Analyze Costs Before You’re Sold An Annuity
Penalties On Withdrawals
Consult With Your Tax Advisor Before Any Annuity Transaction
Whenever an agent approaches you to consider a deferred annuity, if you’re a senior think long and hard about the costs buried in annuities. Below, we analyze costs more closely but largely annuity costs fall in two categories: annual costs and fees and the costs/penalties incurred if you withdraw your money or surrender the policy. The financial elder abuse attorneys at Evans Law Firm, Inc. represent senior consumers who lose money on deferred annuities due to costs, withdrawal or surrender charges, unsuitability, replacements or exchanges of existing annuities, and tax liabilities. Call us today at 415-441-8669 or toll free at (888)503-8267 if you are over age 60, live here in San Francisco or elsewhere in California, and have lost money on a deferred annuity surrender or replacement.
The costs of deferred annuities include the following:
- Surrender penalties. Surrender penalties are typically assessed on any money withdrawn that is in excess of a pre-specified annual withdrawal allowance. Penalties may be as high as 15% or more on the amount withdrawn Surrender periods can range up to fourteen years.
- M&E. Mortality and expense risk charges average about 1.12 per year. These fees protect the insurance carrier’s risk of policyholders living longer than the actuarial tables predict – i.e., the “cost” of providing the insurance
- Contract Fees. Contract fees may range from $25 to $40 per year. Ask the agent what the policy’s annual contract fee is.
- Administrative Fees. Administrative fees typically pay for production and mailing of account statements and other customer services. This fee can be around .5%.
- Subaccount Fees. Sub-account fees are fees charged by the managers of the underlying mutual funds in an annuity. These fees are buried in the returns on the subaccounts but average just under 1%.
- Rider Fees. Any special enhancement riders will add additional costs to the policy. An income rider for example normally costs 1-1.5% annually.
- Miscellaneous Fees. There may be other fees imposed, such as a fee for excess transfers between sub-accounts.
Fees can accumulate quickly to erode any promised return on the contract being offered you. Press the agent for details and always get a second opinion from an investment professional with nothing to gain from a sale. Also, remember to consult with your tax advisor before any annuity transaction because all transactions in annuities have tax consequences.
Ingrid M. Evans and the other Evans Law Firm financial elder abuse, annuity and life insurance attorneys represent senior policyholders who have lost money on deferred annuities, If you are over 60 and live here in California and have lost money on a deferred annuity call us at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>.
Below is a list of the leading providers of deferred annuities in California. This list is provided solely as a reference for our readers, and we do not mean to imply that any of the following carriers has done anything wrong.
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
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.