Is this a joke. Rising fees are good. Fees are already going up b/c they are a percentage of guarantee not account value. The other hedging strategies that are employed, such as options or moving to a fixed bucket, or whatever else it might be, are also used to mitigate the risk of a big disparity between account value and income base. The insurance companies must keep in reserve what they guarantee. They must physically have this. When they go to pay out, they aren't going to pay everyone out at the same time, so that shouldn't be too bad. As has been discussed, if the insurance company sells its annuity division, the new company must honor its guarantees. This is where i get worried. This is like a gentlemans agreement, but nobobdy has to buy these things. The fact is, I feel safer being in a VA than not being in a VA. Some of my biggest clients are down 30-40% easy. If they weren't with me, they probably wouldn't have any money in VA's. But in late 2007/early 2008, 1/3 - 1/2 of their money was put into VA's. Their income bases will increase by 7% over the year. Their mutual funds are still down 35% with no guarantees. No doubt about it. I love selling VA's. I would want a gurantee on my own money. However, i just think we need to slow down right now If you don't, go for it. What up Hank. You make me feel good.[/quote]Like I said, balls up and name you annuity and I will tell you why its not right at the moment. If I am wrong, I will use the annuity and get my clients to sign a form that says “I have Bobby Hull to thank for this fine investment I purchased today.”
[quote=the word]If things continue to be this bad or worse, the VA’s will raise the fees. Currently, your rider might be 60 or 70 bps, but they could go as high as say, 1.25%. This is a good thing. Remember, you bought this for the income you will get…guaranteed. Is this a joke. Rising fees are good. Fees are already going up b/c they are a percentage of guarantee not account value.
As has been discussed, if the insurance company sells its annuity division, the new company must honor its guarantees. This is where i get worried. This is like a gentlemans agreement, but nobobdy has to buy these things. The fact is, I feel safer being in a VA than not being in a VA. Some of my biggest clients are down 30-40% easy. If they weren't with me, they probably wouldn't have any money in VA's. But in late 2007/early 2008, 1/3 - 1/2 of their money was put into VA's. Their income bases will increase by 7% over the year. Their mutual funds are still down 35% with no guarantees. No doubt about it. I love selling VA's. I would want a gurantee on my own money. However, i just think we need to slow down right now If you don't, go for it. [/quote] [/quote] Point 1: Rising fees are good if you've purchased the VA to provide you lifetime income regardless of account value. Look, nobody wants to run out of money. If you want to leave money behind, don't buy a living benefit. BUT, I buy the VA with the intention of getting a check for life, so the client will not run out of income. If that means that the sustainability of this product must be met with rising fees, than DO WHATEVER IT TAKES TO MAKE SURE MY INCOME KEEPS COMING TO ME. As to the fees already going up, yes, your rider fees will go up when account value is down, not M&E. Again, this helps the long-term viability of LIFETIME INCOME. Point 2: I understand your concern. I had the same concerns. The thing is, these are profitable companies. They are worth something to someone, and other insurance companies will most likely back them up in that regard. If it got to the point where the VA side of the business was failing, there would be problems in mutual funds, FDIC, etc...Basically, pick your poison. Point 3: You should diversify amongst companies, types of riders, and be smart about what you are doing. Control what you can control.I think this Bobby Hull guy would actually like that. You just told your clients that Bobby Hull is responsible for the investment they made that they like and probably want to tell their friends about. You might lose your clients and their referrals to a hockey player.Like I said, balls up and name you annuity and I will tell you why its not right at the moment. If I am wrong, I will use the annuity and get my clients to sign a form that says “I have Bobby Hull to thank for this fine investment I purchased today.”
[quote=the word]Like I said, balls up and name you annuity and I will tell you why its not right at the moment. If I am wrong, I will use the annuity and get my clients to sign a form that says “I have Bobby Hull to thank for this fine investment I purchased today.” [/quote]
Like I asked…What’s in it for me?
We’ll just have to agree to disagree. If you think selling a guarantee, when you can’t gurantee that the company issuing the guarantee will exist in six months is prudent, business as usual. I’ll wait it out.
I'm still waiting to find out about this 10% wd for life, as the worst case scenario, Hank.Nothing in it for you.
I'll just assume your a liar until you offer some proof.[quote=the word]We’ll just have to agree to disagree. If you think selling a guarantee, when you can’t gurantee that the company issuing the guarantee will exist in six months is prudent, business as usual. I’ll wait it out.
I'm still waiting to find out about this 10% wd for life, as the worst case scenario, Hank.[/quote]Can you guarantee that the companies in your mutual funds will exist in 6 months? Being the smartest guy in the special olympics doesn't seem to help you much in the business world.
You hold your breath and when I'm ready to tell you, I'll ask around for blue boy. By the way...there's nothing obscure about this guarantee. Many companies offer it. People who understand annuities can EASILY figure out what I'm talking about. I'm not willing to agree to disagree when I'm right and you're wrong. Nice try, though.
[quote=the word]
Nothing in it for you.
I'll just assume your a liar until you offer some proof.[/quote]I have no problem with you assuming that I'm a liar.
[quote=the word]We’ll just have to agree to disagree. If you think selling a guarantee, when you can’t gurantee that the company issuing the guarantee will exist in six months is prudent, business as usual. I’ll wait it out.
[/quote] So should I not sell term insurance either? No LTCi or DI? What about whole life?[quote=Hank Moody] [quote=the word]We’ll just have to agree to disagree. If you think selling a guarantee, when you can’t gurantee that the company issuing the guarantee will exist in six months is prudent, business as usual. I’ll wait it out.
I'm still waiting to find out about this 10% wd for life, as the worst case scenario, Hank.[/quote]Can you guarantee that the companies in your mutual funds will exist in 6 months? Being the smartest guy in the special olympics doesn't seem to help you much in the business world.
You hold your breath and when I'm ready to tell you, I'll ask around for blue boy. By the way...there's nothing obscure about this guarantee. Many companies offer it. People who understand annuities can EASILY figure out what I'm talking about. I'm not willing to agree to disagree when I'm right and you're wrong. Nice try, though.
[/quote] I agree to disagree with Snags. I just have a feeling that your "10% wd for life as a worst case scenario" is a lie. If not prove it and then we can see who is wrong. Put up or shut up.
[quote=the word][quote=Hank Moody] [quote=the word]We’ll just have to agree to disagree. If you think selling a guarantee, when you can’t gurantee that the company issuing the guarantee will exist in six months is prudent, business as usual. I’ll wait it out.
I'm still waiting to find out about this 10% wd for life, as the worst case scenario, Hank.[/quote]Can you guarantee that the companies in your mutual funds will exist in 6 months? Being the smartest guy in the special olympics doesn't seem to help you much in the business world.
You hold your breath and when I'm ready to tell you, I'll ask around for blue boy. By the way...there's nothing obscure about this guarantee. Many companies offer it. People who understand annuities can EASILY figure out what I'm talking about. I'm not willing to agree to disagree when I'm right and you're wrong. Nice try, though.
[/quote] I agree to disagree with Snags. I just have a feeling that your "10% wd for life as a worst case scenario" is a lie. If not prove it and then we can see who is wrong. Put up or shut up. [/quote]
I can already tell you who is wrong. Many, many, many companies are offering something similar. It's your contempt, prior to investigation, that will keep you in everlasting ignorance.
the mutual fd argument is bogus. The VA SUBACCTS will always be fine, it’s the GUARANTEES that will suddenly get much more expensive!!
Your clients know the expenses, but do they know the MAX that can be applied when the hedging stops working?[quote=newnew]the mutual fd argument is bogus. The VA SUBACCTS will always be fine, it’s the GUARANTEES that will suddenly get much more expensive!!
Your clients know the expenses, but do they know the MAX that can be applied when the hedging stops working?[/quote]"The VA subaccounts will ALWAYS be fine." Wow! Did your husband tell you that or did you just make it up? Let me see if I have this right...A client puts $100,000 into a VA. The market value drops to $50,000. The annuity company gives itself a 50 bp raise and pays the client $10,000 for life (20% of the market value) and the client is supposed to be upset about a 50 bp fee increase?
Did you even THINK before you posted this? Do they let you help real people with their money?
[quote=Hank Moody] [quote=newnew]the mutual fd argument is bogus. The VA SUBACCTS will always be fine, it’s the GUARANTEES that will suddenly get much more expensive!!
Your clients know the expenses, but do they know the MAX that can be applied when the hedging stops working?[/quote]"The VA subaccounts will ALWAYS be fine." Wow! Did your husband tell you that or did you just make it up? Let me see if I have this right...A client puts $100,000 into a VA. The market value drops to $50,000. The annuity company gives itself a 50 bp raise and pays the client $10,000 for life (20% of the market value) and the client is supposed to be upset about a 50 bp fee increase?
Did you even THINK before you posted this? Do they let you help real people with their money?
[/quote] Hey Hanky Panky, the worst case scenario in your above scenario is the annuity company goes out of business and you now have $50,000.00. Thanks for proving my point about guarantees in the current environment..
[quote=the word][quote=Hank Moody] [quote=newnew]the mutual fd argument is bogus. The VA SUBACCTS will always be fine, it’s the GUARANTEES that will suddenly get much more expensive!!
Your clients know the expenses, but do they know the MAX that can be applied when the hedging stops working?[/quote]"The VA subaccounts will ALWAYS be fine." Wow! Did your husband tell you that or did you just make it up? Let me see if I have this right...A client puts $100,000 into a VA. The market value drops to $50,000. The annuity company gives itself a 50 bp raise and pays the client $10,000 for life (20% of the market value) and the client is supposed to be upset about a 50 bp fee increase?
Did you even THINK before you posted this? Do they let you help real people with their money?
[/quote] Hey Hanky Panky, the worst case scenario in your above scenario is the annuity company goes out of business and you now have $50,000.00. Thanks for proving my point about guarantees in the current environment..[/quote]
Well, Wordy Turdy, I suppose he'll have $50,000 for me to put into an index annuity, where he'll get all of the upside of the market and none of the down side. Speaking of the current environment, which annuity companies aren't making good on their guarantees?