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Jun 21, 2021 by |

California and Los Angeles Financial Elder Abuse Attorney: Unsuitable Annuities Sold To Older Consumers


Disadvantages of Deferred Annuities

High Pressure Sales And Other Questionable Practices

Replacements And Exchanges Particularly Disadvantageous

Deferred annuities present real, potential problems for seniors through contract costs and especially the surrender penalties incurred when the policyholder wants to take his or her money out. When selling annuities to older persons, insurance agents may gloss over the fine print and leave out some important details that contain these hidden costs and penalties. We recommend older consumers avoid deferred annuities because we have seen too many senior consumers lose money with annuities.  It is very costly to get out of a deferred annuity once you’ve been sold one. If for whatever reason you want to switch your investment or merely access your own money you will pay a penalty.  Insurance agents pursue senior consumers despite these pitfalls for seniors because time any sale (or exchange) generates a sizeable sales commission.  If you are over 60, live in Los Angeles or elsewhere in California and have experienced an economic loss as a result of the sale of an unsuitable annuity or other investment product, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Senior Consumer Considerations

  1. Withdrawals and income payments from deferred annuities are usually taxed at ordinary rates.
  2. Premiums paid for an annuity are not investments in stock funds; you will not see the benefits of reinvested dividends.
  3. Withdrawals during the so-called “surrender period” will be subject to penalties by the insurance carrier. These penalties can be as high as 15% and the surrender period may last for ten or more years.  These penalties can really hurt seniors who may need their money for emergencies due to sickness or care costs.
  4. Cap rates, participation rates, and spreads limit the growth in your annuity to less than the performance of whatever market index your annuity is tied to. Mutual funds do not carry these kinds of limitations on growth.
  5. Beneficiary designations can have very adverse tax consequences for your beneficiaries when you die. Always consult your tax advisor on all aspects of an annuity investment, including your beneficiary designations.

Always get a second opinion from a professional with nothing to gain from a sale, before you allow an agent to sell you an annuity.  Also, consult with your tax advisor. Every annuity transaction, whether a purchase, exchange, replacement, surrender or cancellation has tax consequences so you need to speak with your tax advisor before entering into any kind of annuity transaction.

Finally, be especially wary of agents who “cold call” you, contact you repeatedly by phone, mail you “limited time offers,” maybe even show up without an appointment as we emerge from lockdown.  We have even seen cases where agents refuse to meet with seniors and others of their family to discuss products.  That is a real red flag!  Many of these questionable sales practices violate California law. See, e.g., Cal. Ins Code §§ 785-789.  However you are approached, be sure you understand the long-term nature of deferred annuities. Deferred annuities are not like direct deposits in stock funds where you can withdraw your money without fund penalties. Check your agent’s license with the California Department of Insurance.  Remember that annuities are not insured investments like CDs and other bank deposits; the promise to pay is only as good as the company’s word. Check the company’s credit rating. Legitimate insurers have their “creditworthiness” rated by independent agencies such as Standard & Poor’s, A.M. Best Co. or Moody’s Investors Services. An “A+++” or “AAA” rating is a sign of a company’s strong financial stability.

Contact Us

If you are over 60 and live in Los Angeles or elsewhere in California and have lost money on a deferred annuity or indexed universal life insurance contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=””></a>. Ingrid will pursue all remedies available to you against all parties responsible, including restitution (getting your money back), extra damages (to punish the fraudulent conduct) and awards of attorneys’ fees and costs to the senior forced to bring an action against the wrongdoers. 

Some significant issuers and distributors of fixed, variable and fixed indexed deferred annuities in California are listed below.  We are not in any way suggesting that any of these carriers or distributors has done anything wrong.  The list is provided solely as a reference for our readers.

AIG/American General Life Insurance Company

Allianz Life Insurance Company of North America

American Equity Investment Life Insurance Company

American General Life Insurance Company/AIG

American International Group, Inc. (AIG)

American National Life Insurance Company

Athene Annuity & Life Assurance Company

Athene Annuity and Life Company

Athene USA

Aviva Life Insurance Company

AXA Equitable Financial Services, LLC

AXA Equitable Life Insurance Company/AXA US

AXA Advisors, LLC

Brighthouse Financial, Inc./MetLife

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Genworth Financial, Inc.

Genworth Life and Annuity Insurance Company

Genworth Life Insurance Company

Guggenheim Partners, LLC

Guggenheim Partners/Security Benefit Life Insurance Company

ING USA Annuity and Life Insurance Company

Jackson National Life Insurance Company

John Hancock Life Insurance Company

Lincoln Benefit Life Company

Lincoln Financial Group

Massachusetts Mutual Life Insurance Company

Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.

Minnesota Life Insurance Company

Nationwide Investor Services Corporation (NISC)

Nationwide Life and Annuity Insurance Company

Nationwide Life Insurance Company

New York Life Insurance Company

Northwestern Mutual Investment Services, LLC

Northwestern Mutual Life Insurance Company

Northwestern Mutual Wealth Management Company

Pacific Life & Annuity Company

Pacific Life Insurance Company


Security Benefit Corporation

Security Benefit Group, Inc.

Security Benefit Life Insurance Company/Guggenheim Partners

Security Investors, LLC

Security of Denver Life Insurance Company/Voya

Transamerica Life Insurance Company

Voya Financial Advisors

Voya/Reliastar Life Insurance Company

World Financial Group Insurance Agency, Inc.

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