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Apr 16, 2018 by |

California and Alameda County Annuity and Financial Elder Abuse Attorneys: Missing the Mark with Annuities


Think Twice Before Buying an Annuity

If you are over 60 and nearing retirement, you may be losing sleep over whether you’ll have enough income for your retirement years from your combination of pension benefits, Social Security, and personal retirement savings. Insurance agents and advisors, who stand to make a commission on any sale, may try and convince you to liquidate some or all of those savings and purchase an annuity for additional income.  Be cautious. Ultimately, the decision on whether to buy an annuity is yours alone but make sure you understand how they work and get a second opinion before any purchase or surrender/replacement, including from your tax advisor.

Annuities tie up your money for years and are virtually irreversible unless you pay a steep surrender penalty to get your money back. Promises of guaranteed income sound good, but the price is dear; if you face an emergency down the road and your personal savings are tied up in an annuity, you may face a big surrender charge, and probably a tax bill, in order to get out.

The Alameda County and California annuity and financial elder abuse attorneys at Evans Law Firm, Inc. represent clients, especially seniors, who have lost money on surrenders of annuities or from high commissions and fees on new or existing contracts.[1] There are significant downsides with these complicated investments especially for seniors and agents and advisors often prey on seniors in marketing them.  If you or a loved one has suffered a loss from a surrender and/or replacement of an existing annuity, or other form of financial elder abuse in Alameda County or elsewhere in California, call Evans Law Firm, Inc. at (415)441-8669 and we can help. 

Tying Up Savings and Hidden Costs

Whenever considering an annuity, remember that you already own one in the form of your Social Security benefit. You can always find out what your benefit is estimated to be by asking the Social Security Administration for a statement of your benefits.  You may also have a pension where you work and that is another annuity you already hold.  IRAs and 401(k) plans are also tax deferred savings vehicles and you may be able to increase your contributions to those in order to create a nest egg for retirement.

Annuities are expensive in terms of the benefits they provide. Here are just some of the costs:

    • Commissions. Annuities are insurance contracts and, like other forms of insurance, pay commissions to the selling agent. Commissions are paid out upfront and are substantial on life insurance and annuities. It takes a long time – and a healthy return – to recoup that upfront money.
    • Annual contract fees can run high as well. Make sure you know all the fees you’ll be paying.
    • Investment management fees. In variable and fixed indexed annuities your money will be held in separate mutual fund subaccounts. These subaccounts charge fees too, not always disclosed.
    • Optional rider fees for guaranteed income for life or enhanced death benefits. These fees can accumulate fast and significantly erode any return.
    • Withdrawal or surrender charges. Surrender charges can be as high as 15% and last for up to ten years or more

With any annuity, your money is tied up for a long time and any early withdrawal is subject to surrender charges. This is especially dangerous for seniors who may need their money before their policy matures. If you already own an annuity, agents may try and entice you to replace it with a new – and in their words “better” – one.  Any replacement (also known as twisting, switching or “churning”) can be costly.  You may incur steep surrender charges when surrendering your existing contract and may incur an unexpected tax liability.  We at Evans Law Firm have seen policyholders hit with big tax bills on replacements.  Always seek the advice of an advisor who does not stand to gain from any purchase and always consult your tax advisor.  There may be significant tax consequences for replacements, rollovers, purchases, and withdrawals. 

Some of the major annuity and life insurance providers in California are listed below. We are not in any way suggesting these carriers have done anything wrong.  Rather, the list is provided solely for our readers’ reference.

Allianz Life Insurance Company of North America

Allstate Life Insurance Company

American Equity Investment Life Holding Company

American General Life Insurance Company

American National Life Insurance Company

Ameriprise Financial/RiverSource Life Insurance Company

Athene Annuity and Life Company

AXA Equitable Life Insurance Company

Bankers Life Insurance and Casualty Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

Genworth Life Insurance Company

Global Atlantic Financial Group/Forethought Life Insurance Company

Guardian Life Insurance Company

Guggenheim Partners/Security Benefit Life Insurance Company

ING USA Annuity and Life Insurance Company

Jackson National Life Insurance Company

John Hancock Life Insurance Company

Life Insurance of the SouthWest/National Life Group

Lincoln Financial Group/The Lincoln National Life Insurance Company

MassMutual/Massachusetts Mutual Life Insurance Company

MetLife/Metropolitan Life Insurance Company

Midland National Life Insurance Company

Mutual of Omaha/United of Omaha Life Insurance Company

National Life Group/Life Insurance of the SouthWest

New York Life Insurance Company

Northwestern Mutual Life Insurance Company

Pacific Life Insurance Company

Principal Life Insurance Company

Pruco/Prudential Life Insurance Company

RiverSource Life Insurance Company/Ameriprise Financial

Security Benefit Life Insurance Company/Guggenheim Partners

Symetra Life Insurance Company

Transamerica Life Insurance Company

United of Omaha Life Insurance Company/Mutual of Omaha

Unum Life Insurance Company of America

Voya/Reliastar Life Insurance Company

Contact Us

If you or a loved one is over 60 and lives in California and has suffered loss on an unsuitable annuity, annuity replacement, or paid surrender charges on a deferred annuity or any other annuity or has been the victim of financial elder abuse in Alameda County or elsewhere in California, contact Ingrid Evans and the other Evans Law Firm annuity and financial elder abuse attorneys at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement.  We handle cases involving financial elder abuse, qui tam and whistleblower law, whole, indexed universal and universal life insurance, and indexed, variable, and fixed annuities.

[1] We do not offer investment or tax advice.

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