Monday, June 20, 2005
Understanding Equity Index Annuities
Lately, I have been trying to research how people explain the equity index annuity. I have to tell you that most every description I read of it is wrong. People seem to misunderstand this vehicle completely and I don't know why. It is not that confusing, but unfortunately, the equity index annuity gets described wrong constatnly.
I recently wrote information on the equity index annuity. It is probably the most comprehensive and simple explanation of how ti really works. I have only had it as an upgrade to 'The Shocking Truths' book but I feel like I would like to have it as a stand alone.
I am asking for your feedback. IF you think you would appreciate to have this package available as a stand alone product, let us know by sending us a message at support@AnnuityMD.com. If the feedback is good, we will release this package as a stand alone. Again, it explains the EIA in a way nobody really has, and it comes with an audio cd highlighting the important points of the book and of The Shocking Truths book. I will soon let you know how the response is. Until next time...
Ignorance IS Not Bliss.
Tony Bahu
I recently wrote information on the equity index annuity. It is probably the most comprehensive and simple explanation of how ti really works. I have only had it as an upgrade to 'The Shocking Truths' book but I feel like I would like to have it as a stand alone.
I am asking for your feedback. IF you think you would appreciate to have this package available as a stand alone product, let us know by sending us a message at support@AnnuityMD.com. If the feedback is good, we will release this package as a stand alone. Again, it explains the EIA in a way nobody really has, and it comes with an audio cd highlighting the important points of the book and of The Shocking Truths book. I will soon let you know how the response is. Until next time...
Ignorance IS Not Bliss.
Tony Bahu
Thursday, June 16, 2005
Forget Annuities...Let's Talk Babies!!!
Well, I am pleased to inform you that my wife and I had a healthy baby boy this morning!!! He weighed in at 8 pounds and 8 ounces. Hopefully this explains the lack of blogging over the past several days. I would like to also take this opportunity to thank you all for the wonderful e-mails you have sent us and the support you have given us! I know this is a newsletter about annuities, but our families are why we work hard and invest our money, right? Hopefully you always keep that in mind and keep your family first in life.
As for annuities, yes many new developments and we definitely need to catch up. I would like to clairfy some things that we talked about earlier regarding New Jersey and Allianz annuities. We will hopefully do that soon. And remember, for the whole truth about annuities, please visit us at http://www.AnnuityMD.com. Until then, thank you again for all of your support. Wishing you the best, and remember...
Ignorance AIN'T Bliss!!!
As for annuities, yes many new developments and we definitely need to catch up. I would like to clairfy some things that we talked about earlier regarding New Jersey and Allianz annuities. We will hopefully do that soon. And remember, for the whole truth about annuities, please visit us at http://www.AnnuityMD.com. Until then, thank you again for all of your support. Wishing you the best, and remember...
Ignorance AIN'T Bliss!!!
Thursday, June 09, 2005
No Defined End of Term
Okay, so here is the situation. The attorney general in the state of New Jersey is cracking down. They are banning annuities that have what is called a two-tier annuity products and furthermore, they are looking to do the same with annuities that have surrender charges in excess of 10%.
Now, as far as two-tiered annuities, they have no defined end of term. This means that no matter how long you keep the money in, it has to stay in until you 1) stay in for a defined period and 2) take your money out over a defined period. It calls for two sets of action in order to free yourself of a surrender charge. It is somtimes not a great deal for the client.
One company who was hit by this legislation was Allianz. In fact, some of their products operate this way. As a result, some of their portfolio is allegedly being pulled from the state of New Jersey. This is very interesting news in the annuity industry seeing that Allianz is the biggest seller of equity indexed annuities in the country. If this trend carries over to other states, Allianz may certainly take a significant hit in sales.
One thing I would like to clarify is this. My biggest problem with two-tiered annuities is that many brokers have no clue how to explain these to their clients. Furthermore, what's worse is for the most part, they DON'T explain it to the client. Therefore, the client may hold the annuity for a long time and come to find out they must take their money out over an additional period (usually 5 years). THE WORST PART IS, no matter how long they hold it for, they will never be able to take out their money without going through the second tier (by withdrawing the money over a certain number of years) without being assessed a penalty. AGAIN, my biggest problem isn't the way they work---it's that clients don't know that's what they are getting in to.
Well, it looks like the regulators are finally starting to target the insurance industry. Again, not every two-tiered is bad but knowledge is power. Keep this in mind as you do your homework on annuities.
For more information on what you need to know about annuities, please visit:
Annuities: The Shocking Truths Revealed (please click on the link)
Ignorance Is NOT Bliss
Now, as far as two-tiered annuities, they have no defined end of term. This means that no matter how long you keep the money in, it has to stay in until you 1) stay in for a defined period and 2) take your money out over a defined period. It calls for two sets of action in order to free yourself of a surrender charge. It is somtimes not a great deal for the client.
One company who was hit by this legislation was Allianz. In fact, some of their products operate this way. As a result, some of their portfolio is allegedly being pulled from the state of New Jersey. This is very interesting news in the annuity industry seeing that Allianz is the biggest seller of equity indexed annuities in the country. If this trend carries over to other states, Allianz may certainly take a significant hit in sales.
One thing I would like to clarify is this. My biggest problem with two-tiered annuities is that many brokers have no clue how to explain these to their clients. Furthermore, what's worse is for the most part, they DON'T explain it to the client. Therefore, the client may hold the annuity for a long time and come to find out they must take their money out over an additional period (usually 5 years). THE WORST PART IS, no matter how long they hold it for, they will never be able to take out their money without going through the second tier (by withdrawing the money over a certain number of years) without being assessed a penalty. AGAIN, my biggest problem isn't the way they work---it's that clients don't know that's what they are getting in to.
Well, it looks like the regulators are finally starting to target the insurance industry. Again, not every two-tiered is bad but knowledge is power. Keep this in mind as you do your homework on annuities.
For more information on what you need to know about annuities, please visit:
Annuities: The Shocking Truths Revealed (please click on the link)
Ignorance Is NOT Bliss
Tuesday, June 07, 2005
The Annuity Industry Had Better Rethink This
I do believe that one of the problems in the annuity industry is that in order to sell fixed and index annuities, all one needs is an insurance license. That means, your annuity agent may not have ANY formal education in the financial arena...THAT'S SCARY.
For you to entrust someone with that kind of money, and for him to have no financial education is a sin. Now, don't get me wrong, some of the agents are VERY well educated. But if you think of the new agent entering the market, they may have little or no experience with investing matters.
This to me is something the insurance industry should rethink. You see, fixed and index annuities (index annunities are glorified fixed annuities for lack of a better explanation at the present) do not have the stipulations that securities have on them. This leaves a lot of room more abuse and I truly think that should be changed.
The insurance industry should, without a doubt, require formal FINANCIAL training for someone who wants to sell annuities. I will say this forever and continue to push for it. Just trying to say that I believe it is necessary...that's all.
Out!!!
Ignorance IS NOT BLISS!!!
Tony Bahu
For more information on IRA's, please visit:
www.irasearch.info/ira-s.htm
For you to entrust someone with that kind of money, and for him to have no financial education is a sin. Now, don't get me wrong, some of the agents are VERY well educated. But if you think of the new agent entering the market, they may have little or no experience with investing matters.
This to me is something the insurance industry should rethink. You see, fixed and index annuities (index annunities are glorified fixed annuities for lack of a better explanation at the present) do not have the stipulations that securities have on them. This leaves a lot of room more abuse and I truly think that should be changed.
The insurance industry should, without a doubt, require formal FINANCIAL training for someone who wants to sell annuities. I will say this forever and continue to push for it. Just trying to say that I believe it is necessary...that's all.
Out!!!
Ignorance IS NOT BLISS!!!
Tony Bahu
For more information on IRA's, please visit:
www.irasearch.info/ira-s.htm
Saturday, June 04, 2005
Annuities in IRA's
Yes, this is the second time I am going to write about this topic. It warrants attention because I have seen it in the newspapers over the past several days. If you've read my opinion on this topic, please forgive me.
Butl, I have to tell you that it amazes me much stupidity surrounds the financial industry. Let me explain. I read article after article about people saying that annuities don't belong in IRA's because they are tax deferred vehicles in a tax deferred account. This is a statement that needs clarification.
Anyone who knows annuities knows that there are several benefits to owning an annuity (and some downsides too) and only one of them is the tax deferral aspect. There are safety benefits, beneficiary designation benefits, and benefits other than tax deferral. So it begs the question, 'is an annuity really a bad idea for an IRA?'
My answer is it depends. If someone is only looking for tax deferral and that is the reason he is buying the annuity, then it is obvious that it doesn't belong in an IRA. However, if someone is concerned with the other benefits of the annuity, then maybe it can go in the IRA and be a good idea.
My point is, it is not fair to make a blanket statements such as annuities don't belong in IRA's because it doesn't take into account the full picture. And if anyone knows me by know, you'll know that I am an advocate of designing the investment for the exact situation you're in. I don't believe in the investment theory that one size fits all...or the asset allocation models for that matter...who in the heck ever though of a 10 question interview that could determine where your assets should go...give me a break.
In order to determine what's right for you there are many aspects you and your financial advisor need to look at. I won't go over them because I have mentioned it before. But the bottom line is, if your situation calls for it, you can put an annuity in your IRA. It's as simple as that. Anyway, like I always say:
Ignorance is NOT Bliss.
For more information and strategies on IRA's, please visit:
IRA Search
Butl, I have to tell you that it amazes me much stupidity surrounds the financial industry. Let me explain. I read article after article about people saying that annuities don't belong in IRA's because they are tax deferred vehicles in a tax deferred account. This is a statement that needs clarification.
Anyone who knows annuities knows that there are several benefits to owning an annuity (and some downsides too) and only one of them is the tax deferral aspect. There are safety benefits, beneficiary designation benefits, and benefits other than tax deferral. So it begs the question, 'is an annuity really a bad idea for an IRA?'
My answer is it depends. If someone is only looking for tax deferral and that is the reason he is buying the annuity, then it is obvious that it doesn't belong in an IRA. However, if someone is concerned with the other benefits of the annuity, then maybe it can go in the IRA and be a good idea.
My point is, it is not fair to make a blanket statements such as annuities don't belong in IRA's because it doesn't take into account the full picture. And if anyone knows me by know, you'll know that I am an advocate of designing the investment for the exact situation you're in. I don't believe in the investment theory that one size fits all...or the asset allocation models for that matter...who in the heck ever though of a 10 question interview that could determine where your assets should go...give me a break.
In order to determine what's right for you there are many aspects you and your financial advisor need to look at. I won't go over them because I have mentioned it before. But the bottom line is, if your situation calls for it, you can put an annuity in your IRA. It's as simple as that. Anyway, like I always say:
Ignorance is NOT Bliss.
For more information and strategies on IRA's, please visit:
IRA Search
Wednesday, June 01, 2005
The Other Problem with the Equity Indexed Annuity
Okay, so here is the other problem with the index annuity. Many agents try to sell it as the 'answer to all problems.' The fact of the matter is, it is not that at all. An indexed annuity is designed to have the potential to capture a little more upside than a traditional fixed annuity can.
Again, many agents claim it is a way to beat the markets...they will severely underperform in a good bull market. Furthermore, they are not designed to capture all the upside. They are designed to give a lower floor and a higher ceiling than traditional fixed annuities. They are by no means a stock market alternative.
So the bottom line is that the equity indexed annuity can be something desinged particularly to fit in someone's portfolio. It has advantages that other annuities cannot offer. It gives the protection of a fixed annuity. And it gives a little more upside than traditional safety vehicles.
All in all, it can be a good thing but it depends on an investor's situation. For someone looking for all the upside and who doesn't care about taking risk and losing money, the index annuity is far from the right choice. For someone who has a small risk tolerance but cares to have a little more upside potential, it can be a good choice.
The most important thing is to understand, any investment is part of a bigger equation. That is the bottom line. And furthermore, research is key. It is important to know what you are getting into. The further side of the spectrum is agents saying that EIA's are a scam. Those guys just don't understand how the EIA works.
Ignorance is Not Bliss.
Tony Bahu
CEO
AnnuityMD.com
Again, many agents claim it is a way to beat the markets...they will severely underperform in a good bull market. Furthermore, they are not designed to capture all the upside. They are designed to give a lower floor and a higher ceiling than traditional fixed annuities. They are by no means a stock market alternative.
So the bottom line is that the equity indexed annuity can be something desinged particularly to fit in someone's portfolio. It has advantages that other annuities cannot offer. It gives the protection of a fixed annuity. And it gives a little more upside than traditional safety vehicles.
All in all, it can be a good thing but it depends on an investor's situation. For someone looking for all the upside and who doesn't care about taking risk and losing money, the index annuity is far from the right choice. For someone who has a small risk tolerance but cares to have a little more upside potential, it can be a good choice.
The most important thing is to understand, any investment is part of a bigger equation. That is the bottom line. And furthermore, research is key. It is important to know what you are getting into. The further side of the spectrum is agents saying that EIA's are a scam. Those guys just don't understand how the EIA works.
Ignorance is Not Bliss.
Tony Bahu
CEO
AnnuityMD.com
