The Wall Street Journal headlined this week that U.S. life insurers were building adult potentially dangerous debt levels. This comes from a International Monetary Fund’s news saying that vulnerabilities are growing for U.S. life word providers as word companies have migrated into higher-risk, less-liquid assets.
However a millions spent on promotion and lobbying by a word attention has combined a opposite sense of a low risk low price product. we wrote a new essay about fake reserve claims of word products.
I prominence a new TV ad that facilities a daughter seeking her late Father how he can feel so financially secure about his retirement. He replied that his payments «guarantees us an income either or not Social Security is all there or not.»
To me, he’s implying that his payments is safer than his stream amicable confidence check that to me is perpetuating a fraud. What is worse is that a Federal Judge in Texas has depressed for this nonsense. Verizon in a Texas justice done a evidence that an payments with Prudential was during slightest as protected as a supervision PBGC guarantee.
In another essay on fast value or GIC’s we criticism on that if we had a normal GIC released by AIG and a supervision did not bail them out we could have been left with zero — a 100% loss. we also criticism that underneath a new DOL price avowal laws a word run was means to get an grant to explain 0% in fees for normal GIC’s.
I also vessel these products as not being authorised in normal tangible advantage pensions given they go totally opposite a pellet of diversification and place your resources out of your name and onto an word company’s change sheet.
The organisation for supervision worker 401(k) form plans, a National Association of Government Defined Contribution Administrators, or NAGDCA, combined a leaflet in Sep 2010 with a following characterization of normal GIC’s also famous as General Account fast value:
“Due to a fact that a devise unite does not possess a underlying investments, a portfolio holdings, performance, risk, and government fees are generally not disclosed. This boundary a ability of devise sponsors to review earnings with other SVFs. It also creates it scarcely unfit for devise sponsors to know a fees (which can be increasing but disclosure) paid by participants in these supports — a vicious member of a fiduciary’s responsibility”
A May 2010 WSJ article gives what we trust is a attention accord that ubiquitous comment is if not unethical, aged fashioned and backward.
«Amid a necessity of hang insurance, though, some firms are seizing an event to reintroduce comparison forms of stable-value products that are corroborated by a singular insurer and lift substantial risks. OneAmerica Financial Partners Inc.’s American United Life Insurance Co., for example, final month launched a stable-value product corroborated by a possess general-account assets. In such products, investors are holding on a risk that this singular issuer could go swell up.”
All of these risks together will a high undisclosed fees are a categorical reason we have suggested that a Consumer Financial Protection Bureau (CFPB)expand into this area given for a many partial a billions sole in word products in retirement products and annuities totally shun both SEC and DOL inspection altogether and are presumably usually regulated by state word commissioners.
In a meantime investors need to equivocate any investment product corroborated by one word company.
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