Variable Annuities... Beware

Let me begin by stating right out, I am not a fan of variable annuities. Variable annuities are not what you may think they are or what a financial advisor is telling you they are. If you knew the way Variable Annuities really work you would  throw the financial advisor offering you this product out your front door. If you have a variable annuity you better listen up and ask me why I feel I was tricked and now stuck with a crippling no win investment. 

This insurance product was sold to me by a financial advisor, Insurance agent who used "verbal" deceptive sales tactics on me and many of my other family members. We put lots of our retirement savings into a variable annuity. More simply he lied about the way variable annuities really truly work. It is like a used car salesman selling you a car that is promised to take you to the moon and you will be lucky if you could have the car take you around the block. if you don't know the way Variable Annuities really work you would be interested to know the whole truth and nothing but the truth before you fall for the misleading sales pitch, like I did. This rep even told me he had all his money in the same product and when I asked him 6 years later, when I became wise to his lies, he refused to show me his contract. He had nerve to have his attorney send me a threatening letter saying that if I keep telling people that he lied to me, he was going to sue me for slander. Doesn't that beat all, the crooks stand behind the law and they don't keep the law themselves but they use the law to be able to carry out their deceptive sales practices. Isn't that like most crooks.

I am hoping there are many other good trusting folks out there who can contribute to my sad story by being brave enough to tell the way they too were sold a Variable Annuity by deceptive sales techniques as I was.

Let's start with I was promised 7% interest on my money, meaning in 10 years my money would double. Also, I was led to believe I was not in the stock market. My quarterly statements from the variable annuity insurance company did not show, let me repeat that, MY statements DID NOT SHOW on them that I was being charged 4% (Example: $4 x $100,000 = $4,000 per year) on my investment, and guess what other surprise there is, they get that 4% even though I am losing money. Where is the law when it comes to disclosure laws, where they are requested to make known the cost to us consumers on such financial legal documents. How the heck do they get away with this one, with government disclosure laws when it comes to financial regulations.

So, think about this, if you put $100,000 into a Variable Annuity you would pay about $40,000 in 10 years, just in fees, so as you can know it is pretty impossible to make any money, especially in today's poor market, when you are paying this much in fees. Are you starting to see my view point on just how deceiving this product is? 
 
On top of these extreme fees, the insurance company has you locked in for 10 a year period and if you want out they make you pay 9%+- a declining penalty fee, and if you want out because you are losing money like crazy because of their poor performing mutual fund investments, that they themselves created and developed (which in my opinion, I think performs poorlyy on purpose, it is part of their plan) so you have no choice but to leave your money with them, when all the while you are hoping and praying the contract value would go up some, so you can get out. They don't want you to get out because all they wanted in the first place was your money so you can pay them 4% each year. What kind of investment is this, we pay them 4% and they lose us money . I think when you invest your money, the company you invest with, is suppose to make you money, not the other way around, don't you?. Their shoiuld have been some kind od escape clause at the very least for us to get out. That is like you putting money in a bank and you have to pay them 4% interest. It just make no sense does it. Even as I type I can hardly believe my own words. I can see if they took a portion of any profits they made me, but no, they take my money because they have a prospectus, that no one like me can ever ever understand and since I was tricked by the sales person's deceptive sales techniques to believe that this product was the answer to low interest rates, today I am now pleading for help and I don't know where to turn for help.

Guess what else, you see, after 10 years you can not get your money you were promised as one lump sum, the 7%. Why you ask because the deceptive sales rep forgot to explain that you must take what the insurance company decides to pay you each year and if you die before say 75 years old you made not one penny of the promised 7% interest and actually you probably lost money, this is after 24 years of the insurance company having your money, that is, if you gave the friendly no good lying financial advisor your savings when you were 50 years old. You see if you gave him $100,000 after 10 years they are kind enough (This is sarcasm) to give you $10,000 for the next 10 years which is just you own $100,000 back that you originally gave them. BUT, depending on if this is taxable money and most times it is all taxable and not a long term capital gains tax (15%) but on your own tax bracket. Can you believe you will be taxed on your own original $100,000 that you get on your payout period the first 10 years. This is due to a changed somewhat recent tax law that states that when you draw money from an investment account that made any interest, you must first pay tax on the interest. So you are NOW paying tax on your OWN money for 10 years. So they got you coming and going. You are payingthem 4% and you can't get out without losing or paying a penalty and if you stay for the long haul you will lose on the tax end.

So, what about my heirs? Maybe if i die that would be good to get back some of my money. No,  If you die your loved ones will NOT get what the 7% fund is at that time, they will get what the contract value is or some other much lower value than the guaranteed 7% you were promised by guess who, that deceptive sales rep.

This rep keeps telling me that I am looking only at the downside, I said there is no upside.

The only way I can see in my opinion for anyone to win by owning this product is to live to be 90+- years old. Hence, they use the sales pitch, "Are you afraid you may out live your money?"

The insurance company who invented these variable annuities use actuary charts to determine the age which a typical male and female will die and that is, age 83+- for men and age 87+- for woman. if you are 60 now, you have about a 20% chance you will live to be that age. So you may ask yourself, why can such a product be permitted by the Security and Exchange Commission and so called reputable insurance companies even make such a product. The answer in my opinion is, their may be some extremely rich person out there, who has a few thousand to gamble that he or she may live to be 95+- or 110+- years old. The rich person can afford to try to beat the odds or gamble with extra money they have sitting around collecting dust but the more likely question is do YOU want to spin the old roulette wheel to gamble your hard earned money to see if you will live that long. Because if you die before age 90+-, you lose. The US government, in my opinion may go along with this because it gives people like me and you, who were deceived, an unrealistic idea that they are financially secure in their retirement years and this helps to take some of the pressure off the Social Security Commission. Plus the US government makes tons of money in taxes paid along the way.

if you are one of the poor hard working folks who are now trapped as I am because of unscrupulous sales tactics please we must speak out now. Don't be ashamed that you were stupid eneough to be cheated, like you should ahve have known better. This is one of the reasons these cheats get away with this, it is like blaming your self for being robbed because you should have know better. I talked with 4 CPA's and asked them if they invested in Variable Annuities and they said that they did not because the said they are to complicated and they did not understand the way they work. it took me over a year of researching the way variable annuities really work and talking with other professional financial professionals to discover that I was deceived.

The only way we can win against these crooks is to join together. Please help me and we will help each other, I hope. this is no different than having a thief walk into your home and steal your life savings but it is done right out in the open with the US government letting it happen. Are insurance companies really that powerful as I was told or do we have the right to know we are protected by Consumer Protection Laws. Why is the Security Exchange Commission letting this go on? Susan Orman is 100% totally against variable annuities, so why is she not spreading the word to more folks. Is she fearful of these powerful insurance companies and maybe even the government. I would actually be very very happy to hear the answer from her own mouth.