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Dan Otter

How Valuable Is The M&e?

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Guest Sierra
"You are misinterpreting his statement. Not having the ME "applied against the contract" means that the ME fee is factored/incorporated into the mathematical computation when the insurer is deciding what the fixed interest rate will be. This is different than the ME fee's application to the VA where it is "applied against the contract." "

 

Sierra,

I will agree with you on this. It is a cost in the product. They just don't specifically call it M&E.

TR: Would you like to reconsider your answer to the T/F test?

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Guest TR1982

Sierra,

Please lay this down. If we all lie to you and tell you you're right, would that make you feel better? It's just not that interesting anymore. Please let us move on.

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FT:

 

You can look for the ME fee in a prospectus for a fixed annuity until the cows come home. You will never find one because fixed annuities are sold by individual or group annuity contracts not by prospectus.

 

I could have SWORN there was no such thing as a prospectus for a fixed annuity...

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FT: Please open up to page 3 in your Guaranteed Accumulation Account Prospectus that you have in your possession as a customer of ING. This Prospectus is dated April 29, 2005. The last paragraph says: "Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate."

 

 

...except now here we are quoting from one. I'll be darned.

 

Since we can't even agree on the existence of a prospectus (from which you are now quoting, ironically and comically enough), let me agree with TR, Dan, and everyone else out there and let this go.

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Guest Joel Lee Frank

FT: I was wrong to assert that there is no Prospectus with fixed annuities. I admitted my error by quoting from INGs Garanteed Accumulation Account Prospectus dated April 29, 2005 where it says on page 3: "Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate."

 

FT, Did you not say: "I don't own a fixed annuity, hence I have no prospectus. Could someone who owns one or who sells them consult a prospectus and let us know what you find?

 

FT: The ING Guaranteed Accumulation Account Prospectus is issued with your ING Variable Annuity Prospectus. I guess you forgot you had it.

 

I guess you also forgot to look at your ING Variable Annuity Prospectus, specifically on page 41 where it says: "ING Fixed Account: INGs determination of credited interest rates reflects a number of factors, including mortality and expense risk..." I guess you also forgot that you had this Prospectus as well.

 

I have shown you that your own ING Prospectusses has the answer to your own question: "Could someone who owns one or who sells them consult a prospectus and let us know what you find?"

 

French Teacher: I let you know what I have found and your reply is: "Since we can't even agree on the existence of a prospectus..."

 

Peace and Hope,

Joel

 

 

 

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Guest Joel Lee Frank
Sierra,

Please lay this down. If we all lie to you and tell you you're right, would that make you feel better? It's just not that interesting anymore. Please let us move on.

TR: Just don't lie to the prospects out there by telling them that the ME fee doesn't apply to fixed annuities.

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Guest Joes

There is no fee in a fixed annuity the rate is declared by the insurance company in the same way a bank declares it interest on cds.

 

The kicker is that often the companies that are bashed because of there high m&E fees pay much better interest on there fixed accounts. Usually 1/2 percent better than TIAA/CREF and others. The reason, profitability- the companies can reinvest thier assets in thier own operations usually producing a 10-15% rate of return(by hiring agenst etc..), to pass along 6% guaranteed to clients still yields the insurance companies a handsome profit.

 

Also fixed annuities have a guaranteed interest rate often at or near 3.5% so unlike bond funds there is no risk that they will lose money and you will always make at least the guaranteed min.

 

All teachers approaching retirement should meet with an agent to discuss the fixed annuities available to them.

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Guest TR1982

Sierra,

There you go again with the personal attacks. Why do feel so compelled to be the moral watch dog here? Trust me, I know I have a clear concscience about what I do.

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FT: I was wrong to assert that there is no Prospectus with fixed annuities. I admitted my error by quoting from INGs Garanteed Accumulation Account Prospectus dated April 29, 2005 where it says on page 3: "Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate."

 

 

Keep reading, Joel. Page 14 of the same prospectus, under "Contract Charges": "We do not deduct mortality and expense risk charges and other asset-based charges that may apply to variable funding options from GAA. These charges are only applicable to the variable funding options."

 

Read that again, slowly: "These charges are ONLY APPLICABLE to the VARIABLE funding options."

 

Thanks for pointing out to me that I had a copy of this. You're quite right that I was entirely unaware that I had it, since as I said earlier, I do not own a fixed annuity.

 

But now that we DO know that fixed annuities have a prospectus, and now that we read in that very prospectus, in the clearest possible English, that "These charges are only applicable to the variable funding options," can we for the love of God put this subject to rest once and for all?

 

Thank you.

 

 

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Guest Sierra

Keep reading, Joel. Page 14 of the same prospectus, under "Contract Charges": "We do not deduct mortality and expense risk charges and other asset-based charges that may apply to variable funding options from GAA. These charges are only applicable to the variable funding options."

================================================

FT: I read this quote 3 days ago. You could not be more wrong in your interpretation of it.

 

The above quote means that it (the ME fee) does not come out ("we do not deduct") of the Guaranteed Accumulation Account as it does with the variable funding accounts.

 

"These charges are ONLY APPLICABLE to the VARIABLE funding options."

 

FT, this quote means they are not DEDUCTED DIRECTLY from the Guaranteed Accumulation Account as they are with the Variable sub-accounts.

 

Now go back and read the quote on page 3 where it says: "Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate."

 

Have you read page 41 in your Variable Annuity Prospectus where it says?: "ING FIXED ACCOUNT: INGs determination of credited interest rates reflects a number of factors, including mortality and expense risks,..."

 

The reading of these quotes together should reveal to you what I and Scott have been repeatedly saying, namely;

 

1. The ME fee is a direct deduction from the variable sub investment account. It is an 'explicit' charge and,

 

2. With the Guaranteed Accumulation Account or Fixed Interest Account the ME fee is factored/incorporated into the insurer's calculation of the declared interest rate ("We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate." or "INGs determination of credited interest rates reflects a number of factors, including mortality and expense risks,...")

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Keep reading, Joel. Page 14 of the same prospectus, under "Contract Charges": "We do not deduct mortality and expense risk charges and other asset-based charges that may apply to variable funding options from GAA. These charges are only applicable to the variable funding options."

=================================

FT: I read this quote 3 days ago. You could not be more wrong in your interpretation of it.

 

The above quote means that it (the ME fee) does not come out ("we do not deduct") of the Guaranteed Accumulation Account as it does with the variable funding accounts.

 

"These charges are ONLY APPLICABLE to the VARIABLE funding options."

 

FT, this quote means they are not DEDUCTED DIRECTLY from the Guaranteed Accumulation Account as they are with the Variable sub-accounts.

 

I find it interesting that you claim to have read this quote three days ago, yet chose to omit it from your original citation from the prospectus. The reason couldn't be more obvious: it's the only place where the prospectus clearly and directly addresses the subject of M&E charges, and it clearly refutes what you are saying.

 

The line is simple and clear: "These charges are only applicable to the variable funding options." There is no "interpretation" needed, unless you are trying to spin the meaning. The charges DO NOT APPLY in any way, shape or form to the fixed option. They are ONLY applicable to the VARIABLE funding options. I'd find a simpler way of phrasing it if there were one.

 

Joel, it's clearly your intention to spin any possible meaning back towards your misinterpretation, and that's fine. As I said about twelve days ago, I'm perfectly content to agree to disagree with you. Common sense, which you so frequently cite as your guide in these matters, should tell you that if the prospectus says something in such a clear and concise way, then that's the way it is. But if you choose to see things a different way, so be it.

 

Either way, we have exhausted this subject.

 

 

 

 

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Guest Sierra

<!--QuoteBegin--Sierra+Jun 13 2005, 06:32 PM-->

QUOTE (Sierra @ Jun 13 2005, 06:32 PM)
<!--QuoteEBegin--> Keep reading, Joel. Page 14 of the same prospectus, under "Contract Charges": "We do not deduct mortality and expense risk charges and other asset-based charges that may apply to variable funding options from GAA. These charges are only applicable to the variable funding options."

================================================

FT: I read this quote 3 days ago. You could not be more wrong in your interpretation of it.

 

The above quote means that it (the ME fee) does not come out ("we do not deduct") of the Guaranteed Accumulation Account as it does with the variable funding accounts.

 

"These charges are ONLY APPLICABLE to the VARIABLE funding options."

 

FT, this quote means they are not DEDUCTED DIRECTLY from the Guaranteed Accumulation Account as they are with the Variable sub-accounts.

 

Now go back and read the quote on page 3 where it says: "Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate."

 

Have you read page 41 in your Variable Annuity Prospectus where it says?: "ING FIXED ACCOUNT: INGs determination of credited interest rates reflects a number of factors, including mortality and expense risks,..."

 

The reading of these quotes together should reveal to you what I and Scott have been repeatedly saying, namely;

 

1. The ME fee is a direct deduction from the variable sub investment account. It is an 'explicit' charge and,

 

2. With the Guaranteed Accumulation Account or Fixed Interest Account the ME fee is factored/incorporated into the insurer's calculation of the declared interest rate ("We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate." or "INGs determination of credited interest rates reflects a number of factors, including mortality and expense risks,...") <!--QuoteEnd-->

<!--QuoteEEnd-->

FT: Like your late Senator Daniel Patrick Moynihan use to say: "You have a right to your opinion but you do not have a right to your own set of facts"

 

Your response to this post of mine reveals that you do not want to take all the three quotes in their totality because if you did you will see you are factually wrong/mistaken to reach the conclusion that the ME fee only applies to VA.

 

Page 41 says:"ING FIXED ACCOUNT: INGs determination of credited interest rates reflects a number of factors, including mortality and expense risks,..." You intentially ignore this quote, why?

 

Page 3 says: "Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate." You intentially ignore this quote, why?

===============================================

 

Page 14 says: "We do not deduct mortality and expense risk charges and other asset-based charges that may apply to variable funding options from GAA".

 

FT: This means "we consider these risks (mortality and expense)when determining the credited rate."

 

"These charges are only applicable to the variable funding options."

 

This means that as a direct deduction the ME fee only applies to the variable funding options and not the Fixed account. It has to be a direct deduction from the sub account because the investment return is not guaranteed, it is not knowable in advance. But insofar as the insurer knows in advance what the return will be on a fixed annuity the insurer simple factors in the ME fee in determing the declared interest rate. This is the way the ME fee on fixed annuities have always been charged. The ME fee just did not come into being in 1952 when the first variable annuity was invented!!!

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Guest Sierra

FT: "The Fees and Other Deductions" section on pp 3-4 is quite instructive. It clearly dispels the assertion that there are no fees associated with a fixed account. Here is the quote:

 

"Fees and Other Deductions. We do not make deductions from amounts in GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate. The following other types of charges may be deducted from amounts held in, withdrawn or transferred from the Guaranteed Accumulation Account: 1. Market Value Adjustment. 2. Tax Penalties and/or Tax Withholding. 3. Early Withdrawal Charge. 4. Maintenance Fee. 5. Transfer Fees. 6. Premium Taxes. 7. Front End Sales Charges."

================================================

FT: As you can see from your copy of the Document most of the fees associated with the fixed annuity are direct deductions from the fixed account. The one that is not is the ME fee which is factored into the declared interest rate.

 

Peace and hope,

Joel

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Guest Sierra

Joes said: "There is no fee in a fixed annuity the rate is declared by the insurance company in the same way a bank declares it interest on cds."

===============================================

Joes: Would you care to change this statement?

 

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Guest Sierra

Joes said: "All teachers approaching retirement should meet with an agent to discuss the fixed annuities available to them."

 

Joes, do you sell fixed annuities?

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