Invest a rollover!
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[quote=BBQ]
VA would be about the last place I'd consider putting an IRA Rollover.
[/quote] Let me explain why I said this a ways back, as I haven't been watching this thread: If I'm really trying to do what's best for my client, why would I put qualified money into another tax-deferred product? I wouldn't because of the loads! VAs main attraction is that they are tax deferred. They're tax deferred because they are "life insurance products." Life companies go to A LOT of expense and lobbying effort to keep these suckers (VAs) as life insurance, though we all know there is barely any life insurance in these contracts. It's really kinda of a sham life product that is allowed because of life insurers' powerful lobbists. Common sense would tell you that packaged products have to cost more. - The living benefits are just 'sizzle-features' that life companies put in there to sell people VAs...but they are costly options that few will ever collect on. For most people VAs are products that they shouldn't own because the costs are too high...and if the commissions were lower or tiered like mutual funds with breakpoints, you'd see VA production drop like the stock market! It's funny how higher commissions make salespeople find justifications to use these products, instead of lower cost and lower commission products, imho. Gee, maybe there's a correlation! I'd venture that the high costs wipe out any benefit of tax deferral for most people...versus just investing in similar mutual funds or ETFs...or individual bonds for income. But life companies know that people buy sizzle...not the steak!Actually, No I didn’t. You can tell because I did not put “quotes” around it!
I've been licensed for life insurance since before you were a sparkle in your daddy's eye. This is just common knowledge for anyone experienced in the life biz or anyone who looks beyond what their bd tells 'em.Let me pose a question to you, BBQ: Do you sell term life insurance? If so, you sell a product that is never used 99% of the time! Think about all the lost premiums! Of course there is a chance you’ll never use the living benefits of a VA, but had you needed them, you would be glad you had them.
[quote=BBQ][quote=BBQ]
VA would be about the last place I'd consider putting an IRA Rollover.
[/quote] Let me explain why I said this a ways back, as I haven't been watching this thread: If I'm really trying to do what's best for my client, why would I put qualified money into another tax-deferred product? I wouldn't because of the loads! VAs main attraction is that they are tax deferred. They're tax deferred because they are "life insurance products." Life companies go to A LOT of expense and lobbying effort to keep these suckers (VAs) as life insurance, though we all know there is barely any life insurance in these contracts. It's really kinda of a sham life product that is allowed because of life insurers' powerful lobbists. Common sense would tell you that packaged products have to cost more. - The living benefits are just 'sizzle-features' that life companies put in there to sell people VAs...but they are costly options that few will ever collect on. For most people VAs are products that they shouldn't own because the costs are too high...and if the commissions were lower or tiered like mutual funds with breakpoints, you'd see VA production drop like the stock market! It's funny how higher commissions make salespeople find justifications to use these products, instead of lower cost and lower commission products, imho. Gee, maybe there's a correlation! I'd venture that the high costs wipe out any benefit of tax deferral for most people...versus just investing in similar mutual funds or ETFs...or individual bonds for income. But life companies know that people buy sizzle...not the steak![/quote]Sounds like you've been losing some assets to VA's. Sucks to be you.
Actually VA Salesman, it sounds like this person isn’t in the business. It sounds like they’re regurgitating Suze/Ramsey bullshit like it’s gospel without having the foggiest about how stuff really works. But if BBQ is in the business, s/he probably is hemmoraging $ to VAs.
[quote=iceco1d][quote=BBQ]Actually, No I didn’t. You can tell because I did not put “quotes” around it!
I've been licensed for life insurance since before you were a sparkle in your daddy's eye. This is just common knowledge for anyone experienced in the life biz or anyone who looks beyond what their bd tells 'em. [/quote] Oh come on VA/deekay...you need to read his posts more thoroughly! There you have it...he's quite experienced, and ALWAYS tells the truth; just like he did about [not] stealing the sizzle quote. [/quote]It always cracks me up when some loser talks about how inappropriate it is to put retirement money into a product that is designed specifically for retirement.
VAs main attraction is that they are tax deferred.
I have read this and variants of this countless times. I've never read it from someone with expertise in the subject. It's usually written by journalists with a questionable amount of financial knowledge. Sometimes things get repeated so many times that this simple that act of repetition must make it true, so we have people like BBQ repeating it without bothering to use his ability to think. The majority of VA money is qualified money. Since the holdings in a qualified account (with few exceptions) get taxed in an identical manner regardless of the investment, it should be obvious that the main attraction CAN'T be that they grow tax deferred. Advisors don't sell qualified VA's for tax deferral. Clients don't buy qualified VA's for tax deferral. Everyone has their own reasons for buying and selling them, but tax-deferral is not only not the main attraction, in most cases, the tax deferral means nothing and sometimes is a negative.And once again Ice …thank you Hope the delivery arrived in working order? Time to hit the bricks
[quote=BBQ][quote=BBQ]
VA would be about the last place I'd consider putting an IRA Rollover.
[/quote] Let me explain why I said this a ways back, as I haven't been watching this thread: If I'm really trying to do what's best for my client, why would I put qualified money into another tax-deferred product? I wouldn't because of the loads! VAs main attraction is that they are tax deferred. They're tax deferred because they are "life insurance products." Life companies go to A LOT of expense and lobbying effort to keep these suckers (VAs) as life insurance, though we all know there is barely any life insurance in these contracts. It's really kinda of a sham life product that is allowed because of life insurers' powerful lobbists. Common sense would tell you that packaged products have to cost more. - The living benefits are just 'sizzle-features' that life companies put in there to sell people VAs...but they are costly options that few will ever collect on. For most people VAs are products that they shouldn't own because the costs are too high...and if the commissions were lower or tiered like mutual funds with breakpoints, you'd see VA production drop like the stock market! It's funny how higher commissions make salespeople find justifications to use these products, instead of lower cost and lower commission products, imho. Gee, maybe there's a correlation! I'd venture that the high costs wipe out any benefit of tax deferral for most people...versus just investing in similar mutual funds or ETFs...or individual bonds for income. But life companies know that people buy sizzle...not the steak![/quote] I asked you whether or not you sold term life insurance because of the bold comment. You say you don't sell VAs because they offer benefits few will ever collect on. However, 99% of all term policies do not pay out. Either they lapse or expire without a benefit being paid. The agent, however, makes a lot of money selling term insurance. My payout with most companies for term is in the range of 75-80% FYC. Pretty nice payout, would't you say? The insurance companies LOVE term policies because they know they'll almost never have to pay out. How do you feel about selling a product that probably will never pay out? Most people FTR don't buy VAs for tax-deferral. They buy them for the living and death benefits. If you compared, say, a mutual fund portfolio vs. a VA with similar subaccounts, the fund portfolio will outperform in a vacuum. However, we and our clients don't live in vacuums. They're emotional creatures and do stupid shit (i.e. buy high and sell low). If the living benefits avoid this, then the rider is worth it.Actually the sub accounts will outperform their like retail mutual fund. It’s a fact.
[quote=ezmoney]Actually the sub accounts will outperform their like retail mutual fund. It’s a fact.[/quote]
Care to back that up with some proof?
EZ - that is most defn NOT true - there is TONS of proof to the contrary. Sub accts always underperform; I can only assume you were joking.
[quote=joedabrkr] [quote=BBQ]
deekay, yes I sell term life...even some cash value life. You're missing my point, and the q is if the commission structure were not so attractive for VAs would anyone really be selling 'em, vs mutual funds or etf's? - My point is that they are heavily loaded products that benefit few of the clients, when other, 'cleaner' choices are available. As for the other comments, I'll ignore 'em. They're the ones who discourage people from posting on these boards. - I've been on other boards where people try to help others and discuss and analyze differing points of view, w/o all the elementary school insecurities these few posers exhibit. - speaking of which...ice, I absolutely wuv it when someone has to quote their educational credentials because it doesn't show in their writing...and the cutting and pasting class you took is finally paying off. good job! I'm duly impressed![/quote]Verily, thou dost remindeth me of the hindmost portion of a horse.
[/quote] Or....Nancy
[quote=newnew]EZ - that is most defn NOT true - there is TONS of proof to the contrary. Sub accts always underperform; I can only assume you were joking.[/quote]
How do you know this?
Brand new tool out there from a little known company called Morningstar. They actually allow you to run something called a hypothetical that shows you what your returns would have been if you had bought an investment sometime in the past!! They track stocks, mutual funds, and VA subaccounts among other things. I highly recommend this service, it is great.
I see no reason why the subaccounts would underperform. They often have lower expenses than their mutual fund brethren. For example, XYZ fund may have a 5.75% sales charge, but when purchased inside of a VA, it has no sales charge. However, the fact that the sub-account outperforms doesn't mean that the investment will outperform because there may be all sorts of expenses that are part of the investment, but outside of the subaccount.