MetShield Annuity

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The Daughter
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MetShield Annuity

Post by The Daughter » Mon Sep 19, 2016 6:57 pm

Has anyone had experience with MetShield?
"MetLife Shield Level SelectorSM Annuity is an individual single premium deferred index-linked annuity contract..."

This is one of the choices my CPA thinks I should consider. I have all the supporting documentation, but I glaze over when I look at all the pages. Purchasers may "shield" a percent of negative market performance(I may not be using the right terms) in return for a reduced return.

I cannot explain further because I don't have enough understanding. I seek someone who is knowledgeable who can tell me to run or to check into it further.

Thanks.

Stonebr
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Re: MetShield Annuity

Post by Stonebr » Mon Sep 19, 2016 7:10 pm

Run. These are expensive, gimmicky products that are sold on commission basis, not bought by rational investors.

Here's a Boglehead wiki page on products like this...

https://www.bogleheads.org/wiki/Equity-indexed_annuity

The very fact that your eyes glaze over on reading the prospectus for this product is a warning flag. This is part of the product design -- they don't want you to read the fine print, so they give you page after page of it.

Quote from the wiki page:

Equity-indexed annuities are strongly not recommended for most investors. Interest paid by EIAs is not calculated with the usual formulas for calculating interest. EIA interest crediting methods are complex and have several moving parts. This makes it impossible to know at the time of purchase, how much interest, if any, you will get from the annuity. The surrender fees can have a significant impact. Please ask in the forum for advice.
"have more than thou showest, | speak less than thou knowest" -- The Fool in King Lear

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investorguy1
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Re: MetShield Annuity

Post by investorguy1 » Mon Sep 19, 2016 7:25 pm

The Daughter wrote:Has anyone had experience with MetShield?
"MetLife Shield Level SelectorSM Annuity is an individual single premium deferred index-linked annuity contract..."

This is one of the choices my CPA thinks I should consider. I have all the supporting documentation, but I glaze over when I look at all the pages. Purchasers may "shield" a percent of negative market performance(I may not be using the right terms) in return for a reduced return.

I cannot explain further because I don't have enough understanding. I seek someone who is knowledgeable who can tell me to run or to check into it further.

Thanks.
The long and short is stay far away.

There are many insurance companies who come out with many different annuity products every year. it is very hard for any financial advisor to keep track of all the products all the time. They come with different fancy names and fancy guarantees. They are all very complicated and pretty much impossible for the average person to figure out if they are worth while. The insurance company has figured out how to package a product that sounds better than it is (this point I think is very important to understand). This way they can sell it and make a profit. The insurance company will make money off of you, if they didn't they would go bankrupt. You are better off owning the insurance company through their stock than giving them your money and buying their product (or else the owners of the insurance co must be pretty dumb to own stocks instead of their super duper unstoppable annuity 6.0). Tell me how is it possible that you make money, the insurance company makes money, the sales man makes money (including free trips to exotic destinations for selling lots of stuff and stake dinners with the wholesaler) and you get lower risk on top of that? It is a fantasy that is a ridiculous joke. Here is the general rule. Insurance is not appropriate for protecting against investment risk.

Your CPA may be a nice guy but he is biased in that he will get a big fat check of $1000s for selling you this therefore he is biased in this matter and his opinion is useless. It is like having a judge for a case who will get paid more if one side wins over the other.

1. If you want to lower risk reduce equities in your portfolio.

2. When a low cost annuity may be ok? If you are getting ready to retire, are in good health and have longevity in your family a low cost annuity as longevity insurance might be a good idea. That would also be only once you have decided to delay taking social security till 70. You could get this type of annuity through vanguard there are also website you could search for quotes like immediateannuities.com.

One more important point.You think you are confused about it now? 10 years down the road from now you will wonder what to do with it. You won't remember anything about how it works. Your advisor if he is around in the business also won't remember because he would have sold 20 different types of other "newer and better" annuities with longer and fancier names since than. You may call the insurance company who was bought over by another company and than another and try and figure out what is going on. Good luck with that.
Last edited by investorguy1 on Mon Sep 19, 2016 9:45 pm, edited 1 time in total.

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Mel Lindauer
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Re: MetShield Annuity

Post by Mel Lindauer » Mon Sep 19, 2016 8:24 pm

Here's a link to a Forbes column I did on these awful things back in 2010. Run, don't walk. As was peviously stated, your CPA is recommending this because he/she is going to earn a big fat commission. The CPA obviously does no have your best interest at heart. I'd suggest you consider getting a new CPA.

http://www.forbes.com/2010/08/10/truth- ... dauer.html
Best Regards - Mel | | Semper Fi

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mephistophles
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Re: MetShield Annuity

Post by mephistophles » Tue Sep 20, 2016 12:41 am

Agree with advice. That said, IMHO it is a conflict of interst for a CPA to also sell or recommend a commission based insurance product, or any investment for that matter. They already charge you fees for their time advising and doing work for you. Suggest you find a new CPA who doesn't sell or share in commissions or finders fees for selling insurance products.
ole meph

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Bogle_Feet
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Re: MetShield Annuity

Post by Bogle_Feet » Tue Sep 20, 2016 3:23 am

Stop working with this CPA who doesn't care about you and your interests. It's his job to do your taxes -- not sell you financial products. Did you know that index annuities pay the guys who sell them on average a hefty 7% - 10% back door commission? Sounds like this CPA is ALSO a licensed insurance salesman or he has a friend who he wants to refer you to and then they split the commission. That commission comes indirectly from YOU! It's not money that is created out of thin air.
Index annuities are straight up garbage. http://www.investingadvicewatchdog.com/ ... nuity.html

You should be investing in stock and bond index funds. Investing is simple and easy -- not complicated and CERTAINLY should never involve a contract.

The Daughter
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Re: MetShield Annuity

Post by The Daughter » Tue Sep 20, 2016 6:14 pm

I am so naive about finance. Thank you for your heartfelt opinions. I think I am cured of the idea that I might need an annuity like this, which was touted as "longevity" insurance.

I've delayed SS until I'm 70, my pension has a 3% COLA, and I have funds available for investment. I guess I'll go the investment route and investigate the easier to understand SPIA in a couple of years when I see if my health continues to look promising.

You Bogleheads are the best!!

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