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Archive for April 1st, 2011

Today I should have been rich beyong my wildest dreams…………..hmmmm!!!

25 years ago when I was young and still quite stupid about most things, especially money, I had a meeting with an Insurance Salesman.

He sold me a Retirement Annuity Policy based on the big dream of how in 25 years time I would have enough money to buy a house and a car with what he ‘projected’ would be the maturity value, as well as the ‘massively’ large amount of money that I would get each month on retirement! At that stage my plan was to retire at 55!

He suggested that a 25year retirement annuity would be just the ticket and so I signed on the dotted line.

Of course history has now shown us that the only people/persons who benefitted from a 25 year annuity was the ‘Salesman’ and probably the company he worked for.  I have duly paid in my subs each month for 25 years and lo and behold the 25 years is now up and what do we find…………….?

a) the value of the payout is 56% LESS than he projected.

b) the monthly payout/dividend is less than what I earn in a day in the UK and is by no means even enough to buy a week’s worth of groceries in South Africa in today’s currency.

c) I am now ‘forced’ by legislation (which has changed since I took out the policy), to re-invest the money with the Insurance Company and for this ‘priviledge’ they will deduct a certain amount from the monthly payments, aka the money I have invested.  So I am paying to get my money back!

d) they also want me to take out an inflation policy (again deducted from my payments) to keep up with inflation.  Well HELLO!!! I did that when I took out the policy……..and it has in no way kept up with inflation!

e) 2/3 of the policy value stays with them and the 1/3 that I get out as the initial payment is 8.75% less than what I have paid in over the 25 years.  I would have been better off putting the money in a long-term savings account…at least I would be able to take out what I require rather than what they say I may have!

A few months ago I got a new broker to look over my portfolio and give me up-to-date advice on the status of the policies I have.  She looked at this particular policy and remarked “I hope you were not thinking of retiring on this policy!”…….uhhmmmm Yes! Actually I was!!! urgh 😦

So here is my advice………………..NEVER EVER EVER EVER believe an Insurance Salesman when they say they are acting in your best interest by ‘selling’ you this policy that will ‘best suit your needs’.

Bollocks!!! the only person it suited was you!!!   I am pretty darn certain that when he sat there at my dining room table that day 25 years ago, the only house he was picturing, was the house he would buy with the commission he was earning from the ‘sale’ of these 25 year policies that he persuaded persons like me was ‘the best policy for your needs’.

and you can be darn sure I will never again give my hard earned pounds/pence to any Insurance Company and I will never take up a policy with an Insurance Salesman.

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