President Obama likes annuities

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Feb 7, 2010 3:12 pm

BioFreeze and Obama in bed together.

http://www.nytimes.com/2010/01/30/your-money/annuities/30money.html?em

Feb 7, 2010 4:36 pm

Actually, I just thought it was funny that the Obama administration is talking about annuities, when Bio hates Obama.

I barely looked at the article.

Feb 7, 2010 6:28 pm
AGEMAN:

Give up a lump sum of 100k for $7584 per year??  7.5%--This doesn't make sense.  If the person doesn't care about the principal which of course they don't if they are going to annuitize, they would be better off throwing it a HY bond fund and at least they will have some principal left.

 
Can your high yield bond fund NEVER run out of money?  An annuity is a risk management product.  A bond fund is an investment.  Apples and oranges. 
 
Take a moment to learn about what you are talking about.  You may avoid sounding willfully ignorant.
Feb 7, 2010 7:24 pm
AGEMAN:
deekay:
AGEMAN:

Give up a lump sum of 100k for $7584 per year??  7.5%--This doesn't make sense.  If the person doesn't care about the principal which of course they don't if they are going to annuitize, they would be better off throwing it a HY bond fund and at least they will have some principal left.

 
Can your high yield bond fund NEVER run out of money?  An annuity is a risk management product.  A bond fund is an investment.  Apples and oranges. 
 
Take a moment to learn about what you are talking about.  You may avoid sounding willfully ignorant.
U ever know of any open end HY bond fund that went to zero??  If you just take the dividend for income there will always be something there whereas if you annuitize, there is nothing left except the income.  I know it is apples and oranges and  the annuity does provide guaranteed income.  I was just saying it seems like a great deal for one side---the insurance company.  I just don't see the value of an immediate annuity.  The client would be better off in a VA with a living benefit or almost anything else.  I have presented numbers for immediate annuites by client or prospect request many times and have never had any takers after they look at the numbers they always say the same thing.  It just doesn't make sense.  That is all I was saying.  You seem to be full of insults.
 
It doesn't matter if the fund itself goes to zero or not.  If someone takes money out of any investment (including a VA with a GMIB/WB rider), and wants at least the same amount of income every year, you run the risk of having the account go to zero.  The client can decide to retain that risk and invest in a bond fund, or they can choose to delegate the risk to an insurance company via a SPIA.  It's that simple. 
Feb 7, 2010 7:38 pm
If the client wants the maximum amount of income, without the possibility of outliving it, the best solution (and ONLY) solution, is a SPIA.  Everything else is a prediction and could backfire on you.
Feb 8, 2010 11:24 am

Technically speaking, Lincoln's i4Life benefit is annuitization and you get paid a trail.  Ranges, according to our system, from .25% up to 1% in some situations. 

Feb 8, 2010 12:27 pm
iceco1d:

Agree with deekay 100%.  ROFLCOPTER @ "VA with living benefits are a better option [for income than a SPIA]" 

On a side note, anyone know of a SPIA that pays a trail?  Or any annuity that you can annuitize, and still receive a trail?

 
MassMutual has a trail option.
Feb 8, 2010 12:43 pm

Why does every annuity thread end with a trail discussion?

Feb 8, 2010 9:36 pm
iceco1d:

Because I'm usually the one asking it (thanks Mike & Spiff).


You sell a SPIA, and get what?  2 or 3 points gross.  Then 15 years from now, you're still servicing that client?  No thanks. 

 
There's no reason for service.  There isn't any to give if this is all the business that they are doing with you. 
Feb 8, 2010 10:50 pm

Ice, there's really nothing to service as the income is set per the terms of the contract. 

Feb 22, 2010 1:38 am

Sometimes my older clients get senile and call me when their check is a day late. They're nice people and I'm absolutely fine with it, but it can disrupt prospecting hours.