Date: Sun, 4 Jan 2004 13:47:36 CST
From: "Paul E"
Newsgroups: misc.invest.financial-plan
Subject: Re: Variable Annuities - Living Benefits
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Brent,
Thanks so much for the 'confidence builder' even though that wasnt your
purpose. Unfortunately, I went through the late '90s, early 00's without
the safety net of this product. But, that doesnt mean I didnt learn my
lesson, as I lost into the 6 figure range with the market crash. Since then,
I always looked for guarantees and protection. This Hartford product suits
my needs perfectly because of a combination of a layoff a year ago, and my
annual budgetary shortfall resulting from expenses which will exceed income
by only a little less than what the 7% annual 'benefit payment' will
provide.
It surprises me how few financial 'experts' are really aware of these newish
'living benefit riders'. You mention Variable Annuity to them, and they
start quoting from knowledge and assumptions they havent updated in about 10
years it seems! I bet that, if a lot of people in similar shoes to mine,
which with today's job picture would be more than just a few, were aware of
products like these annuity products with 7% benefit payments providing
income today, combined with principle guarantee features, theyd find them
to be more than just a little bit appealing. Then when they see that they
can have their principle invested in very similar instruments, with almost
any risk profile they want, as they would be had they not heard of these
products, having at least as much return potential, with guaranteed
principle, well, their first response is almost always, 'I never realized I
could have my cake and eat it too.... '!
Paul E
"Brent D. Gardner, ChFC" wrote in message
news:LNWJb.3785$zf.2499@okepread05...
> "Paul E" wrote in message
> news:0QkJb.583846$0v4.23224029@bgtnsc04-news.ops.worldnet.att.net...
> > Bret, are you familar with the Hartford Director or Leaders variable
> > annuities, and in particular, their 'Principle First' riders, which I
> > believe only came into existence last year, and is their form of
principle
> > guarantee? You may want to reference the thread a bit above this one to
> see
> > it discussed a little.
>
> I was one of the first agents to actively work with living benefit riders,
> thanks to another agent from California that participated on AOL's
personal
> finance boards back when they were worth reading. Once I learned the value
> of the guarantees, I started presenting them as options to my clients.
> During 1999, I moved a lot of qualified money into annuities with GMIB
> riders, and every single client that did thinks I'm a hero now. I'm not
that
> smart, I just was sold on the idea of the guarantee, or safety net, by
> another agent that I respect, and my best friend convinced me that the
stock
> market was overvalued. Those two together helped me put some serious
effort
> into using the products where I thought they would do the client some
good.
> So far, its one of the best things I've ever done.
>
> Insurance companies have worked hard at making their products have more
> appeal, and one of the best inventions of the 1990s was the living benefit
> riders of a variable annuity. These riders come in many forms, but the one
> thing that they've totally blown away is the straw man argument that an
IRA
> or Qualified Plan should never be funded with an annuity (this was
patently
> silly from day one, since the first pensions were ALL annuities, and even
> IRS Publication 590 specifically mentions the Individual Retirement
Annuity
> as one of the TWO choices for ALL Individual Retirement Arrangements, or
> IRAs). Since the bear came out of the woods, and most investors had their
> pants down, looking like they just sat in a bucket of honey, the
guarantees
> of the annuity contract have come full circle and the pundits have all
shut
> up. AM Best was correct when they said that the M&E of an annuity was one
of
> the best buys of the century, but it takes a charging bear to teach this
> lesson. Unfortunately, some didn't learn, and they have the permanent
scars
> to prove it.
>
> One of the reasons I didn't sell much of Hartford was they were so slow at
> entering the living benefit business (Pacific Life, IL Annuity, Kemper,
> American Skandia, and Manulife were in this business much earlier). Having
> done my due diligence on the rider, I think the Principal First rider is a
> good one for the right investor where the benefit is suitable. I just need
> to persuade Hartford to start offering one in the RIA market now. Again,
> several other companies have beat them in this area, which is why I'm not
> using this product at the moment. I do think it's a great product, though.
>
> Brent D. Gardner, ChFC
> Chartered Financial Consultant
> http://members.cox.net/brentdgardner1378/
>
> "Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
> to heaven if you die dumb. Become better informed. Learn from other's
> mistakes. You could not live long enough to make them all yourself." -
Hyman
> George Rickover (1900-86), Admiral, US Navy, advocated development of
> nuclear subs & ships
>
> The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
> (ChFC), designations owned and exclusively offered by The American
College,
> signify the highest standards of academic study and professional
excellence
> in the financial services industry.
>
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