Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It really pertains to fraud so the way i read it is the funds basically have unlimited if owned through your brokerage account. if the fraud is by a middleman broker then no excess coverage is given if that broker is still in business
You were wrong. Customers don't have unlimited coverage
No disagreement at all. We are just trying to figure out the wording. In fact if am wrong i would sooner go by his interpretation being in the business
But that is not what i see , it says only if they are held outside your brokerage account and held directly are you not covered .Mine are held within .
Or are they saying their funds are not covered at all and only security's are?
the question is how do ira's fit in if they are covered as funds?. I can always e- mail my rep for a full explaination
No disagreement at all. We are just trying to figure out the wording. In fact if am wrong i would sooner go by his interpretation being in the business
But that is not what i see , it says only if they are held outside your brokerage account and held directly are you not covered .Mine are held within .
Or are they saying their funds are not covered at all and only security's are?
the question is how do ira's fit in if they are covered as funds?. I can always e- mail my rep for a full explaination
The funds are covered if held in a fidelity brokerage account. If you hold shares directly in the fund the assets are owned by the fund and are not covered by sipc or the excess coverage
You are correct. I called them and the reason is this and it makes sense.
The brokerage account held funds like all security's in your brokerage account are held in street name not your name. They are just credited to your account.
when you buy directly just as when you buy stocks in your name the holdings are in your name.
Because things in your brokerage account are in street name they can be in theory stolen away from you since you are technically not the registered owner , the street name is.
The insurance protects you from them stealing your funds and security's since they are not held directly in your name
I believe insurance companies keep a good part of their money invested in the market, so how does a down market affect their ability to pay out on annuities?
Should there be a real market crash, would that make the annuities worthless too?
I will guess if the US eventually goes broke that annuities would also be worthless, am I correct?
I am considering as part of our investments, splitting up some funds to buy immediate annuities with Fidelity https://www.fidelity.com/annuities/i...uities/compare they sell New York Life, Mass Mutual RetireEase and The Guardian Guaranteed Income Annuity, all are rated A++ would it be wise to split up the money between two or all three of those or just go with one and if so which one would be best?
If there is a systemic failure of insurance companies then you have to assume that your state's guarantee fund will become tapped out. In that scenario, annuity guarantees are essentially not guaranteed. Some states like California have guarantee funds that only pay out 80% up to a certain dollar amount.
If you're terrified of a stock market crash then just do what the insurance companies do... invest heavily in bonds. Slow and consistent.
you can assume if your states guarantee fund went bust and all the insurers went bust and no one could absorb the client base that your portfolio would be worthless too as well as your pension .
it is rediculous thinking and even 2008 which was the greatest financial collapse since the great depression did not see one insurer default . even aig 's insurance end was just fine
Last edited by mathjak107; 02-18-2016 at 03:00 AM..
The question of solvency of financial institutions in general and insurance companies in particular during an economic downturn or an economic crisis is a good one.
Unlike most other sectors of the economy, financial institutions can be solvent on Monday and insolvent by Friday. Financial institutions are particularly vulnerable to runs caused by rumors and lack of confidence, and State actions.
Annuities are *not* riskless. Insurance company regulators work within their statutory authority to ensure Insurance companies' investments and liquidity are adequate. But do the state regulators do their job well? Are the laws and regulations sufficient to protect annuity purchasers? Beats me.
it is rediculous thinking and even 2008 which was the greatest financial collapse since the great depression did not see one insurer default . even aig 's insurance end was just fine
Regarding AIG, I just finished reading (well, listening to) former US Secretary of the Treasury Hank Paulson's book On the Brink: Inside the Race to Stop the Collapse of the Global Financial Systemhttp://www.amazon.com/On-Brink-Insid.../dp/B0051BNTI8 . He has a lot to say about AIG. It is a good, first person account. It is worth picking up a copy -- or, as I did -- checking the audio book download out from the public library.
aig has many different divisions all separate from each other . while aig needed a bail out for its gambling in the credit default swap market the insurance end was healthy and unscathed and needed no bail out .
Mr. Lee - it is nice to hear that you are doing some investigation into an immediate annuity as an investment vehicle prior to making a purchase. Do your home work before you commit. Also, speak with the Fidelity rep you are working with and ask about how that person is compensated for the 3 to 4 annuities that are being offered. it is one of the first questions I ask so I can get any conflict of interest issus out of the way.
You are likely looking at a SPIA (Single Premium Immediate Annuity) or something along those lines. Since these are not securities you are not going to have a prospectus to review so make sure you throughly read the client guide that should be provided prior to purchase. Most immedaite annuities are not as plain vanilla as they used to be. Some offer changes to the payout structure after a certain amount of years (e.g. increase or decrease the amount withdrawn each period). Some folks want a higher amount before Social Security kicks in, or they wait a few years to take social security so they need a higher amount from the annuity then reduce the amount later. Not all insurers may offer such options, but just be aware.
Read everything you can and understand what you are purchasing and what benefits you will receive.
As for market crashes, there will always be fluctuations, small and large, but the insruance industry is heavily regulated and there are reserve requirements that the insurance company must meet constantly. Every state the insurance company does business is checking the insurers RBC ratios and balance sheets to determine if they need to step in for any reason or inform the state where the primary business office is located. Also, read the annual report of the insurance company you are looking at. You will find that most insurance companies are very diversified and have holdings in real estate, investments and other general account assets that will support the payments under the annuity.
There is a lot more that could be said or confirm what has already been written in prior posts. But please, make sure you do your homework and understand everything BEFORE you purchase. Ask about access to your money if needed for an emergency (likely not available - but there could be some products with a commutation features available). Also, look at all of the differnt payout options available (life, life with period certain, joint life, etc.) and know the possible apyout amounts for each option that works for your situation.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
