Indexed annuities and college savings plans

If you are in the midst of planning to start saving for your child’s college education, it may be a good idea to work with a financial planner who understands indexed annuities.  parents are looking for a lower risk investment that offers them gains that are tax free and have the stability of a money market account.

What are indexed annuities?

Simply put, these are insurance policies that provide income. Indexed annuities are typically tied to a stock index like the S&P 500 and the returns are based on the gains in the index. When using this type of an investment vehicle, your principal investment is protected until the time the surrender period ends. Since most indexed annuities are based on 10 year investments, if your child is 8 or younger, these investments work well. Even if your child is older, you may still be able to use an indexed annuity for their college expenses.

How safe are indexed annuities?

An indexed annuity is typically a fairly safe investment since your principal balance is protected throughout the life of the policy. Gains on your investment are credited to your account based on the performance of the S&P 500 and is subject to any caps that are placed on the policy.

How much can I earn in interest payments?

Like most annuities, you can purchase indexed annuities that have a minimum return guaranteed.  Each contract should be reviewed carefully and discussed with your financial advisor so you are aware of how much you can earn. Since each contract is different, there is no single answer that would apply to each contract.

What terms are offered on indexed annuities?

Like most annuities, there are various terms available. Contract terms may be as short as one year with an option to renew at the end of the term. The most common contract length for indexed annuities is six or seven years.

Are indexed annuities right for me?

The best way to determine if an indexed annuity is the right investment vehicle for your needs is to discuss them with your investment advisor. No single program is right for every investor.

Parents are always concerned about the rising cost of college in the United States. Indexed annuities can help you save for college, protect your principal balance and provide good returns.  You can secure your child’s future by ensuring when they are ready for college the money will be there for them to attend.


How to handle collection agencies

The tactics used by collection agencies can often be intimidating.  For someone who has never dealt with a collection agency, they can be frightening.  Unfortunately, companies that are owed money will only spend so much time trying to collect what is owed before turning the debt over to a collection agency.  More people than ever need to know how to handle collection agencies.  Here are some tips for dealing with professional collection agencies.

Remember the goal of collection agencies

One of the first things that consumers need to understand is that a collection agency does not get paid unless and until payment is received on the debt that is owed.  This means that they will try a variety of methods (not all of them ethical) to collect payment.  Most people who have debts that are in collection do not do it as a method of getting out of paying the bill; they simply have financial issues that prevent them from doing so.  This does not deter a collection agency; they will do their level best to trip debtors up and try to make it sound like the consumer does not intend to pay the bill.

Telephone calls from collection agencies

Once telephone calls from the collection agencies start, they cannot only be demeaning, but they can also border on harassment.  The first thing a consumer should do when receiving a call from a collection agency is make note of the date, and the time of the call.  The reason that this is important is that collection agencies may only contact consumers after 8am and before 9pm.  In addition, individual states may have more strict regulations that should be available on their website under consumer protection regulations.  Typically, this is the office of the Attorney General of the state.

How to stop telephone calls

Credit collection agencies are prohibited from calling consumers at work if they are advised that this type of call is frowned upon by an employer. In addition, if consumers request in writing that the credit collection agency stop calling them by telephone, they must do so.  This request should be made in writing and sent via registered mail to ensure that the consumer has proof that it was sent and when. After receiving this type of request, collection agencies may only call to advise you they are taking no further action or that they intend to take the matter to court.

Educating consumers

It is critical that consumers educate themselves about their rights if they are in debt. Many states have statutes of limitations as to how long a debt may be collected. This date is based upon the last date that a payment was made. The limits on debt collection vary from state to state, some as few as three (3) years and some as many as ten (10) years.  While credit collection agencies may continue to contact consumers regarding debts that are past the statute of limitations, they cannot take the consumer to court for these debts, if they do, the best defense is that the debt is past the collection statute of limitations.

Not all collection agencies are difficult to deal with, but many do depend on an uninformed consumer as their primary target.  Unfortunately, many collection agencies do not want a consumer to understand their rights as this lack of knowledge makes their collection job far easier, allowing them to collect their commission.  Most people feel that if they are having financial challenges that they have no alternative but to put up with ongoing telephone calls from collection agencies.

Consumers need only talk to a collection agency one time. Communication should remain professional. Consumers should not allow collection agencies to trick them into agreeing to make small payments without knowing their rights under the Collection Act. The most important thing consumers need to learn about how to handle collection agencies is to know their rights as a consumer.