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lucas90

Surrender Charges...no Way Out?

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In looking back at previous posts, I found one person's answer to escapng the surrender charges found at the end of the "contract". According to Roberta in a July 1st 2003 post, the "trailing commission charge" actually affects the contributions that were made for the last 7 years...even if you stop contributing for seven years...the "trailing commision charges" will kick-in as of the last time you contributed. I've stopped contributing to my Kemper/Zurich 403b with the idea that in seven years, I would have no surrender charges. I've started contributing my new 403b money with a no load mutual fund. According to Roberta, after 7 years, I will still pay surrender charges on the last 7 years of contributions anyway. In talking with a Kemper/Zurich rep, he agreed with me...that I would owe no surrender charges on money that has been in the contract for seven years. Should I tape record our conversations...????sure I may not owe "surrender charges"...but will I owe "commision charges" or other charges....I feel like this 403b thing with Kemper/Zurich is like a dark cloud that just won't go away.....

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Guest Chuck Yanikoski

An annuity is a contract, and the surrender charges must be spelled out in the contract. Your first step should be to dig out the contract and see what it says -- there should be no ambiguity about it, once you have the paperwork. If you cannot find your original contract, ask your agent for a replacement copy.

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Lucas,

 

Read what you wrote -

 

"In talking with a Kemper/Zurich rep, he agreed with me...that I would owe no surrender charges on money that has been in the contract for seven years."

 

I think this is like what I said in the July 1st conversation you alluded to. No surrender charges on money that HAS BEEN in the contract for 7 years! This is money that you put in 7 years ago. However, as Chuck says it depends on the contract. We've got one that we stopped putting new money in more than 10 years ago but unless we annuitize, we lose large amounts of money b/c of the terms of the contract.

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Quote of the week in the 9 June 2003 issue of Forbes:

 

"Life is frittered away by detail. Simplify." William Baldwin, editor of Forbes says. [This is] my variation on Thoreau's adage: Fortunes are frittered away by complexity.

 

Baldwin says: Here's a list of of products that would be unsuited to someone living on Walden Pond:

 

"...Glue trap investments--any financial product, like a tax-deferred annuity, designed to make your exit painfulo or impossible."

 

Ted

 

 

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