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No. of Recommendations: 21
What field of work are you in?

Most people posting about annuities on this board are sales people and end up leaving with their tail between their legs. New member, recommending annuities, probably in sales. However, you get the chance to prove me wrong.

Yes, I'm a bit jaded.
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No. of Recommendations: 21
On the assumption that someone promoting the product would correctly spell the company name, I'll comment. It looks like more of the "low-risk, upside participation" sales pitch that is common in many indexed or variable life products. They use two key danger-signal phrases in their marketing: "no market downside", and "100% success rate" (referring to back-testing of their results).

The RELOC seems like a great deal for them - let you borrow money at an above-market rate, and then allow you to pay it back with your capped gains. They keep your interest and any gains above the cap. Note it has a side effect of converting your 0% downside into a downside of the interest you're paying on the loan since the gains aren't guaranteed but your loan is guaranteed to them by your principal.

And not mentioned anywhere that I could quickly find are whether the premiums are fixed or variable. These products typically escalate premiums, sometimes substantially, in the later years. If premiums are variable, that would be a deal-killer.

It seems like a small company with a limited history so I'd worry about counter-party risk.

Remember that they are primarily salespeople with a single product to sell so will make it look as good as possible.

Two links:
Bogleheads discussion of this exact product: https://www.bogleheads.org/forum/viewtopic.php?t=324990
Investopedia on IUL Pros and Cons: https://www.investopedia.com/articles/personal-finance/01241...
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No. of Recommendations: 2
I"m sure the 'new' Indexed Universal Life policies are even better at removing cash from your accounts to the accounts of the Life insurance company and the sales agent than the previous 'old' version.

If you move enough money to one of these, he/she gets to buy a new car every two years courtesy of you......for the first ten years at least.

The Insurance Company will thank you too. If the market tanks, not only will your account drop due to the large fees....but at some point, usually are 'insufficient' in income to fund the high fees so they start eating away at your 'principle'.

Nope, run, run, run fast from anything 'indexed' and 'annuity' and 'life insurance' in any combination.

They'll use the absolute ideal periods to show you how you should make out like a bandit...but in nearly all other cases, it is them that make out like a bandit.

If you need life insurance, buy TERM insurance, plain and simple.


t.
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We have an annuities discussion board where many such products are discussed.

https://boards.fool.com/too-good-to-be-true-index-annuity-33...

They sound very good, but the gain in a good year is often capped limiting your benefit.

They also have high fees making them very profitable to sell.
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In other words why isn't everyone jumping up and down about them?

Are you kidding? These things are toxic. I'm not even sure why they are legal.
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No. of Recommendations: 24
been shopping for whole life insurance

Nobody who knows anything about life insurance shops for whole life insurance. Because a little bit of investigation and googling will show that these are financially terrible.


I recently discovered a product that is a fairly new evolution of Indexed Universal Life and it seems to offer significant advantages.

You sound like you are making a sales pitch. New poster, posting about "exciting new product".



... why isn't everyone jumping up and down about them?

Because they are crappy. All of them. Every single one of them. We don't need to put a t_urd under a microscope to decide if it is better or worse than other t_urds.
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And there is a 99% chance that you are a shill. So no need for any of us to look at it closely.
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No. of Recommendations: 10
We don't need to put a t_urd under a microscope to decide if it is better or worse than other t_urds

Every so often these boards provide a distillation of truth so potent that it should be regulated by the FDA.
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"I recently discovered a product that is a fairly new evolution of Indexed Universal Life and it seems to offer significant advantages."

The only advantages 'new and improved' offer is to make the sales person even richer, the life insurance company more likely to make money on you...... and you wind up with more pages of details on how they will screw you out of more money as time goes on, in a down market, and in a capped 'up market'.

"Whole life" insures the sales person will likely get annual fees for every year of your 'whole life' for as long as you live. And they live. You're not likely to 'surrender' a whole life policy because you typically lose a lot of what you paid in.

t.
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Because they are crappy. All of them. Every single one of them. We don't need to put a t_urd under a microscope to decide if it is better or worse than other t_urds.


LOL!

The Fool is not a place to come looking for the financially naive.
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No. of Recommendations: 5
Ha! The orginal post by Author: pjamoroso has been deleted.

Guess TMF figured out that he was trying to push this product.
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The orginal post by Author: pjamoroso has been deleted.

He also posted it to one of the paid subscriber boards. His two posts on that thread are still there.
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No. of Recommendations: 1
They use two key danger-signal phrases in their marketing....

There are a few other signals you are getting a sales pitch....

Multiple use of the word 'Safety'
Multiple use of the word 'Guarantee'
Use of the phrase 'Protect your life' when it involves life insurance
Use of the highest marginal tax rate when calculating the tax benefit of the product
Applying the highest marginal tax rate on increases in value that are not realized

Keep in mind when discussing or listening to presentation on insurance company products....

- The insurer has no more idea what the future markets will do than anyone else and so must asset allocate, diversify and de-risk just like everybody else
- Insurers have lots of overhead to pay along the way
- Insurance companies are GRAND MASTERS of hiding expenses. No entity does it better than they do

BruceM
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No. of Recommendations: 3
- Insurance companies are GRAND MASTERS of hiding expenses. No entity does it better than they do

I once went to a dinner presentation for an IUL product, and expressed enough interest that they gave me the 165 page contract to take home and read.
I found individual expense items scattered in a dozen places, scattered all over the 165 pages. Then I went back and and added them all up. The total came to a very high number.

They purposely made it extremely difficult to see all the expenses they buried in the contract.
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No. of Recommendations: 4
We've gone to a couple of those dinners. First red flag: they treat you to dinner at a decent restaurant. So if only one or two people sign up (which is probably all they ever get), they're still making money. That money must come from the people who sign up.

Fortunately after years on the Fool, plus books I've read about finance, I can spot at least some of the "gotchas" pretty quickly (probably not all of them). So we enjoy the free food, and then leave.

I continue the philosophy that I read (Peter Lynch? I don't remember now.) that insurance companies are for insurance, not investment. If I want life insurance, buy life insurance. If I want to use it as an investment vehicle, it's probably not a good idea.
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No. of Recommendations: 3
My mom was a realtor for 25 years (or more. It seems like realtors never really stop being realtors). She had this Hewlett Packard calculator back then that would calculate payments and such. One of these guys stopped by trying to sell her an annuity and she pulled out the HP calculator and said “after your fees and commissions it would take me 7 years just to break even!

He did indeed leave with his tail between his legs.

Had a honest financial advisor tell me the only people who should buy annuities are those who want absolute certainty, hate volatility, understand nothing about investing or money management and don’t care what they leave to their heirs.
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No. of Recommendations: 10
My mom was a realtor for 25 years (or more. It seems like realtors never really stop being realtors).
————————
The old saying is, “Old realtors never die. They just become listless.”

Bill
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