WP Stevenson & Companies

I have sold these in the past, and the old saying of “what doesn’t kill us will only make us stronger” comes to mind. I have a fairly big forehead, and I can remember the beads of sweat rolling off it while attempting to explain to a client where all their growth had gone. Needless to say, I DO NOT offer these products any longer.

These policies are absolutely LOADED with fees. Everything has a fee, from Advertising to Mortality and Expense to Management and even things I cannot think of.

A lot of Variable Annuities sold have what’s known of as an Enhanced Death Benefit rider. Please be aware of this feature because I’ll bet, oh say 100% of the people that I have met did not realize the Death Benefit is Taxable! Oh, and it’s not free either! For the expense of the rider, typically a term Life policy could have been written and the Death Benefit would have been income Tax Free!)

I have even seen Variable Annuities that offer say a 7% rate guarantee. What they typically don’t tell you is that you either must annuitize the contract in about 10-years (5-years longer than optimal) or they simply take an amount of money that you deposit and refund the principal back to you at a 7% rate over the next 14.2 years.

Here’s how it works. Your premium deposit is $100,000, and you are guaranteed 7% which means you will receive $7,000/year right? Right, you will! In fact, you will get $7,000 per year for the next 14.2 years. ($100,000 divided by $7,000 = 14.2 years) My question is what is the difference if I took my $100,000 and placed in my pillow case and simply took $7,000/yr out? Hey, not bad, and remember the fees? I wouldn’t have to pay them! Other than that, I like them.