How to finace 30K - Page 2 - The Finance Forums: Financial planning, debt help, loans, mortgages, retirement and 401k, investment, and general finance discussion forums

GarySpicuzza · #11 (**permalink**) 02-16-2008, 12:18 AM

Thanks Mynion here are some product specifications:

Quote:

MasterDex 10 Annuity

Withdrawal Provision:
10% per 12 months, up to 50% of total received premium cumulative lifetime; available after first policy year or 12 months following the last addition of premium, whichever is later.

Bonus: 10% bonus on all premium received during first five policy years.

Systematic Withdrawal: Available starting the 6th policy year.

Cash Surrender Value: 87.5% of premium, less withdrawals, credited at a minimum of 1.5% interest.

Mynion that contract obviously has a restricted Withdrawal Provision BECAUSE of the 10% BONUS paid on ALL premium during the first five years.

The absolute worst cash surrender value for a client who deposited 100k would be $100,047 at the end of the 9th policy year and that assumes the client NEVER received ANY indexed credits for 9 full years. That's simply not going to happen.

The 10% Bonus PowerDex Elite Annuity is the same contract except:

Quote:

Withdrawal Provision: 5% per 12 months, up to 25% of total received premium cumulative lifetime; available after first policy year or 12 months following the last addition of premium, whichever is later.

Index Type: Annual point-to-point with "high water" value.

That contract has a high point to point cap coupled with 10% bonus on all premium first 5 years.

The problem with those contracts really isn't the way interest is credited or the withdrawal restrictions because of the bonus paid or the fact you must hold the contract for 5 years then take payments over 10 years.

The problem is when the client dies the beneficary is upset they DON'T get the full Accumulation Value INCLUDING all bonus paid to them as a lump sum. They must take the payout over five years or forfeit the bonus credited.

I'm not defending Allianz but both of the products above are, as I wrote above:

Quote:

"Two-Tiered BONUS Annuities" whereby one must hold the contract for 10 years then take the distribution over another 10 years to get the highest payout and all of the bonus credit (5 years for beneficiary)

Edit: Quote from your linky.

Quote:

MasterDex 10 and 10% Bonus PowerDex Elite

- The MasterDex 10 and 10% Bonus PowerDex Elite are two-tiered, equity-indexed annuities that promise an immediate premium bonus of 10%. Unlike a single tier annuity, which has one account value and a cash value related to it through a surrender charge, a two tier annuity has two separate and independent values, usually called the annuitization value and the cash value. These values are calculated separately and frequently become further apart over time rather than closer together as the account value and cash value of a single tier annuity do.

GarySpicuzza · #12 (**permalink**) 02-18-2008, 02:14 PM

Back To The Topic:

Rockstar wrote:

Quote:

I will definitely look into that and would not be the least surprised to find out it is woth what it is worth today. The woman she has this money with is less than impressive and quite frankly I don't believe much of what she says.I will need to see something in writing from Prudential [where the policy is I think]---What should I ask for in order to determine what kind of policy she has, what it is worth now and upon death? I will be very po'd if it is not worth the 200K since it is still basically the same as it was 12 yrs ago....Not the best return on investment I ever heard of..

I can't believe I'm going to write what I'm going to write..."quasi" defending a Variable Annuity. The infamous bloated pig with lip stick.

Rockstar for the annuity's Accumulation Value to grow from 100k to 200k within ten years is damn good and represents about a 7% annual rate of return.

The problem with this contract first and foremost is with the contract owner for NOT moving the money from the at risk sub-accounts into the safe fixed account when she had the 200k in the first place to lock in her gains.

It's her fault if she didn't understand the main componets of her contract. The information regarding each and every aspect of that contract is and was available for free.

Don't blame the agent.

An agent can die, move or completely get out of the business, now what would the contract owner do?

Regarding your question:

Quote:

What should I ask for in order to determine what kind of policy she has, what it is worth now and upon death?

The policy form is printed on the very first page of the contract and to get confidential specific information on an in force policy the contract owner would have to call the company.

@ Mynion:

You've piqued my interest... I'm going to have my annuity contact at Allianz run an illustraton on both the MasterDex 10 and 10% Bonus PowerDex Elite just for fun to see how they would compare over the past 12 years.

GarySpicuzza · #13 (**permalink**) 02-18-2008, 07:13 PM

Okay Mynion here's the info on the MasterDex 10 Bonus Annuity.

By the way, they have changed the death benefit payout. Beneficiaries can now be paid the full annuitization value in a lump sum upon death of owner. Contract owner must defer contract for minimum of 5 years then take payments over 10 years.

System would not allow me to pick and choose illustrated years. It defaults to show past 20 year performance had the product been available on February 17th 1989 through February 17th 2008 using the monthly point to point method.