Cool article on variable annuities ... Celsius and Fahrenheit analogy is so well taken. PURPOSE is a key word in any investment decision. Sometimes, it is critical to conserve and sometimes it is exciting to gamble. I've never felt comfortable on imparting "gambling" advice - never sure whether a client fully understands his or her or their position nor my explanation. Like to sleep at night so I've stayed on the insurance side of the fence rather than the investment side. For those seeking security with potential for measured gain, I'd recommend studying up on the coin known as Indexed Fixed (it exists in both the Universal Life and Annuity markets sourced from major A rated insurance companies with billions in assets. In a nutshell, you get a piece of the action in a rise of the S&P 500 (for example) during each year but you do not share in any downside. All your annual gains are vested, if you will. The coolest attribute of the Indexed UL policies is that you can take out your earnings in the form of loans (translation not taxable). Translation, they have both living benefits and death benefits. Naturally, there are waiting periods and penalties if they are not met plus the danger that, if not well-structured, can become a MEC - Modified Endowment Contract yielding costly fed penalties. What's the old saying? There is no free lunch. There is also no substitute for being well-informed. All of these articles and books are great resources to all of us. Just my .02.
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