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Nov 23, 2021 by |

California and Napa County Annuity Fraud and Financial Elder Abuse Attorney: Deceptive Sales Practices And Disadvantages of Annuities For Seniors


Deceptive Sales Practices

Fees And Surrender Charges

Understand How Returns Are Calculated

Annuity sales to senior citizens have increased in recent years, but so has a sense of confusion among older consumers who are so often targeted by agents selling complex and expensive annuities. The confusion over these products is due, in large part, to questionable or deceptive sales practices employed by companies and agents looking to take advantage of uninformed consumers. It is extremely important, when considering whether or not to buy an annuity, to take the necessary precautions in order to understand what annuities are and how they work before you are sold one.  Once you’re in an annuity it is very expensive to get out.  For that reason, Evans Law Firm, Inc. recommends against deferred annuities for older consumers especially.  Sales of unsuitable insurance products including annuities to seniors constitute financial elder abuse in California.  See Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse). If you or someone you know is over 60 and lives in Napa County or elsewhere in California and has a deferred annuity call us today at 415-441-8669, and we can review your contract for free.  Our toll free number is 1-888-50EVANS.

Deceptive Sales Practices

Watch for the following red flags, which serve as warnings of deceptive sales practices:

  • High-pressure sales pitch. If a particular group or agent has contacted you repeatedly, offering a “limited-time” deal that makes you uncomfortable or aggravated, trust your instincts and steer clear.
  • Quick-change tactics. Skilled scam artists will try to prey on your “time fears.” They may try to convince you to change coverage quickly without giving you the opportunity to do adequate research.
  • Unwilling or unable to prove credibility. A licensed agent will be more than willing to show adequate credentials.
  • Remember, if it seems too good to be true, it probably is!

Fees And Surrender Charges

Any time you consider an annuity contract, you need to understand all the fees that come with it.  First, understand that the agent will receive a sales commission as high as 10% on the transaction.  Deferred annuities also have administrative fees, mortality and expense fees, and rider fees for enhancements to policies.  There are also subaccount fees charged against your return on whatever index fund you select for investment of your premium dollars.

But the biggest danger for senior buyers is surrender charges. A surrender charge applies when you make more withdrawals than you’re allotted. Your insurance company could limit withdrawals particularly during the early years of your contract. Surrender fees are often as high as 15% and can apply for periods up to ten years or more.

Return Calculations

When you are sold an annuity even if you are given the opportunity to select an index fund for your investment, your policy return will not track the real return on that fund for several reasons.  First, your return will be capped at a percentage that may be less than the fund’s real return in any given year.  Second, you do not receive the benefit of reinvested dividends on the stocks in the fund as you would with a direct investment in the fund.  Third, the insurance company will also limit your gains through something called a “participation rate.” If you have a participation rate of 80%, then your investments will only grow by 80% of the amount that the index fund grew.

Contact Us

If you or a loved one been the victim of annuity fraud in Napa County, or in any California county, contact Ingrid M. Evans at (415) 441-8669, or by email at <a href=””></a>. Our toll free number is 1-888-50EVANS.

Some 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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