[capitalcityguy]

Originally Posted by Cydole

I'm an insurance agent so I do have some knowledge on what you're talking about. I'm not SEC licensed though.

If you're talking about EI annuities, I would stay away. In most cases, they are not sold properly (truthfully). Here is one article:
SEC to regulate equity-indexed annuities | DesMoinesRegister.com | The Des Moines Register

Simply put:
Aggressive= Variable annuities and Variable UL
Conservative= fixed annuites and whole life

Of course, I'm not sure what exactly you want to do with your money. I would talk to a couple insurance agents and financial advisors. See what suits you the most.

First off, I don't think anyone is licensed through the SEC. If a person is selling securities products, then they must be registered/licensed with FINRA (formerly NASD).

Secondly. Equity Indexed Annuities ARE a type of FIXED annuity. They're guaranteed a certain return. Some of the returns are tied to an equity index (like the S & P 500) but there isn't actually an investment into the market by the client (like there is for a variable annuity).

The bottom-line. These are safe investments so the main concern would be expenses (and surrender) and if they are reasonable.
The SEC has really over reached their authority on this one and because of that, are now being sued by several insurance companies (include a couple large one's in Des Moines) over this ruling.

Since everyone seems to be into disclosure here, my turn. I'm not an insurance salesman but rather I work in the compliance department of an insurance company. My company does NOT sell Equity Indexed annuities, so I don't have any horse in this race here.

[Wesley]

Originally Posted by SC Cy

You couldn't be any farther from correct here. Myself and my family each has a policy and it is doing absolutely fantastic. I've had mine since '03. It's funny how people are getting destroyed in the markets, 401k, etc., and the things that are doing well are black-balled. Keep preaching the dream brother!

is this one of the Bernie Madeoff enterprises?

[capitalcityguy]

Originally Posted by Knownothing

Just go get yourself a whole life policy. They are rather simple. You can have a cash draw option. It's almost impossible for them to ever lapse. You can add term on to it at any point. Not a bad product for the long hall. I am in Insurance so I know this stuff. I don't know the product you are talking about very well.
If you are risky you might want to get a Variable Annuity. If you are not you can go with a fixed. Pretty simple concepts with those two also.

Yes…really simple.

I pay you a premium. You get a healthy commission. I end up with very little life insurance coverage per my premium paid compared to what I could have gotten with a term policy.

IMO there's a small segment of the population (i.e.…mainly high net worth folks) that may benefit from a whole life policy over other alternatives, but certainly not the majority.

So no, I disagree. It is far from being "simple".

[erikbj]

Originally Posted by capitalcityguy

First off, I don't think anyone is licensed through the SEC. If a person is selling securities products, then they must be registered/licensed with FINRA (formerly NASD).

If you have an RIA you may be required to register with the SEC, depending on your assets under management or other factors.

[Cydole]

Originally Posted by capitalcityguy

First off, I don't think anyone is licensed through the SEC. If a person is selling securities products, then they must be registered/licensed with FINRA (formerly NASD).

Secondly. Equity Indexed Annuities ARE a type of FIXED annuity. They're guaranteed a certain return. Some of the returns are tied to an equity index (like the S & P 500) but there isn't actually an investment into the market by the client (like there is for a variable annuity).

The bottom-line. These are safe investments so the main concern would be expenses (and surrender) and if they are reasonable.
The SEC has really over reached their authority on this one and because of that, are now being sued by several insurance companies (include a couple large one's in Des Moines) over this ruling.

Since everyone seems to be into disclosure here, my turn. I'm not an insurance salesman but rather I work in the compliance department of an insurance company. My company does NOT sell Equity Indexed annuities, so I don't have any horse in this race here.

Good points, I meant to say/type securities licensed or licensed to sell securities.

The only problem I have with the EIA's is how they are sold. What the customer is being told and what it does are 2 different things.

I'll stick with the original point. Talk to a couple agents and advisors. See what options are best for you and your situation. Some are out to help you and some are out to make money.

[jmb]

Originally Posted by capitalcityguy

First off, I don't think anyone is licensed through the SEC. If a person is selling securities products, then they must be registered/licensed with FINRA (formerly NASD).

Secondly. Equity Indexed Annuities ARE a type of FIXED annuity. They're guaranteed a certain return. Some of the returns are tied to an equity index (like the S & P 500) but there isn't actually an investment into the market by the client (like there is for a variable annuity).

The bottom-line. These are safe investments so the main concern would be expenses (and surrender) and if they are reasonable.
The SEC has really over reached their authority on this one and because of that, are now being sued by several insurance companies (include a couple large one's in Des Moines) over this ruling.

Since everyone seems to be into disclosure here, my turn. I'm not an insurance salesman but rather I work in the compliance department of an insurance company. My company does NOT sell Equity Indexed annuities, so I don't have any horse in this race here.

the reason for the over-reaching is they have been positioned and marketed as 'investments' & misrepresented-hence more regulation.

[capitalcityguy]

Originally Posted by jmb

the reason for the over-reaching is they have been positioned and marketed as 'investments' & misrepresented-hence more regulation.

Arguably a valid point (i.e.…although I'm not sure you can fairly lump all agents and/or insurance companies in the same boat as your statement suggests ) , but still doesn't justify the SEC's involvement in a product that is outside their jurisdiction. Moreover, the SEC is clearly not doing the job with the products the DO have jurisdiction over. Can you say Madoff?

[erikbj]

Originally Posted by capitalcityguy

Arguably a valid point (i.e.…although I'm not sure you can fairly lump all agents and/or insurance companies in the same boat as your statement suggests ) , but still doesn't justify the SEC's involvement in a product that is outside their jurisdiction. Moreover, the SEC is clearly not doing the job with the products the DO have jurisdiction over. Can you say Madoff?

Madoff ran a non-registered product which is not the SEC's responsiblity to supervise. however in the next year you will see non-registered products (aka Hedge Funds) come under the watch of the SEC. The problem is that 99% of teh people at teh SEC are not smart enough to know waht they are looking for.

[capitalcityguy]

Originally Posted by erikbj

Madoff ran a non-registered product which is not the SEC's responsiblity to supervise. however in the next year you will see non-registered products (aka Hedge Funds) come under the watch of the SEC. The problem is that 99% of teh people at teh SEC are not smart enough to know waht they are looking for.

Not exactly true. SEC has jurisdiction over investment advisory firms. See this article from Reuters:

January 6th, 2009
Why did the SEC fail to spot the Madoff case?

[jmb]

Originally Posted by capitalcityguy

Arguably a valid point (i.e.…although I'm not sure you can fairly lump all agents and/or insurance companies in the same boat as your statement suggests ) , but still doesn't justify the SEC's involvement in a product that is outside their jurisdiction. Moreover, the SEC is clearly not doing the job with the products the DO have jurisdiction over. Can you say Madoff?

true...just as the saying "not all hawkeyes are bad: it is the 99% that give 1% a bad name.". When dealing with folks that have been raped with these products it is disappointing to see how absent the insurance commissioners have been.

[SC Cy]

Originally Posted by jmb

true...just as the saying "not all hawkeyes are bad: it is the 99% that give 1% a bad name.". When dealing with folks that have been raped with these products it is disappointing to see how absent the insurance commissioners have been.

Quick question...how exactly, and be specific, have folks been raped by this product? Remember...be specific. I am curious because my family is happy as larks and so are the people I know that have these products as well. Ok, it's only one other family that I know of...not exactly something people talk about. I'm curious at what ways financial advisers have made their clients money the past few years. Our policies (my family) are all on the positive side while my 401k and other investments are being destroyed.

[jmb]

Originally Posted by SC Cy

Quick question...how exactly, and be specific, have folks been raped by this product? Remember...be specific. I am curious because my family is happy as larks and so are the people I know that have these products as well. Ok, it's only one other family that I know of...not exactly something people talk about. I'm curious at what ways financial advisers have made their clients money the past few years. Our policies (my family) are all on the positive side while my 401k and other investments are being destroyed.

1. misrepresentation
2. illuquidity due to unreasonable surrender periods
3. surrenders upon death
4. sold as something they are not
5. undue pressure by EIA sales people that make upwards of 15% commision on the products.
6. sold to seniors that will never be able to access their money
7. very complex and and while sounding like good 'investments' they are complex tools that are hard to totally undestand.

The above are based upon my professional experience, use the google machine and you can find more.

Ask any academic, fee based advisor, or fiduciary...or anyone that doesn't make commission selling them and it is pretty rare to find someone that finds them to be a good vehicle for the long haul.

jmb

[capitalcityguy]

Originally Posted by jmb

1. misrepresentation
2. illuquidity due to unreasonable surrender periods
3. surrenders upon death
4. sold as something they are not
5. undue pressure by EIA sales people that make upwards of 15% commision on the products.
6. sold to seniors that will never be able to access their money
7. very complex and and while sounding like good 'investments' they are complex tools that are hard to totally undestand.

The above are based upon my professional experience, use the google machine and you can find more.

Ask any academic, fee based advisor, or fiduciary...or anyone that doesn't make commission selling them and it is pretty rare to find someone that finds them to be a good vehicle for the long haul.

jmb

Dude asked for specifics. You just provided a bunch of rhetoric. If you in fact have examples of consumers that were negatively affected by these, you should be able to provide specific numbers. At this point, you're just spouting off a bunch of stuff that can neither be verified or questioned. Maybe that is your goal?

Give us something to consider and wrap our arms around. This list is truly unhelpful to either side of the argument.

[Ficklone02]

Although there has been a spirited discussion in regards to the effects of using this financial product.....I still have no idea what it is. Can anyone expound upon answering the original question?

[capitalcityguy]

wikipedia does a decent job answering your question: Equity-indexed annuity - Wikipedia, the free encyclopedia