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Apr 14, 2016 by |

Aviva IUL Policies May Be Risky for the Elderly

Aviva is headquartered in Britain and offers insurance policies to 34 million customers spread throughout 15 different countries. Aviva USA’s life insurance line had approximately $10 million in statutory admitted assets at the end of 2012, when a company called Athene made the decision to purchase Aviva USA from Aviva PLC for $1.8 billion. Aviva’s life insurance business was subsequently sold to Commonwealth Annuity and Life Insurance Co., which is a subsidy of the Global Atlanta Financial Group.

The insurance industry, with its multi-billion dollar mergers, acquisitions and sales is big business. A large part of the business done by Aviva is the sale of indexed universal life insurance policies. Existing policyholders and those considering the purchase of indexed universal life insurance must understand the terms of the policies they are purchasing and must do their due diligence into the reputations of the insurers offering products.

Aviva USA is one of the largest providers in the United States of indexed universal life insurance funds.  In addition to providing a death benefit, these policies acquire a cash value and there is an investment component. Policies are expected to be held throughout the life of the insured.

Understanding insurance investments is incredibly complex, and many people rely on marketing materials and advice from financial advisors. Unfortunately, sometimes bad advice is given or materials are misleading. If you believe you made an inappropriate investment choice in an indexed universal life policy because of the advice or information you received, contact an elder abuse lawyer in San Francisco for assistance. An attorney can also offer guidance on legal options and recourse if policy terms change unexpectedly or if you otherwise believe your insurer is treating you inappropriately.

IUL Policies

Indexed universal life insurance funds often promise protection from investment downsides, as well as flexibility in investment options. Policies may be marketed as safe and effective investment options to provide for a secure retirement, as well as marketed as investments providing tax advantages.

Policyholders may control the amount of the cash value of their insurance policies which is invested in fixed accounts, along with the amount invested in equity indexes. Policyholders have a selection of different index funds to invest in, and most indexed universal life insurance policies will protect the principle invested — although this often comes at the price of limited gains.

Indexed universal life insurance policies have significant, and often undisclosed, risks for consumer investors. These policies may have long surrender periods so consumers are forced to pay high fees unless they hold policies for a lengthy period. Fees and costs go up as a policyholder ages, and accumulated interest is not always enough to pay for added expenses so policyholders may have to bring in money from other sources. Promises of gains may be exaggerated, and taking advantage of tax benefits is often complex.

Individuals who are considering the purchase of indexed universal life insurance policies and existing policyholders must be aware of all policy terms, which can become complicated when insurance companies are sold. When policyholders face unexpected losses or fees, or when an investor believes inappropriate investment choices were made as a result of misleading marketing material or inappropriate financial advice, action should be taken.

An Elder Abuse Lawyer Can Help

If you invested in indexed universal life insurance policies and you believe you experienced financial harm as a result of unexpected costs, inappropriate investment advice, or deceptive marketing information, contact the Evans Law Firm, Inc. by calling us at 415-441-8669 or toll free at 888-503-8267.


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