Whether it be the insurance or securities industry, they both are very highly regulated. If someone does not have a license, there is no repercussion for them (say and do what they want). Look up a person’s license, which most people don’t. Why wouldn’t you?
With the new Obamacare plans, there is now a new and different way to get over on someone. It’s your projected income and the key word is projected. The subsidy amount, is the amount that the government will pay towards a person’s premium on a monthly basis, going off projected income.
When a person files taxes is when they and the government will square up. If they over estimated their income,then they will receive money back. And, if they underestimated their income, then they’ll be owing money.
There are plenty of people wanting to make their commission, making up the projected income to give the client a “free” plan. Many times they will choose an expensive plan (more premium, more commission).
Example – a person qualifies for a $100 month subsidy, but gets a $500 month subsidy instead. So, after the year is over that person owes $4,800. We’ve had plenty of people not go with us for insurance, because we actually informed them what they really qualified for. But the other guy said it was “free”.
All Medicare supplement plans are exactly the same for every insurance company, which makes it easy. So, simply shop for the lowest premium. Keep in mind, all the insurance companies are capable and able to pay claims.
A person may choose a company that its name is not well recognized (which is fine and common). Then an agent comes along and states that the company doesn’t pay on claims, just to get the sale (commission). This is pretty much it for scenarios for Medicare Supplements.
Misrepresenting a bonus is the very common. Currently the best bonus is at 6% (free money). The full 6% bonus is credited to your account from day one. So, the 6% is also accruing interest.
Example: a plan that gives a 10% bonus. The bonus is spread out giving a 1% bonus each year. So, it’s a far cry from actually being a full 10%.
Example: a plan that gives a 20% or a high % bonus. This is not a cash bonus like you may assume. It is part of the calculation used to get income for life.
Income Example: $100,000 annuity at 5% is $5,000 annual income for life.
Adding the 20% bonus is $6,000 annual income for life.
For the most part, you will be dealing with experienced and knowledgeable agents.But, you should be dealing with a broker not agent, as an agent will have a handful of companies to choose a plan from. Whereas, a broker will have much more to choose from.
In the annuity industry, it’s common practice for an agent to come out and meet with the client, which is fine. But, what’s more important is to know what the agent has to choose from then what he is offering. The reason is, everyone has their specific needs and is the plan being presented actually the best one for you?
So, take it slow and get informed how annuities work and their features before making a decision. Keep in mind, you’ll like whoever comes out to your home, after all this is what they do all the time.Before they come out, take a look at their website and see what they have to offer. Are they coming to your home with just a couple of brochures? Do they work out of their home?
These days more and more people prefer not having someone come out to their home, as it puts unwanted pressure on feeling obligated to make a purchase.