Pitting an insurance salesman and my SIL

The BBQ Pit
1

This is relatively mild, as pittings go, and my apologies for my first Pit thread being long and mild.

A certain insurance salesman deserves to rot in all the postulated hells sequentially. My SIL can visit him on occasion.

Some background is in order. Back in April, our brother-in-law was murdered in his home. His widow, Hubby’s sister (aka SIL), has been since then understandably upset and is still grieving. I doubt she’ll be done grieving until the murderer’s trial is over; it’s scheduled to start in January.

Hubby was named executor of BIL’s will, and he and I have been helping SIL through the various steps of probate and so on. I should further add that BIL left SIL in a financial bloody MESS, but that’s the subject of another rant. Since Hubby and I are the only ones in the family whose finances are in order (no unsecured debt; substantial retirement savings for our age, and so on), we’ve been helping her sort out the financial mess, too. Including taking her to meet with our financial advisor, who set out a reasonable plan for SIL’s life insurance proceeds and future savings toward retirement. (SIL is 54 and has no retirement savings.)

Hubby and I were under the impression that she was going to invest with that advisor and perhaps invest a portion of the money with her FRIEND, G, who has been an insurance salesman for decades. (SIL, being single and childless, and already in possession of a $250k term life insurance policy has no need of other life insurance, but we do understand that friendship matters to her, and figured that her giving a portion of the money to G wouldn’t be a problem in the long term.)

Fast forward to this past weekend, when we had breakfast with SIL, and she said she’d given G ALL of her money, and G had put it into some kind of annuity, and SIL had already gotten $13k in sign-on bonuses, so she’s already making good money, and of course G has her best interests at heart, because they’ve been friends for 30 years. Hubby’s and my initial reaction was, “Depending on the kind of annuity, that could be good or it could be bad.”

It was worse than I’d thought. Not only did her FRIEND sell her a whole life policy (in an amount substantially more than the $250k term policy she already has), he also sold her the Allianz MasterDex 10 Equity-Indexed Annuity. Between those two sales, G likely made $15k in commissions.

I’m going to skip over just exactly how bad that particular EIA is (other than to say it is the subject of an ongoing lawsuit which has just been certified as class action), and just note that our advisor told me that his legal department won’t LET them sell EIAs because they are at the least unethical, if not fraudulent.

Hubby called SIL Sunday evening to say that he thought this product is a bad idea, and Hubby and SIL are meeting with G today to get SIL out of these two products (thankfully, she is still within the free look period and can get out without, in theory, much trouble).

So, G. I met you once, briefly, after BIL was killed. You seemed like a nice man, but now I know that whatever pretensions you may have made to be SIL’s FRIEND were false. No FRIEND would have sold a policy THAT egregious, THAT bad, to a grieving widow. No FRIEND would have sold a whole life policy to a woman who is already sufficiently insured.

You are, at best, an ignorant and arrogant ass. You knew or should have known that the specific product is the subject of a lawsuit and that the general class of annuities it belongs to is of, shall we say, questionable appropriateness. You damn near cost my SIL her chances at retirement, and likely would have if she hadn’t asked Hubby and me to look over what you sold her. Hubby said he’s going to try to be pleasant and civil to you at the meeting this afternoon, but that if it becomes necessary, he’ll be very unpleasant and uncivil. Be thankful, you money-grubbing, commission-seeking dipshit, that you’re dealing with Hubby and not me.

At worst, you are a liar, a cheat, and a thief. Oh, wait, you’re an insurance salesman. Perhaps not entirely the same species, but certainly capable of interbreeding with same. At worst, you KNOWINGLY led someone whom you’ve known for 30 years and who considered you a FRIEND, into so-called investments that are entirely inappropriate for her circumstances just to get a huge commission.

Oh, and SIL, I have to moderately pit you, as well. I confess I don’t understand people who, like you, don’t want to be bothered with thinking about your finances, but since there are so many, I can’t pit you for that. I DO, however, pit you for completely ignoring all the financial documents I and Hubby have shown you over the years that demonstrate how well we’re doing. I pit you for trusting some SALESMAN over your own blood family. I pit you for the insult to Hubby’s judgment (and, indirectly mine, but that’s less offensive to me), and I pit you for signing the fucking documents BEFORE you asked Hubby and me to look them over.

2

I would advocate some patience here.

When my wife died, I just couldn’t deal with money issues, so I left things alone for several years. In retrospect, it would have been smarter to have been doing some careful investing in index funds over that time rather than leaving money in low interest accounts. However, I dealt with it when I was able. She will eventually be able to do the same. It is six months since she lost her husband. You and your husband are past it, but recognize that she is not and will not be for some time. It is good that you are looking after her.

Instead, save some of that for the lawyer. Does your state have an Insurance Commissioner? Consider looking up the regulating authority, and bringing this up to their attention.

3

Granted, the death of a spouse, especially by murder, is a traumatic event. But SIL is 54 and has zero retirement savings. The death of her husband was only in April. She clearly never gave any thought to the matter, ever. Sounds like her husband was no financial whiz, either.

4

This is a persistent problem and a crying shame. Research on Equity Index Annuities and many of the living benefit annuity products show that they very rarely benefit the client, while creating huge profit and comission for the firm that sells them.

The sad thing is, her ‘friend’ may have actually believed that he was doing the right thing for SIL. Imagine a guy who writes life insurance policies is introduced to the idea of the equity index annuity, without the securities licenses or background to evaluate the product in comparison with other investments. Many of these people believe in this product they are selling because they are too intellectually lazy to educate themselves before selling to the client.

That is why it is a terrible dereliction of duty that one doesn’t have to have a securities license to sell an equity indexed annuity. You have people with no investment background pushing an investment product of mind-numbing complexity. Excellent rant, and I completely sympathize. I really hope your SIL takes advantage of the free look provision and cancels the deal. I didn’t even get into the whole life sale, which is clearly unsuitable, likely could be legally challenged and the agent could hardly claim ignorance in that case.

5

Got it in one. I could do a whole OTHER pitting on SIL’s husband and the financial mess he left her.

6

Good rant, kurilla, and a well-deserved one too.

I was afraid the rant was going to come out weak because when I read this line:

My thought was, in the spirit of Douglas Adams, “What do you mean, ‘what for?’”

Anyhow, it’s situations like these that show school doesn’t teach kids how to be adults. We need classes (in 7th, 9th, and 11th grades) in home economics - NOT cooking & sewing, instead the economics / money / business / effort in running a household. These days, it should include budgets, taxation, retirement savings, how to spot and resist a scam, what questions to ask vital experts (financial advisors, insurance sellers, doctors, etc), basic Internet safety, and so forth.

Good luck with your SIL’s situation.

7

I worked as a salesman for 3 years and starved. The industry has structured itself over the last 100 years so that only the “money-grubbing, commission-seeking dipshits, liars, cheats and thieves” can make a living in this field.

I’m convinced that most people go into the business to make an honest living and get forced into this kind of behavior to survive.

Yeah, your SIL is a nitwit. Lot of them around. She’s lucky to have you.

8

You piqued my interest in EIAs, so rather than hijack this thread I’ve started a new one over in GQ. Any wisdom you have to share would be most welcome.

9

That’s a mighty broad brush you’ve got there. I’m sorry to hear about your SIL’s situation, but just because of this dickhead you can’t say that all insurance people are crooks.

10

I wouldn’t slam EIAs just because you don’t know how they work. Allianz received less than .1% complaints about them (which means 99.9% of customers were satisfied with them). The product itself isn’t unethical, selling it to an 80 year-old who needs access to their retirement money is (that .1%).
For your SIL who is 54 and needs secure retirement money (that she likely won’t need for 10 years) an EIA is a secure investment guaranteed not to lose money.

11

Don’t take it personal, Ginger. My SIL is a lawyer and a decent person despite that fact. Weirddave is one of the good guys, even if he does work in insurance. :wink:

12

So is an FDIC-backed certificate of deposit or a Federal Treasury bond, and neither of those requires you to set fire to 5% of your money before you start. CDs are backed by the FDIC at up to $100,000, so even if you have to spread your money around in several accounts, you can still be risk-free and earn a reasonable rate of return.

13

Hampshire, I would be interested in hearing your critique of my criticisms of EIAs posted in the GQ thread. I also find the complain rate highly misleading for a number of reasons. First, only written complaints are registered as complaints. Second, EIAs are a new product and haven’t been on the market long enough to accurately judge client satisfaction. Third, one of the biggest problems with EIAs is their illiquidity as compared to a portfolio of 60% Treasuries and 40% in an equity index fund.

The kicker of course is that an investment in the Treasury/Index mix outperforms the EIA over a ten year period 96.9% of the time, with full liquidity during that time frame.

14

I wouldn’t say that an n% complaint rate means a 100-n% satisfaction rate. Lots of people don’t complain, either because they don’t think they’ll get anything out of it, or because they blame themselves for making the mistake. I’ve made less-than-optimal investments in the past (and I don’t just mean in retrospect based on performance. I mean I misunderstood what I was doing at the time), but it never occurred to me to complain. What good would that do? I read the details and thought I was doing the right thing. I just chalk it up as a learning experience and move on.

15

Back to the meat of the matter:

kurilla, did you and your husband manage to get SIL out of the transaction?

16

As far as we know, yes. SIL has requested her money back from the guy, but that typically takes 2-3 weeks, so we don’t expect to see it until next week at the earliest.

The policies have a 20-day “free look” period, and we were within the deadline on all of them, so IN THEORY, there should be no trouble getting her money back. If there is, well… watch this space. Heh.