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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Re: AXA Equitable Asset Mgt Investment Date: 6/15/2005 10:25 PM
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Hold the presses!

Folks, I am a bit surprised (though I guess I should not be) that you are giving blanket statements about a contract you know little about. As an Advisor, I am familiar with this particular contract and I consider it to be one of the best in the industry.

Life, I would recommend this contract to you if you meet the following criteria:

Don't want to risk ever losing your principle
Want guaranteed income (in this case 6%)
Want guaranteed increase in death benefit

I would not recommend this if you are comfortable with market volitility as the expense will be higher in a VA for the same investment.

What makes this contract nice is that you can pull out 6% a year of your ORIGINAL investment, regardless of current account value, and you can increase that 6% to a higher dollar amount in future years if your account does better than 6% (as, for example, the Moderate Allocation acount has done).

If you don't take the 6% (or you take a portion of it due to RMD, for example) the rest of it is applied to the increase in death benefit. So, you could take 4%, apply 2% to the death benefit, regardless of the account performance, up through age 85 (when the 6% is maxed out but the account performance can still take the DB and the income higher).

Also, it is NOT true that you broker necessarily makes more money from an annuity, especially if your broker is a bank broker. I work as a FA for a large national bank and I get 4% to my gros commission for any annuity. I also get 4% for a mutual fund sale. I only make more money on an annuity sale when the contract goes about 50k and only then because on mutual fund sales, the client gets breakpoints starting at 50k (in most situations). Additionally, I make less on an annuity if the client is older (80+). On some annuity sales, I make only 1% to my gross commission.



To recap, if you are uncomfortable with the volitility the market can present and you need a guaranteed income stream, this is a great contract.

NO MUTUAL FUND OR STOCK can give you the same protection. Sure you pay for it in fees (and you get what you pay for) but 6% is still 6%.
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