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Thread: The Great Annuity Rip-Off

  1. #1

    Default The Great Annuity Rip-Off

    Kiplinger - Timely - Trusted - Personal Financial Advice

    I've found Kiplinger to be the largest collection of financial clueless clowns on the Internet.

    THIS article titled The Great Annuity Rip-Off written by Kimberly Lankford is a prime example of just how utterly ignorant Kiplinger is on the topic of annuities in general and FIXED annuities in particular.

    What's worse is the fact they allow absolutely false, misleading and inaccurate information to remain on their site.

    Let's have some fun with Ms. Lankford by pitting her words against actual fixed annuity contract provisions.

    We need to go no further than her opening remarks.
    Kimberly Lankford wrote:
    Seven years ago, when Alice Bouchard was 85 and needed her money to be easily accessible, an insurance agent sold her a deferred annuity that tied up her money until she was 101. If she had needed to withdraw the money during the first five years after buying the annuity, she would have paid a massive 25% surrender charge.
    Now I don't doubt the un-named annuity product had an "ANNUITY DATE" set for 16 years in the future and IF the un-named annuity product did in fact have a 25% surrender charge during the first 5 contract years it would have been because it paid an UP-FRONT interest bonus in the neighborhood of 10% perhaps for ALL new premium going into the contract during the first 5 years. We will never know since she doesn't say which insurance company product she's referencing.

    Attorneys, News Media, Stock Brokers and Bankers simply cannot seem to comprehend the plain English meaning of Annuity Contract terminology.

    Seniors over age 70 who buy the vast majority of annuities nationwide have no problem understanding:

    The Annuity Date printed on the Contract Data page or the Surrender Charge schedule CLEARLY written in BOLD print on the Contract Data page or the plain English terms of the 10% FREE Withdrawal provision. Please click on the links to see these as they actually appear in most ALL fixed annuity contracts.

    On the Contract Data page of a case I just wrote it shows the Annuitant's age 79 and an Annuity Date of 05/16/2034. She will be 105 years old on the Annuity Date.

    But what does the Annuity Date mean and can it be changed?

    The Annuity Date is the maximum date in the future the Annuitant can hold the contract in tax deferral. On the Annuity one MUST elect a settlement OPTION. The Owner/Annuitant can CHANGE the Annuity Date to ANY date after the first contract year.

    So when this clueless clown Kimberly Lankford writes:
    "...an insurance agent sold her a deferred annuity that tied up her money until she was 101."
    She's referring to the Annuity Date printed on the Contract Data page without an elementary understanding of what that term means in the contract and she either conveniently doesn't inform her reader's the Annuity Date can be changed or simply doesn't know the subject matter on which she's writing about.

    Moving on to her next half truth, by the way, a half truth is a lie, also known as, a material misrepresentation:
    If she had needed to withdraw the money during the first five years after buying the annuity, she would have paid a massive 25% surrender charge.
    Hmmmm, this gives the reader the impression that ANY money withdrawn during the first 5 years would incur "a massive 25% surrender charge."

    Really? What about the 10% FREE Withdrawal provision. Did you forget about that Kimberly or do you just not know or are you purposely misrepresenting yourself again?

    A person would have to go out of their way and do extraordinary research to find ANY annuity product sold by any Insurance Company that DOES NOT have a 10% FREE Withdrawal provision.

    Please review the actual fixed annuity contract provisions below.

    Please read Ms. Kimberly Lankford's article in its entirety.

    Then please post your questions about any of her absurd blanket condemnations regarding an entire insurance product line of which over $200 billion dollars are invested in each and every year and I will be happy to respond.

    The Contract Data page:


    The Annuity Date clause:


    The 10% Free Withdraw provision:


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  3. #2

    Default Re: The Great Annuity Rip-Off

    Bet you sell these things, huh?
    Official Retirement Date: 06-31-2014!

  4.  
  5. #3

    Default Re: The Great Annuity Rip-Off

    Yes, I have been selling Fixed Annuities, Life Insurance, Disability Income, Medical Insurance and Long Term Care Insurance since 1985 along with comprehensive Estate Planning and the funding of Irrevocable Life Insurance Trusts with Second-to-Die policies.

    Thank you for asking.

    Did you have a question regarding something written in THIS article you would like for me to answer?

    By the way, click HERE to read exactly correct information from Charles Schwab.

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    How do index annuities work?
    You purchase an index annuity contract with a single premium payment. Earnings are linked to a formula based on changes in select equity indexes. If the index goes up, you share in the gains, up to the annual interest rate cap. If the market goes down, you're protected—your principal and credited interest can never decrease due to market declines.

    Get the best of both worlds.
    Index annuities are appealing because like traditional fixed annuities, your principal and credited interest can never decrease due to market declines, with all interest tax-deferred until you make withdrawals. However, index annuities also offer the opportunity for higher returns than many bank or traditional fixed rate vehicles by linking the interest rate to certain equity indexes. Then, when it's time to receive a payout, you can choose from a variety of options to set up a reliable stream of retirement income.

    For clients looking to benefit from the performance of leading market indexes while guaranteeing principal protection plus minimum growth, Schwab offers a five-year and a ten-year contract. Choose either the S&P 500® or the Dow Jones Industrial AverageSM as your benchmark.

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  7. #4

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    as they actually appear in most ALL fixed annuity contracts.
    I thought this word use and capitalization was pretty funny. Double speak at its finest...

    Wouldnt CFP be better title to get than one you literally make up?

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  9. #5

    Default Re: The Great Annuity Rip-Off

    ChemEng, this thread is about THIS article titled The Great Annuity Rip-Off written by Kimberly Lankford and how it's a prime example of just how utterly ignorant Kiplinger is on the topic of annuities in general and FIXED annuities in particular.

    Did you have a question regarding something written in THIS article you would like for me to answer?

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  11. #6

    Smile Re: The Great Annuity Rip-Off

    A fitting post within such a descriptive thread title.
    Thanks Gary! Sharing what you know is appreciated.

    Now, if I could only find the time to read the damn things (LoL).

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  13. #7

    Default Re: The Great Annuity Rip-Off

    Yep, we get it... your'e selling annuities... be sure to pay Tom for your ad...
    Official Retirement Date: 06-31-2014!

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  15. #8

    Default Re: The Great Annuity Rip-Off

    You answered the questions you posed in your article thanks to your double speak.

    Quote Originally Posted by GarySpicuzza View Post
    Really? What about the 10% FREE Withdrawal provision. Did you forget about that Kimberly or do you just not know or are you purposely misrepresenting yourself again?
    Quote Originally Posted by GarySpicuzza View Post
    as they actually appear in most ALL fixed annuity contracts.
    "Most all" is not the same thing as "all." Therefore, it is likely she could have been writing about a fixed annuity, that you admit exists, that does not have the 10% redemption clause.

    Some more questions:
    1. Why didn't you disclose your financial interest about fixed annuities in your initial post?
    2. What motivation would Kiplinger's have to misrepresent fixed annuities? On the other hand, what motivation would you have to attack their article?
    3. If your position is different and valid, why don't you write up an article as a rebuttal. I'm sure Kiplingers would entertain reviewing it.

    As it is, your comments sound very similar in tenor to the UFF/MMA scams that are posted on other various finance boards. So I am inclined not to give them much credence above a person simply trying to make a paycheck.

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  17. #9

    Default Re: The Great Annuity Rip-Off

    ChemEng wrote:
    "Most all" is not the same thing as "all." Therefore, it is likely she could have been writing about a fixed annuity, that you admit exists, that does not have the 10% redemption clause.
    The 10% Free Withdraw provision is a standard contract provision on virtually ALL annuities. I know of no fixed annuity with any company that DOES NOT have a 10% free withdraw provision.

    ChemEng the rest of your questions have nothing to with annuity contract provisions much like Ms. Lankford's article doesn't say anything about actual contract provisions and benefits.

    Now if you would please take the time to read her article in its entirety and please quote something she wrote I'd be happy to reply.

    Please don't make this thread about me personally.

    I want the annuity buying public to have the EXACTLY CORRECT information so they can make an informed decision.

    I'll ask again just to hammer home the point, READ Kimberly Lankford's article then please copy and paste some outrage regarding an ACTUAL policy provision and I'll reply.


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  19. #10

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    Default Re: The Great Annuity Rip-Off

    Annuities Attachment 3938
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    =$44.91 a Barrel, Daily Status +$1.85

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  21. #11

    Default Re: The Great Annuity Rip-Off

    Quote Originally Posted by GarySpicuzza View Post
    The 10% Free Withdraw provision is a standard contract provision on virtually ALL annuities.
    More double talk--"virtually all" is not the same as "all." Until you can reconcile your language with your intent, then it is possible that she is referring to one of those annuities that does not include that language.

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  23. #12

    Default Re: The Great Annuity Rip-Off

    ChemEng,

    Please tell me the Insurance Company name and the specific product Ms. Lankford is talking about? Without THAT information she may as well be making up the whole story.

    There isn't an annuity contract written that DOES NOT have a free withdrawal provision.

    None.
    Nada.
    Zero.
    Not ONE.

    10% is the typical MINIMUM, some contracts allow 10% per year but if no withdraws are taken up to 50% cummulative or 20% every other year if no withdraws were taken in the previous year.

    Annuity threads are always so much fun because setting aside the Surrender Charge schedule nobody can EVER come up with another negative feature.

    ChemEng, tell me something, "OTHER" than the Surrender Charge schedule, what's the "other" negative feature in a FIXED annuity contract.

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