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kal

Equity-indexed Annuity

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I'm new at this money thing. I have an equity-indexed annuity with LSW. The salesman was a fast-talker and I thought I understood the plan at the time. Now I'm worried. I tried to get out of it, but the rep talked me back into it.

 

Does anyone know about this company and/or about equity-indexed annuities? I'm unable to find out about the fees, particularly as they compare with similar products.

 

Thanks for any help.

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I'm new at this money thing. I have an equity-indexed annuity with LSW. The salesman was a fast-talker and I thought I understood the plan at the time. Now I'm worried. I tried to get out of it, but the rep talked me back into it.

 

Does anyone know about this company and/or about equity-indexed annuities? I'm unable to find out about the fees, particularly as they compare with similar products.

 

Thanks for any help.

 

I usually refrain from giving investment advice but equity indexed annuities are a yucky product in the eyes of insurance regulators because there are too many hedges and complex fees that reduce the return, in addition to surrender charges. One of the biggest drawbacks is that the annuity owner receives only a portion of the appreciation of the index used to calculate the value of the annuity but you have to read the fine print in the contract to know that.

 

 

 

 

 

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Hi,

Welcome to the forum.

 

There is a saying that annuities are sold not bought. That fast talking salesperson just got a nice bonus for selling you the equity indexed annuity. Here are two links about them:

http://www.sec.gov/investor/pubs/equityidxannuity.htm

http://www.finra.org/Investors/ProtectYour...surance/P010614

You may want to stop sending any more money immediately and take the hit of the surrender fee and count it up as a learning experience. Next time look before you leap into giving someone your money. Best Wishes,

 

Joe

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Get out, LSW is the commission Whores of the 403b world, Equity Index Annuities are products that give all of us who try to do the right thing for our clients a bad name.

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Kal,

 

WOW this has to be a first. Steve and Intruder Agree on something. This product must really Blow

 

403b I love it!! "The Whores of the 403b world" Thats funny

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Thanks for all the help. This is what I needed to hear.

 

(I just signed up and used the Forum Board yesterday for the first time...interesting, informative and quite fun.)

 

Again, thank you. Kal

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I wouldn't commit any new money to this junk product, however I wouldn't necessarily attempt to surrender it right now. You would probably take a big haircut to surrender and where are you going to put the money? It may be better to ride this contract out until surrender charges are over. Do not contribute any more money to it.

 

ScottyD

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Kal,

 

WOW this has to be a first. Steve and Intruder Agree on something.

 

Even Intruder deserves a high five when he or she concurrs with the thinking of the many good investment authors we quote around here. After hundreds of his or her posts of supporting the status quo of the current 403b system, no matter what, he or she finally admitted to using index funds and this time he correctly says that indexed annuities are a "yucky product."

What I find interesting is that people like intruder, most of the pros who post here, think we non professionals don't know how to read books and comprehend from financial professionals who share our philosophy and principles. They think we just react from our amateur emotions. In fact, we are very well read, experienced, and are merely conduits to the great investors such as Bogle, Ferri, Swedroe, Swenson, Bernstein, Fama, Bogleheads, Siegel, and our own Otter. Also, most importantly, we share our portfolios. No pro dares show his or her portfolio. But Intruder did admit he or she uses indexes and he or she made the correct call on Index Annuities. I respect him or her a little bit more.

 

Intruder reminds me of our first financial consultant from Mercer Consultants to our 457b Oversight Advisory committee. She categorically ignored every recommendation we made during her 7-8 month stay. She NEVER even acknowledged a one single good comment from any of the employee members on the committee. I repeat, NOT ONE. In the final choices for funds, there were 3 Vanguard funds, which is great, But never acknowledged that we were asking for low cost funds without revenue sharing fees. She could have said, something like this: "Ok folks, I hear you and you are right to ask for some low cost funds in the mix, I have included the 3 VG funds". But she didn't. It’s the lack of respect. Furthermore, this "consultant" ran off to greener pastures, which is fine, but where did she go? to our 3rd party administrator, AIG!

 

Our current consultant to our committee is great. SST Benefits hold an active managed philosophy. As you know, I absolutely detest active management. However, the difference is that they show a lot of respect to our immense knowledge and are always listening and responding to our suggestions. For example, he told me directly that he had never read such a find piece of writing, after reading my introduction to our investment policy statement and he said that we are right to remove Dreyfus S&P 500 index that charges revenue sharing costs for a lower cost fund.

Have a good day,

Steve

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