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    LinnieM's Avatar
    LinnieM Posts: 1, Reputation: 1
    New Member

    Mar 6, 2010, 03:55 PM
    Allianz bad investment
    I obtained a local financial advisor I found online to help me decide what alternatives I have upon waiving my survivor benefit on my husband's upcoming retirement pension, due to us needing all the pension money to pay medical benefits we will no longer have upon a buy-out early retirement. My husband asked if I could not take the benefit to help us use the extra moneynow. Also, our income would now be half of what it was. I felt insecure about doing this, still do, since I do not have a pension of my own and hardly any social security benefits since I did not work many years. I was looking for alternatives. The advisor recommended life insurance with Allianz, and also to roll over my husband's 401K ($217,000) into Allianz. This advisor charges no fee because he gets paid a commission from the companies he deals with. He showed up at the house dressed like a millionaire. He made it all sound too good to be true. Said the product is guaranteed and insured by the gov. The life insurance requires a blood and urine test (my husband is in good health at age 57.) The monthly premium is around $250.00 and too much for us to take out of the monthly pension. I assume my husband could get some life insurance through a bank or AARP, then the premium would be less, since there is no commission taken. I do not trust this Allianz product, so am thinking of declining and seeking other alternatives to the survivor benefit. We have two paid-up homes, a 401K, no debts or children. All I want is a sufficient monthly income should I be left on my own, since social security might not be that reliable in several more years. If my husband took the survivor benefit on his pension, it gives the spouse 75%, but it takes at least $400.00 each month to do so. He rather take the money now. I gather Allianz is a no-no, then?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,304, Reputation: 7692

    Mar 6, 2010, 07:49 PM

    Life insurance as an investment is a no no just to start with, the commission fees will take way too much and it grows at very poor interest rates.

    Hire an investment person who does not work on any commission but is merely paid a fee ( 200 to 300) normally to review your plans and recommend.

    If you take a pension without a survivor benefit, if he dies, you have only the social security to live on. But that is a choice that needed to be made when you started that retirement.

    So I don't care if this was with the top insurance company in the world, I would say no, never, not at all.

    He is a high pressure sales person selling life insurance to make large commissions, not looking out for what is best with you
    bigben77's Avatar
    bigben77 Posts: 1, Reputation: 1
    New Member

    Mar 6, 2010, 10:54 PM
    Disregard the last post... it is filled common misconceptions and obviously was not written by a financial professional.

    First of all, if a fee based is advisor is charging $200-300 you don't want to get NEAR him/her. You get what you pay for in the financial services industry.

    I would suggest you speak with an advisor about a ROTH conversion for you current 401k, that could be a very attractive deal for you in 2010. Since you didn't provide specific details, Are you retired? Husband retired? how much income do you need a month? other assets? I can't speak too specifically on what you should be doing but here are some ideas:

    Roll your 401k into a ROTH and use an immediate annuity to fund some life ins. For your husband. You will have to crunch the numbers and see how much to put into a SPIA (Single Premium Immediate Annuity), if you have anything left throw it into a deferred annuity to provide an income stream upon retirement. I recommend equity indexed annuities, they have the ability to benefit from an up market and have no downside risk. (Allianz Masterdex X was top selling Indexed annuity last year). These annuities usually include some optional death bene riders that might be of interest to you if you cannot afford to fund life ins for your husband. There are some great options for you in terms of a ROTH conversion, I would talk to an annuity advisor immediately.

    Life Insurance COULD be a very attractive option for you. It is def NOT a poor investment depending on what company and type you buy. Permanent life ins is a terrific investment because it grows tax deferred and the death benefit is received by your heirs (in this case, YOU would be bene). Also with current market volatility perm LI is a very safe tool with the upside of a death bene. I would contact a Northwestern Mutual representative in your area. That is THE LI company to work with, the strongest company financially (they will pay out no questions asked), they have the number one sales force in the nation and train that force on ethics/morals. They will look out for YOU, not dig for commission. Also they have paid a dividend for the last 130 years, an avg rate of 7.87% in the last 30 yrs. Keep in mind this money is growing free of taxes... to equal this rate of return you would have to get about 12-14% in the market (taxable accounts) which isn't going to happen.

    There is nothing wrong with having more than one advisor, get somebody to do your annuities and then get a Life Ins. Guy, they will be experts in their respective fields. If you needed open heart surgery, would you let your family Dr. do it? I don't think so. So get specialists.

    Hope this helps.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member

    Mar 10, 2010, 01:30 AM

    I will say up front I'm definitely no expert on life insurance or annuities either one. But I do have some comments to add - just stuff to think about.

    First, any time anyone makes anything sound "too good to be true," I run from it. I don't trust salesmen on commission. This guy is supposed to be YOUR financial adviser, but his commission comes from the companies he deals with? I have nothing against Allianz - don't know much about them, but they're a legit brokerage. I've looked into their mutual funds before and chosen not to get them. No clue how they are on insurance. I simply don't trust someone who's getting paid based on what he's recommending, nor anyone who makes things sound too wonderful.

    If nothing else, I'd stay away from that particular person.

    I've heard bad things about both annuities and life insurance, but everyone has opinions about them both. Which is why I personally would be doing my own research on this stuff. I wouldn't even trust someone who is an expert in that field - that still doesn't mean they're looking out for your best interests.

    I do in fact have a (casual) friend who sells insurance and annuities - she knows quite well what she is doing. She wants to get out of this business because she is basically forced by the company into selling things she knows are trash. That doesn't mean everyone is selling trash or that you can't trust anyone. It just goes to show you that just cause it's an expert doesn't mean it's your interests they're putting first.

    Be careful. Study what the different types of things are. Look out for the fine print, hidden fees and penalties, etc.
    youradvisor's Avatar
    youradvisor Posts: 3, Reputation: 1
    New Member

    Jan 26, 2011, 01:23 PM
    A lot of time has past so I don't know if you have gotten your answer or the help you need. Everyone's situation is unique to a certain degree. My advice to you is to find a few registered investment advisory firms and interview different financial advisors. Find one that you feel comfortable with and trust. Not all advisors are created equal and they may have many different approaches to building and managing your portfolio.

    As for annuities, in general they have their place for the right situation it all depends on the clients needs, goals and risk tolerance. I am usually not a big annuity proponent but I do used them in certain situations for clients. I would be happy to speak to you offline about your specific situation and provide any guidance I can. Initial consultations are free of charge and should be with any financial advisor you meet with. Also look for an advisor that is fee based, meaning they charge based on assets under management. Typically the rate will be dependent on the size of your portfolio. The larger the assets the lower the fee. Based on what you described above the fee should be 1-1.5% annually. Stay away from transactial based advisors or even those that charge based on hourly rates, they make money based on performing tasks so it opens the door for conflicts of interest.

    Contact me here if you would like to speak offline, I would be happy to assist any way I can.


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