Jefferson National variable annuity

Jefferson National has come out with a new variable annuity product without
the normal high insurance costs. The charge is $20/month. This is much less
than the usual 1.5% charged by most others. It is a plain Jane annuity
without many of the guarantees that come with other products. It is aimed at
people who self-direct the investments, and they as usual, grow tax
deferred.

So, if you want a cheap alternative, you might look at it. I am moving mine
to Monument Advisor, but have no other vested interest in this company.



It appears to be a highly popular new idea in variable annuities.... If you
put in $100k, at most other variable annuities, it will cost you
$1,500/year (1/5%).. with this product, it will cost you $240/year...... be
sure to
check out all the specs. They have many Rydex funds which can be traded as
often as you want. The rest of the funds have a 7 day hold. I believe they
have over 100 fund choices.

abc132

Re: Jefferson National variable annuity

abc132 wrote:
>
> Jefferson National has come out with a new variable annuity product
> without the normal high insurance costs. The charge is $20/month. This
> is much less than the usual 1.5% charged by most others. It is a plain
> Jane annuity without many of the guarantees that come with other
> products.

Looks interesting, but it might not be available to the OP. The
prospectus (p.12) notes that Jefferson National sells life insurance
(annuities are insurance products) in 49 states + DC. When an insurance
company excludes one state, it is always New York (the OP's state of
residence).

--
Mark Freeland

Re: Jefferson National variable annuity

I've checked with them and have sent in my app. I agree about the NY thing.
Also, this is not for everyone so should be checked out very carefully. The
expenses that are eliminated are mainly insurance expenses and some might
want them. This annuity only gives the account value to beneficiaries.

abc132


"Mark Freeland" <> wrote in message
news:
> abc132 wrote:
>>
>> Jefferson National has come out with a new variable annuity product
>> without the normal high insurance costs. The charge is $20/month. This
>> is much less than the usual 1.5% charged by most others. It is a plain
>> Jane annuity without many of the guarantees that come with other
>> products.
>
> Looks interesting, but it might not be available to the OP. The
> prospectus (p.12) notes that Jefferson National sells life insurance
> (annuities are insurance products) in 49 states + DC. When an insurance
> company excludes one state, it is always New York (the OP's state of
> residence).
>
> --
> Mark Freeland
>

Re: Jefferson National variable annuity

abc132 wrote:
>
> Jefferson National has come out with a new variable annuity product
> without the normal high insurance costs. [...] It is aimed at
> people who self-direct the investments, and they as usual, grow tax
> deferred.
>
> So, if you want a cheap alternative, you might look at it. I am moving
> mine to Monument Advisor, but have no other vested interest in this
> company.
>
I didn't see anything on their site that suggested that DIY's could
invest directly, and this news article seems to confirm that:


"For do-it-yourself investors, variable annuities from Fidelity and
Vanguard (www.fidelity.com and www.vanguard.com) are still likely the
lowest-cost choices. You can buy the Monument Advisor annuity only
through fee-based financial advisers."

Are you working with an adviser, or can one purchase this annuity
directly?

> ...... be sure to check out all the specs. They have many Rydex funds
> which can be traded as often as you want. The rest of the funds have
> a 7 day hold. I believe they have over 100 fund choices.

I was curious about their including Rydex, since they had already gotten
into trouble over market timing (and have been required by the SEC to
undergo periodic compliance review as a result).


(Note that the Monument annuity cited by the SEC is not the same
Monument Advisor annuity you are investing in, but it is the same
insurance company.)

My mentioning the SEC action is not intended to disparage this
particular product. I still feel it is worth investigating (which is
what I'm doing). The news article I cited speaks highly of it.
--
Mark Freeland

Re: Jefferson National variable annuity

On 2006-01-29, Mark Freeland <> wrote:
> When an insurance
> company excludes one state, it is always New York (the OP's state of
> residence).

Why is that?

Re: Jefferson National variable annuity

During my several phone queries I asked a lot of questions. My last phone
call was a line-by-line review of the forms. On one line, in a blank spot
(as opposed to a legitimate blank space), I was told to write in "direct
invest", meaning it would be self-directed, without an advisor. There was an
area for 'financial advisor' to be specified, but that was left blank.

My $$ will be held at the funds I invest in, not at the annuity company....
if they go belly up, which I am not anticipating, my $$ should still be
secure.

abc132

"Mark Freeland" <> wrote in message
news:
> abc132 wrote:
>>
>> Jefferson National has come out with a new variable annuity product
>> without the normal high insurance costs. [...] It is aimed at
>> people who self-direct the investments, and they as usual, grow tax
>> deferred.
>>
>> So, if you want a cheap alternative, you might look at it. I am moving
>> mine to Monument Advisor, but have no other vested interest in this
>> company.
>>
> I didn't see anything on their site that suggested that DIY's could
> invest directly, and this news article seems to confirm that:
>
>
> "For do-it-yourself investors, variable annuities from Fidelity and
> Vanguard (www.fidelity.com and www.vanguard.com) are still likely the
> lowest-cost choices. You can buy the Monument Advisor annuity only
> through fee-based financial advisers."
>
> Are you working with an adviser, or can one purchase this annuity
> directly?
>
>> ...... be sure to check out all the specs. They have many Rydex funds
>> which can be traded as often as you want. The rest of the funds have
>> a 7 day hold. I believe they have over 100 fund choices.
>
> I was curious about their including Rydex, since they had already gotten
> into trouble over market timing (and have been required by the SEC to
> undergo periodic compliance review as a result).
>
>
> (Note that the Monument annuity cited by the SEC is not the same
> Monument Advisor annuity you are investing in, but it is the same
> insurance company.)
>
> My mentioning the SEC action is not intended to disparage this
> particular product. I still feel it is worth investigating (which is
> what I'm doing). The news article I cited speaks highly of it.
> --
> Mark Freeland
>

Re: Jefferson National variable annuity

For some reason, NY has always been about the most strict regarding
insurance. I used to work in that industry, and we always had to take pains
to be sure NY was satisfied... kind of a 'as NY goes, so goes the nation'.

abc132


"Greg Hennessy" <> wrote in message
news:
> On 2006-01-29, Mark Freeland <> wrote:
>> When an insurance
>> company excludes one state, it is always New York (the OP's state of
>> residence).
>
> Why is that?
>
>

Re: Jefferson National variable annuity

Greg Hennessy wrote:
>
> On 2006-01-29, Mark Freeland <> wrote:
> > When an insurance
> > company excludes one state, it is always New York (the OP's state of
> > residence).
>
> Why is that?

New York has more stringent regulations than the other 49 states, and
rather than subject themselves to those regulations generally, insurance
companies set up separate subsidiaries to operate in New York.

At one time, I was told by a CPA who had been a comptroller at New York
insurance companies what those regulations were, but I no longer
remember exactly what they were.

"The rationale for setting up a separate entity to market and service
the company's products in New York, Kryshak says, stems from the rigors
of state-insurance requirements. 'Basically, to sell an insurance
product in New York, you have two choices: Either you package and sell
your products nationwide the way you do in New York state or you set up
a separate entity and adjust the products to conform to New York's laws.
We chose to set up a separate company because following New York's rules
in some other markets can put your products at a competitive
disadvantage,'"



My vague recollection is that it has something to do with funding
regulations (consistent with my understanding that the NYS regulations
keep insurance companies more sound). This seems to support that
understanding:

"For many years companies have formed New York subsidiaries to do
business in that state. Subsidiaries can be used to avoid states with
onerous reserve requirements for a particular type of product and there
are some miscellaneous tax benefits in the way of reduced premium tax on
domiciled companies that can be an additional motivation."
(p.3)
--
Mark Freeland

Re: Jefferson National variable annuity

"abc132" <> wrote in message
news:yF7Df.5790$
> I've checked with them and have sent in my app. I agree about the NY
> thing. Also, this is not for everyone so should be checked out very
> carefully.

From my experience, annuities are only beneficial if you've already maxed
out on your 401(k) and IRA contributions, and make six figures.

D

Re: Jefferson National variable annuity

And what are the commissions that you will be paying? My friend sold a
variable annuity to a 76 yr. old widow and pocketed a $30,000 commission up
front plus a trailing commission of $5,000 per year as long as the widow
owns the account. All those commissions come out of the old girl's nest
egg.

abc132 <> wrote in message
news:rcbDf.5986$
> During my several phone queries I asked a lot of questions. My last phone
> call was a line-by-line review of the forms. On one line, in a blank spot
> (as opposed to a legitimate blank space), I was told to write in "direct
> invest", meaning it would be self-directed, without an advisor. There was
an
> area for 'financial advisor' to be specified, but that was left blank.
>
> My $$ will be held at the funds I invest in, not at the annuity
company....
> if they go belly up, which I am not anticipating, my $$ should still be
> secure.
>
> abc132
>
> "Mark Freeland" <> wrote in message
> news:
> > abc132 wrote:
> >>
> >> Jefferson National has come out with a new variable annuity product
> >> without the normal high insurance costs. [...] It is aimed at
> >> people who self-direct the investments, and they as usual, grow tax
> >> deferred.
> >>
> >> So, if you want a cheap alternative, you might look at it. I am moving
> >> mine to Monument Advisor, but have no other vested interest in this
> >> company.
> >>
> > I didn't see anything on their site that suggested that DIY's could
> > invest directly, and this news article seems to confirm that:
> >

olumn?coll=sfla-business-col
> >
> > "For do-it-yourself investors, variable annuities from Fidelity and
> > Vanguard (www.fidelity.com and www.vanguard.com) are still likely the
> > lowest-cost choices. You can buy the Monument Advisor annuity only
> > through fee-based financial advisers."
> >
> > Are you working with an adviser, or can one purchase this annuity
> > directly?
> >
> >> ...... be sure to check out all the specs. They have many Rydex funds
> >> which can be traded as often as you want. The rest of the funds have
> >> a 7 day hold. I believe they have over 100 fund choices.
> >
> > I was curious about their including Rydex, since they had already gotten
> > into trouble over market timing (and have been required by the SEC to
> > undergo periodic compliance review as a result).
> >
> >
> > (Note that the Monument annuity cited by the SEC is not the same
> > Monument Advisor annuity you are investing in, but it is the same
> > insurance company.)
> >
> > My mentioning the SEC action is not intended to disparage this
> > particular product. I still feel it is worth investigating (which is
> > what I'm doing). The news article I cited speaks highly of it.
> > --
> > Mark Freeland
> >
>
>

Re: Jefferson National variable annuity

No matter what you invest in, it is easy to be taken advantage of, and many
willingly hand over a lot of money that way. Most funds sold by advisors
charge a load of 5%+/-. And it is up to the investor to look into the up
front cost and the annual expenses. Unfortunately, most investors learn the
hard way. As far as J/N, they seem to be attracting a lot of attention with
this new product. There is the $240/yr cost (instead of the usual 1.5%
annual fee). They do this by eliminating some of the insurance benefits.

All funds kick back money to people who sell their products, whether it is a
load on the fund, some of which goes to the 'advisor', or money that goes to
the broker..... It is included in the 'expense' the fund reports each year.
It is a "I'll sell your fund if you give me some money to do it" thing.

Your friend is a legalized blood sucker. I'm sure he drives a very nice
car....... the other side of the coin is, how much did she invest, and how
well is she doing? If it was a million dollars and she is getting 10% on
her money, she might be very happy. We need the whole story.

abc132


"Marlowe @earthlink.net>" <marlowedc<NYET> wrote in message
news:gDYDf.4007$
> And what are the commissions that you will be paying? My friend sold a
> variable annuity to a 76 yr. old widow and pocketed a $30,000 commission
> up
> front plus a trailing commission of $5,000 per year as long as the widow
> owns the account. All those commissions come out of the old girl's nest
> egg.
>

Re: Jefferson National variable annuity

"abc132" <
>
No matter what you invest in, it is easy to be taken advantage of, and many
> willingly hand over a lot of money that way. it is a load on the fund,
> some of which goes to the 'advisor', or money that goes to the broker.....
> It is included in the 'expense' the fund reports each year. It is a "I'll
> sell your fund if you give me some money to do it" thing.
>
> Your friend is a legalized blood sucker. I'm sure he drives a very nice
> car.......

You hear about the big fish in the Enron type prosecutions and such, but the
time has come to go after the lesser blood suckers, who suck more blood
because of their far greater numbers.

Re: Jefferson National variable annuity

"Marlowe @earthlink.net>" <marlowedc<NYET> wrote in message
news:gDYDf.4007$
> And what are the commissions that you will be paying? My friend sold a
> variable annuity to a 76 yr. old widow and pocketed a $30,000 commission
> up
> front plus a trailing commission of $5,000 per year as long as the widow
> owns the account. All those commissions come out of the old girl's nest
> egg.
>

SNIPPED

What annuity company was that? I do a good bit of annuity work and every
annuity company I'm familiar with pays the agent out of their funds, not the
client's investment.

Gene E. Utterback, EA, RFC