Annuities and the Hundred Thousand Dollar Challenge

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  1

  ObliviousInvestor

  09/23/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Oh man, this should be amusing. I love that you actually take these people up on their offers. (This guy and the people who made your dog one of America's Top Financial Planners.)
  
  Also, if I pitch you some B.S. investment, can I get a link too?

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  2

  Allan Roth

  09/23/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  ObliviousInvestor,
  
  Sure - but only if you can give me market returns without risk.
  
  Also, I have to run any story ideas by my dog, Max, since he is one of America's top financial planners.
  
  Let's give this guy a chance & I'll let you know how it turns out.

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  3

  finnetusa

  09/23/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  What I don't understand is how you can be under the impression that you are about to buy your first annuity when Mr. Anderson clearly told you it was a life insurance policy? My money is on Mr. Anderson!

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  4

  georgej27

  09/23/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Brett Anderson will win; he didn't say anything about annuities, he was addressing an Indexed Universal Life Insurance Policy. Like he stated " It depends on what company you use..
  
  George J. Shinn

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  5

  Allan Roth

  09/23/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  He actually never used the word "Universal" and was replying to my column about annuities. I don't care what you call it, if it gives me 8% minimum annual cash return, I plunk over the hundred grand, write about it and send my clients to him.
  
  Fair?

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  6

  larry swedroe

  09/24/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Bigfoot and the Abominable Snowman will both show up in pink ballet slippers at your next cocktail party before you see the product

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  7

  mfinder

  09/24/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  You are about to find out why ALL investors except those in "annuities" and EIUL life insurance policies (with the right company and plan), lost up to 40% of their wealth. Mr. Anderson is about to re-distribute some of your wealth! In doing so maybe you can point the way to safer, performing vehicles instead the traditional crap that is being served up to unsophisticated as well as sophisticated investors. You may have to change your moniker to The Rational Investor.

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  8

  MrRosemary

  09/24/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  If there's one thing markets do well, it's exploit ways to make money and minimize risk. If you can get 8% risk free returns, which is a 4.5% premium on the next closet Risk Free Asset (Treasurys), why isn't everyone? Why aren't private equity and hedge funds jumping all over this?
  
  

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  9

  Allan Roth

  09/24/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Mfinder,
  
  You haven't been reading my columns. A 60% equity & 40% bond portfolio lost less than 10% over the past year. If one rebalanced quarterly (acting rationally), they lost less than 5%. All one needed to do was to own the total stock markets and total bond market.
  
  That seems to be to be way less than the 40% you mention. Of course one needed to stay away from expensive products like active mutual funds, variable annuities, and the like.
  
  

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  10

  Allan Roth

  09/24/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  MrRosemary,
  
  Why let logic get in the way of a good sales pitch. I think you are, of course, 100% right.
  
  

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  11

  Allan Roth

  09/24/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Larry,
  
  I suspect they will show me the product. It will be part of several hundred pages of disclosure. I'm getting pretty good at finding the fine print such as wording like "100% of the average annual return of the S&P 500 index," which translates to 50% of the return of S&P 500 stocks, excluding dividends.
  
  

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  12

  mikefrost576

  09/25/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  So typical and completely expected that someone like Allan
  Roth and others above slam and berate Mr. Anderson's
  proposal. First of all, Anderson isn't talking about an
  annuity. He makes it clear it's a life policy. I myself have
  one of these, and I also have a significant portion of my
  money outside it, inside investments that people like Mr.
  Roth most likely manage. Those investments got creamed
  last year. Lost ~ 40% and has since, thankfully "come back"
  nicely.
  
  The life policy Anderson talks about is an Index Universal
  Life policy, one of which I have. I lost NOTHING on it last
  year and as the market comes back, I can make somewhere
  around up to 14% return without any downside risk (those
  of you talking about an 8% guaranteed return, Anderson
  isn't saying this. The 8% comes from a long term expected
  return just like one would assume in a portfolio of stocks).
  
  In a vacuum, the product is not perfect by any means, but it
  has a fantastic place in my world - long term investing
  without any market risk and no taxation on the
  withdrawals). Often, one will crucify these type of policies
  without any regard to what the alternative would be outside
  of it. In addition, when improperly designed, the policies
  offer no value at all, especially when designed by a
  "planner" who cares only about himself and the
  commissions received when jacking up the costs of the
  policy whereby the investor will absolutely reap awful
  returns (it would be analogous to investing in a mutual fund
  with 15% internal fees).
  
  Speaking of fees, many advisors speak freely about their
  "low" "1%" fee... but has anyone really added up what these
  fees mean and how much they wind up costing the investor
  over time? COmparatively, and shocking to many, when
  compared to a properly designed insurance policy, the
  insurance policies wind up coming in with LESS fees than
  the typical advisory fees, especially when an advisor uses
  the typical mutual funds that are often infested with fees.
  
  When properly designed, however, these life policies can be
  a fantastic compliment to a traditional portfolio of stocks
  and bonds. And for those (like I used to be) who only listen
  to conventional planner/advisor wisdom, keep going for the
  ride of taxation, losses and hope that things will work out. If
  you opened your minds a little and heard the FACTS of a
  well designed policy, you just might learn something new
  and realize that it could be a great compliment to your
  portfolio of stocks/bonds that also deserve it's place in the
  world as much as this also does.

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  13

  Allan Roth

  09/25/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  mikefrost576,
  
  You are mistaken whey you say I "slam and berate Mr. Anderson's proposal."
  
  In actuality, I haven't even seen it yet and have agreed to buy it as long as it does what he said - return an 8% minimum annual return.
  
  You also fail to realize I have recently written about looking at total fees and that I'm very stingy about paying much in the way of fees and still having a good portfolio.
  
  

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  14

  mfinder

  09/25/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Allan,
  I take exception to that 5% (Net of fees?)because what I
  see in the trenches is that ordinary people, remember those
  96% that will make it to retirement at or below the poverty
  line?, cant afford a fee only planner. They rely on talking
  heads or "friends" at work. They don't understand re
  balancing because they can't afford the education. Business
  colleges have proven over and over, a monkey with a
  blindfold and a dart can pick stocks as good or better than
  the pros. This is something that simply works, oh sorry, it
  doesn't need management

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  15

  Allan Roth

  09/25/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  mfinder,
  
  What do you mean when you say "I take exception to that 5% (Net of fees?)?"
  
  When you compare the monkeys to the pros, I think you unfairly insult the monkeys. Monkeys work for bananas and don't have the human instinct to keep throwing the darts.
  

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  16

  mfinder

  09/27/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Ok, I guess that I'll have to type slower. I was under the
  mistaken impression that we could have a intelligent
  discussion. 1. Net of fees is a simple question I always ask
  when a money manager states "his" track record. It
  invariably is a number that neglects the actual rate of return,
  net to the investor. More often than not the actual ror for
  the investor is lower than the "sterling" number quoted by the
  planner. 2. Wharton School of business, was the insignificant institution that proved this study, several times,
  in fact. Now, I would think that it would be the the pros
  might feel a bit insulted, however, it seems to prove the point
  that even the monkey knows to stop throwing the darts
  when there is no reward, (bananas), The pros keep
  throwing (human instinct? or greed? in the face of losses). They also possess one skill the monkey does not
  have...excuses.

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  17

  Allan Roth

  09/27/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  mfinder,
  
  regarding your statement:
  
  "Ok, I guess that I'll have to type slower. I was under the
  mistaken impression that we could have a intelligent
  discussion."
  
  For the sake of this discussion, let's go with your belief that your intellect is far superior to mine. I'm really slow.
  
  When you say "I take exception to that 5% (Net of fees?)...," can you just tell me where I said so I can have some context on the exception you take?
  
  Thanks for indulging me on this simple request.

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  18

  Shifterdog

  09/27/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Allan,
  
  You sure bring 'em out of the woodwork. Reminds me of the time I attended a meeting where Sheldon Jacobs of "No Load Fund Investor" fame was presenting. A couple of financial advisors in attendance tried to make the case for front end loads. Mr. Jacobs made mince meat of their arguments. My bet is that Mr. Anderson's scheme will be too clever by half. There will be weasel words involved. Enjoy the fine print.
  
  

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  19

  Allan Roth

  09/27/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Shifterdog,
  
  Thanks for the comment. Mr. Anderson is, so far, respectful and seems to be interested in dialogue. Whenever I write about insurance investing, I seem to get the nastiest emails from many that sell them.
  
  

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  20

  joreal2479

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  I have sold those annuities and i knwo for a fact there is no guarantees like that out there. I am surprised this gentleman can get away with saying what he says. Well I guess i will just buy some popcorn & watch the show as it unfolds.
  
  John Mylant
  http://mylantsmoneyblog.typepad.com/

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  21

  Allan Roth

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  John
  
  I've received some of the information - i'll have some follow up questions and then write the column, encouraging Mr. Anderson to comment on anything he disagrees with. Show time should be next week - BYOP (bring your own popcorn).
  
  Allan
  
  

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  22

  mfinder

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  It never ceases to amaze me that when you offer what might
  even begin to look like you are taking sides. You are immediately labeled, "one those guys who come out of the
  woodwork". I do this for a living, which means that I have
  licenses that I have had to sit and qualify for, Shifterdog, not
  just go to meetings. I have knowledge of the subject. Not
  just some subjective crap that promotes the specific blog or
  agenda, and just because I am in the business, and maybe I
  make my money differently than Mr. Roth doesn't mean that I
  don't care about people and their futures. It is becoming
  clearer the demographic you write to, Mr Allen. I too will wait
  for the outcome. I am through with your kool-aid drinkers.

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  23

  Allan Roth

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  mfinder,
  
  The above is your response to my question -
  
  "When you say "I take exception to that 5% (Net of fees?)...," can you just tell me where I said so I can have some context on the exception you take?"
  
  It doesn't seem to address my question.
  
  Also, who is the "Mr. Allen" you refer to?
  
  Finally, I would like to extend the offer to you that I'll also send a check for $100K if you can give me an investment that yields a minimum of 8% annually . Your you, I'll drop it to 7% annually.
  
  Let's deal with facts here. If you make a statement back it up. I don't think that getting mean spirited helps your cause.

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  24

  mfinder

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  I am sorry if you see this as "mean spirited", it is not. On
  9/24 your post "You haven't been reading my columns. A
  60% equity & 40% bond portfolio lost less than 10% over the
  past year. If one rebalanced quarterly (acting rationally),
  they lost less than 5%. All one needed to do was to own the
  total stock markets and total bond market."
  I hear this all the time about how if people would follow the yellow brick road devised by some "advisor" they would have
  only lost less than 5%. There is never a "net to client"
  number bragged about. That's what I'm talking about. Lets
  get real. All these numbers don't mean anything. What
  counts is what you keep. That is your only hope for a future
  with dignity, not hypothetical %'s. My grandmother would
  kick your butt if you talked that way to her and I believe that
  is why so many elders are in the bad shape they are in today
  because "advisors" are to busy using 'Financialspeak" instead
  of facts. Sorry, the Greatest Generation and most likely, the
  Boomers, having to live at or near the poverty level makes
  me "mean spirited

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  25

  mfinder

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Sorry, In my zeal, I referred to you as Mr. Allen. Please correct.

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  26

  Allan Roth

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Stick to the facts rather than how your grandmother would kick my butt.
  
  I can't correct your comments. They remain for all to see.
  
  As you know, I'm not talking about hypotheticals - real numbers.
  
  If you want to disagree with something I say, my advice would be to make sure I actually said it.
  
  I'll ask one final time -- When you say "I take exception to that 5% (Net of fees?)...," can you just tell me where I said so I can have some context on the exception you take?"
  If I didn't actually say this, I think your credibility would go up if you just say you made this up.
  
  Let's deal with facts on this blog. I'm sure all the readers know what you think of me and I can live with that.
  

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  27

  mfinder

  09/28/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  OK, since this is your blog and you can be as "intelligent" as you can make your self to be...As you might read in my second to last post. I showed you that on 9-24, in fact I cut and pasted what you said, here I'll past it again for your edification: Read slowly, this is your quote, it's at the top of the page:
  
  You haven't been reading my columns. A 60% equity & 40% bond portfolio lost less than 10% over the past year. If one rebalanced quarterly (acting rationally), they lost less than 5%. All one needed to do was to own the total stock markets and total bond market.
  
  That seems to be to be way less than the 40% you mention. Of course one needed to stay away from expensive products like active mutual funds, variable annuities, and the like.
  Since you are the one giving the advice, charging the fee certainly the ror is less to the client. Less in the client's pocket = lower ROR than quoted. Why is this such a sticking point for you. You "fee only" guys always get your ******* in a knot over the same question. The math is insanely simple, regardless of when or how you pay for something you have less than you started with. Just to put an end to this increasingly acrimonious "blog", running you in a circle has been delightfully entertaining. I cant wait to see if you have the credibility to honestly critique Mr. Anderson's challenge. We'll see

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  28

  Allan Roth

  09/29/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  mfinder,
  
  Yes - these are net of fees. You would have to go to the library and check out the book I wrote "How a Second Grader Beats Wall Street" and then buy the three funds used in the calculation. They are VTSMX, VGTSX, and VBMFX.
  
  Are you willing to take this challenge of my $100K to yield a guaranteed 8% (though I lowered it to 7% for you) annual return?
  
  Here's a chance for you to back up your your views. A "yes" or "no" would be fine.
  
  

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  29

  DougDiggerEberhardt

  10/01/09 | Report as spam

  RE: "Tax Free Income" Annuities and the Hundred Thousand Dollar Challenge

  Hi Allan,
  
  I'm late to the discussion, but in your reply to the challenge, make sure you address the "tax free income" claim that he is making.
  
  This tax free income will come to the person for a certain amount of years and then will have to cease "if" the life insurance policy were to lapse for any reason (for lack of sufficient funds to pay the mortality cost in later years). The lapse would result in the entire tax free amount taken as income by the individual to become taxable the year of lapse.
  
  This could be hundreds of thousands of dollars that taxes would be due on, minus the principal (FIFO accounting rules).
  
  Of course the joke goes, the insurance agent could tell him what the tax bill is going to be just before the policy lapses and the result would be he'd die of a heart attack and collect on what's left of the insurance, haha...
  
  If people live too long AND/OR the computerized projections came up short, they'll have to pay the piper.
  
  Anyone that claims they can project 20-30 years into the future what the market will do and when morality hits is full of beans. Even 10 years into the future is difficult. And 8%? How can anyone justify this? Stocks used to pay dividends and they hardly do anymore so most of that 8% would have to come from capital appreciation. Hardly!
  
  And lets not forget that the "guaranteed" column of these life insurance policies can come into play where insurance companies can increase fees and mortality costs. Who is to say the won't?
  
  Naturally I know you'll read the 100 pages of fine print!
  
  Look forward to your response....

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  30

  Allan Roth

  10/01/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  DougDiggerEberhardt
  
  Good point and you are right. If the policy lapses, you get hit with a tax bill just when you can't afford to pay it.
  
  Thanks.

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  31

  hikinganimal

  10/01/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  I work with IUL policies and am here to tell you they work well and as Brett proposes. As far as lapses...that doesn't happen. By the time the client is taking out retirement funds, he/she has completed any investment requirements to maintain the policy. The only way there could be a "lapse" is if the insurance company holding the policy were to decompose. But why should we worry? we have Obama to bail us out.
  
  To those nay sayers who don't like the discomfort of learning something new, I look forward to Brett Anderson's submission. I know how it will look, and I have never seen anything perform like these IULs.

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  32

  DougDiggerEberhardt

  10/02/09 | Report as spam

  RE: IUL and Lapses

  hikinganimal;
  
  First, I don't have an axe to grind with the industry and I'm not selling anything, so what I say is unbiased. That said, I did work in the insurance and investment industry and write about it now.
  
  My guess is you must be new to the insurance business.
  
  You said; "As far as lapses...that doesn't happen. By the time the client is taking out retirement funds, he/she has completed any investment requirements to maintain the policy."
  
  Yes...they have put the money in, but it is the rate of withdrawal that matters as well as the return on investment, fees and mortality costs that weigh on the issue.
  
  When you run an illustration that projects what will occur in retirement for the person who is contributing to the IUL policy, what guarantees are there that the policy will perform as illustrated?
  
  What you're implying (to your clients) is that the policy illustration will return x% for the life of the policy (average return) and that mortality expenses will remain the same as well as expenses.
  
  There are no guarantees of this, but there is a guaranteed minimum column that every illustration must show to a client with maximum expense and mortality costs built in. I'm sure you'll agree that this column will almost always run out well before mortality.
  
  What you have to consider is that what if we went through a deflationary decade of low interest rates like Japan experienced the last 10 years? Can you "predict" that won't occur? Some now say it will.
  
  In addition, you are implying that the person will die by a certain date before the policy lapses. What if they live longer than that? Are people living longer? Sure.
  
  These policies as presented could turn out fine, but for others will be ticking tax time bombs. There are no real guarantees when insurance ompanies are running hte show and can change the game at any moment (higher expenses and possibly mortality costs) despite the "assumed" rate of return you are projecting coming to fruition.
  
  

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  33

  Allan Roth

  10/02/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  hikinganimal
  
  So you do believe a consumer can get an 8% return, without any risk? Can you confirm?
  
  Thanks.

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  34

  melmart1000

  10/06/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  no comments at this time . please alert me when new posts are added

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  35

  Allan Roth

  10/06/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  I'll be posting an update in the morning. On Monday, I'll write about whether or not I'm buying the product and parting with $100K.
  
  

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  36

  Brett A

  10/09/09 | Report as spam

  Policy Lapses

  I'm the advisor who took up Allan's challenge. With any investment if you are not prudent in its management you can strip out all of the cash value over time and cause it to lapse - an Indexed Life Policy is no different. You have to use common sense in managing the withdrawals of all investments over decades so that doesn't happen.
  
  But lets say the worst happens and the stock market starts earning 0% every year, and/or someone does mismanage their policy so that it is going to lapse. With an Indexed Life policy, all the companies except 2 include what is called an Overloan Protection Rider. This guarantees the policy will stay in force and NOT lapse before death and trigger a tax bill. Upon death the tax free insurance benefit settles the balance on the policy and the estate of the insured has no tax liability. This benefit is not available with whole life or variable life, or ordinary universal life policies, so is another major factor and benefit of having an Indexed Life plan.
  
  As for the minimum guaranteed expense column, as was noted when run at maximum allowed costs at some point the column goes to zero -- but not when run at current costs. The major companies that are 100 to 300 years old have never raised the costs on an issued policy. The company that I'm recommending for this challenge and that I regard as having the best plan, is one of only a handful that have actually lowered costs in an already issued policy. There is of course no guaranty that this will never happen, but at some point you have to believe the market will perform in the future the way it has in the past, and that the sun will come up again in the morning. We have to make plans based on what is likely to happen, not focus 99% of our energy on the absolute worst that is very unlikely to ever happen.
  
  
  Brett Anderson

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  37

  DougDiggerEberhardt

  10/10/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Hi Brett,
  
  Appreciate your response and I did read the other thread and look forward to the outcome.
  
  First, the "Overloan Protection Rider" is intriguing. Naturally there would be a cost associated with such a rider and I'm sure there are rules one must abide by in order for the rider to kick in. I'm sure Alan will address these.
  
  Second, how long will I live? I think you know what I'm getting at here. Mortality tables tell me I'll die a certain age, but I could live much longer (as the company you are recommending even knows as they have lowered their mortality costs). Who is to say I won't live longer with the advances in medicine? But then again, maybe government imposed health care will take care of that problem (joke).
  
  You did address the guaranteed column issue. The fact that the company you are working with actually lowered costs is important as people are living longer (seems they may be ignoring the standard mortality tables which is good and shows you've done your homework).
  
  Thirdly, are the loan interest rates guaranteed not to exceed a certain rate? If so, that would be great.
  
  My point was just that it's not all just black and white which I'm sure you agree with. There are many variables that come into play.
  
  Lastly, I don't "focus 99% of (my) energy on the absolute worst," but I do think that it is very likely to happen, not "unlikely" as you assume. I base this on my own economic analysis.
  
  I believe there are ways to take advantage of market conditions and I'd rather have that control than leave it in the hands of "the professionals." Does this policy give me control when it comes to investments and if so, to what extent (choices of investments)? Being that it is an Indexed Life Policy , I'm pretty sure I have no control. Then it becomes a matter of what return can I expect to receive on the policy? and how is that return justified? by the S&P expected return (which historically has mostly come from dividends)?
  
  Will be interesting to see what the credited interest column is based on as short, medium and long term investments by all insurance companies are paying at most round 4% or so on U.S. government bonds with the potential of additional interest on corporate (the bulk of what backs the general account which I assume the product you are recommending is backed by, and not the separate account that back Variable products).
  
  Jim Rogers sees U.S. government treasuries as the next bubble to pop. http://uk.reuters.com/article/idUKLNE59802520091009?pageNumber=2&virtualBrandChannel=0
  
  Naturally these are interesting (unique) times we live in and the past is not indicative of the future with the action our government via the Fed and Treasury are taking.
  
  I was educated by these money professionals and I didn't agree with them. Instead of branding myself as a contrarian, which I could have like Peter Schiff did, I chose to take on a bigger task, which ironically, Peter Schiff is now doing with his run for senate (good for him).
  
  I can't really address anything else until I see which company you are working with and will wait for any further response once I've seen what Alan has posted (which I may agree or disagree with).
  
  I can tell you know your stuff and you believe in what you sell to the point of challenging the status quo. I give you credit for that. I've been doing the same with investing in gold on Forbes.com, WSJ.com and other sites and only Larry Swedroe from this site, CBS MoneyWatch, has responded and we've had a good discussion. That's why I'm willing to hear what you have to say.
  
  Back in the day, I sold some insurance polices with maximum funding under 7702 of the IRC with the same hope of allowing the client to take out the tax free income at retirement. Back in the day, the market performed as expected. Also, policies worked on a FIFO basis which gave the insured even more advantages. Back in the day...
  
  I know you mean well Brett...and don't mean to discredit you personally in any fashion. Just trying to discuss the facts and have you educate me on that for which I may not know (like Allan).
  
  We may just simply disagree on market conditions and future performance, and that's ok. I'm used to that, ha!
  
  In a perfect world, your product could perform wonderfully (earning a consistent market return, taking out the maximum tax free income at retirement and dying just before the policy were to lapse thus winning the mortality game with the insurance company as they would have to payout to my heirs what's left). In a perfect world...
  
  I figured I'd get a lot of my thoughts out there so Alan can at least consider some of them that he may not have thought about in replying to your challenge.
  
  Doug
  

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  38

  Allan Roth

  10/10/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  Doug,
  
  Thanks for your thoughtful comments.
  
  I will address:
  
  1) my likelihood of getting market returns.
  
  2) the downside protection
  
  3) Whether the insurance company believes this is an appropriate product for a pure investments.
  
  4) Any omitted but material facts in Mr. Anderson's communications.

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  39

  Allan Roth

  10/12/09 | Report as spam

  RE: Annuities and the Hundred Thousand Dollar Challenge

  The outcome is now posted:
  
  http://moneywatch.bnet.com/investing/blog/irrational-investor/insurance-investing-and-the-10000000-challenge-the-outcome/654/