Re: Annuities...are they a crap shoot?

Every part of me hesitates to agitate this hornets nest, but I just
can't resist.

As Cal said (if I understood him correctly), the commission is not
deducted from the investors account. If $100k were the initial
investment, V's wife will see $100k show up in her account, not
$93,400. That said, I acknowledge there is no free lunch. The
commission is recouped via the expenses charged annually to the
account. Obviously without the commissions, the annual expenses could
be lowered. But all the same, the investor will not see that
commission directly deducted from the opening account balance as
implied here.

There are also no "loads" on variable annuity subaccounts in the sense
that some here lead us to believe. Even in variable annuities, one can
buy and sell subaccounts as often as they like without paying loads
(neither front-end or back) or incurring capital gains. [The exception
is that a trading fee is levied if one trades so frequently it
constitutes "day trading"]. The "load" and "no-load" status of
annuities are slang terms that refers to the surrender charge incurred
if the investors tries to surrender the annuity. Almost every major
annuity company offers both load and no-load annuities. Unlike mutual
fund loads, an investor does not pay a commission to buy or sell the
annuity subaccounts.

To be fair, this PacLife annuity may be totally worthless. I haven't
investigated, we don't know many details about the investors
situation, and frankly many VAs just plain suck. My comments were just
towards annuity misconceptions in general.

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