The Allianz Masterdex 10. A reader shares a heart-breaking story of the real-life danger of pouring money into a hyped annuity without knowing how they really work continues to cost people thousands of dollars and result in heartbreaking stories.
As an investments management advisor and president of Common Sense Advisors, I receive frequent emails from retirees and their relatives lamenting their decision to put their life’s savings into one annuity or another.
I have made it a bit of a personal crusade to warn consumers about annuity stipulations that can cost them all of their bonuses and interest if they choose to withdraw early from them.
My book on the subject has drawn wide praise, and my free special report on a particular annuity, the Allianz Masterdex 10®, has proven helpful to many.
I had passed this synopsis of a recent email that I received thanking me for my report on the dangers of the Allianz Masterdex 10®. Here’s the story in a nutshell, with direct quotes from the very dissatisfied daughter of an investor in this annuity:
“My parents went to a free seminar in 2006 and gave $8,400 for an Allianz Masterdex 10®. They were 85 years old and not stupid people, but they fell for the free lunch and nice salesman. My mother has since passed away and my Dad, now 92, would like to start drawing $250/month – 7.5 years after giving Allianz $8,400 and selecting the S&P as the index.”
“When I met with the salesman in 2008, he told us that after five years my Dad could start drawing a monthly income based on six options. He never said if this was done he would forfeit the 10% bonus and interest added each year. He made it sound as if he waited five years; neither of those was at risk.”
“The nice salesman is long gone and the Minneapolis office said it will put my request to speak personally with a new salesman out to their regional office and MAYBE someone will contact us. Who would want to help us now? They are not going to get any more money from us, so it would be a waste of their time – I see right through this.”
“From reading your article, it sounds like he will not receive the full ‘annuitization value’ of $12,290.05 as shown on the annual statement, but probably (hopefully at least), the original $8,400. This should be criminal! Thank you for your article, I hope it helps me as we try to figure out now what is the best course of action. I am just so glad it was only $8400 and not $100,000 or more!”
My comment on this case: “Once again, seemingly dream returns fooled a naïve investor, and he will be lucky to recoup his original investment. It’s high time that annuity salesmen explain their product more clearly—or that investors avoid them altogether.”
“Allianz has finally discontinued this particular annuity but it shouldn’t have been allowed to exist in the first place. Technically, Allianz and other annuity insurance companies don’t do anything wrong because they disclose the details of how the annuity works in the reams of paperwork you get with the annuity. But few consumers ever read those disclosures and those that do are likely to still come away not understanding how it works.”
“There are better options out there than investing in an annuity that allow the consumer to change their mind without losing a fortune while still being able to sleep at night. I’m sure this daughter and her father would agree!”.