Reply: 1.1
From: Steve Navra
Hi Michael,
BIG difference between the Major Life Insurers (Who provide pensions / annuities) and the General Insurers (HIH type of risk insurance)
It is about the level of guarantee they are able to offer - all to do with the amount of prescribed assets they hold. The Life insurers hold approx 12 X the security that the Major banks do. (Hence the funds are 12 times as safe!) Can't say the same about the general risk insurers.
Holding funds in the form of a pension / annuity / cashbond is about the safest home one can find for funds in this country.
This incidently is why we use the cashbond, so as to offer the best form of guarantee on the amounts invested - after all, most people utilise the equity in their homes for the purchase of such structure and you wouldn't want to be taking any risk with your home.
And yet, many still cross-collateralise their homes against various risk investments like property, margin lending /shares, warrants debentures, commodities to mention just a few!
Can anyone think of a safer home for one's funds?
Regards,
Steve
Oh, about Jacinta's article - whatever these i.o.u. / promisary notes are, they are about the complete opposite of the cashbond!
The cashbond being a GUARANTEED annuity (Pension) which fully returns your funds plus interest and linked to the long term bond rate, which is a conservatively low return on investment.
