What are Riders?
Riders are attachments to deferred annuities sold by agents as enhanced benefits. They come with an additional fee added to your base premium. Available riders include income riders, long-term care riders, death benefit riders and other policy “enhancements.” All of these add-ons are expensive and promise benefits you may never see. Selling agents often gloss over details or deliberately conceal the way the recommended riders really work. Frankly, the riders are so complex the agent may not even understand them.
Take, for example, the income rider sold by agents as a “guarantee” of future income levels. Annual fees for income riders run around 1% of total policy value so right off the bat there’s a hit on your return. And you may never see the promised benefit. These contributions sit in a separately calculated fund apart from the accumulated value of the over-all annuity. The “value” of this separate fund is never available for withdrawal. Rather, the rider offers a “guaranteed” income for life payable only on a schedule determined by the carrier. But fees and withdrawals can diminish that future benefit and, in certain cases, wipe it out entirely. If you are over age 60 and reside in California, the California annuity attorneys at Evans Law Firm can review your annuity contract, including any riders and the policy’s surrender provisions, for free. Call us today at (415)441-8669.
Guarantees Sound Good – What’s the Catch?
There are several serious catches to how the rider works: You cannot peel off interest from an income rider like you can a CD or bond. Once you begin your income draw downs, the income will always be paid to you in “scheduled” amounts, determined by the carrier’s actuarial tables. Those payments are scheduled at inception and do not change as you get older or your circumstances change. Any surrender will never include the phantom amount of the income rider “fund.” Instead, you will pay a surrender charge, and any accruals in the separate rider account are forfeited entirely.
Annuities are extremely complex and not for everybody. Endorsements and riders are even more complex. Fees and commissions destroy returns. Annuities are illiquid investments and tie up your money for years and withdrawals for emergencies may incur steep surrender penalties; you should be positive you will not need whatever funds you commit by way of premium contributions. We understand all these drawbacks because we’ve represented senior policyholders who have lost money on these contracts. f you are over age 60 and reside in California, we are able to review your annuity at no cost if you believe that you or a loved one were victims of annuity fraud or suffered a financial loss as a result of income rider or other rider fees, and/or surrender penalties on an unsuitable annuity.
Annuities and life insurance produce large sales commissions for brokers but are often inappropriate products for consumers, especially seniors. Leading providers and distributors of life insurance and 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. Rather, 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 National Life Insurance Company
Ameriprise Financial/RiverSource Life Insurance Company
Ameriprise Financial/Securities America, Inc.
Athene Annuity & Life Assurance Company
Athene Annuity and Life Company
Aviva Life Insurance Company
AXA Equitable Life Insurance Company/AXA US
Bankers Life Insurance and Casualty Company
Berkshire Hathaway Group
Berkshire Hathaway Life Insurance Company of Nebraska
Brighthouse Financial, Inc./MetLife
Citigroup Global Markets, Inc.
Crump Life Insurance Services, Inc.
CUNA Mutual Group/CMFG Life Insurance Company
Delaware Life Insurance Company
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Forethought Life Insurance Company/Global Atlantic Financial Group
Genworth Financial, Inc.
Genworth Life and Annuity Insurance Company
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
Lincoln Benefit Life Company
Lincoln Financial Group
Massachusetts Mutual Life Insurance Company
Merrill Lynch Life Agency Inc.
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Minnesota Life Insurance Company
National Life Group
National Life Insurance Company/Equity Services, Inc.
National Western Life Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
North American Company for Life and Health Insurance
Northwestern Mutual Life Insurance Company
Oxford Life Insurance Company
Pacific Life Insurance Company
Principal Financial Group
Prudential Life Insurance Company
Raymond James Insurance Group
Reliance Standard Life Insurance Company/Tokio Marine Group
RiverSource Life Insurance Company/Ameriprise Financial
Securities America, Inc./Ameriprise Financial
Security Benefit Life Insurance Company/Guggenheim Partners
The Standard Life Insurance Company
Symetra Financial Corporation
Symetra Life Insurance Company
Transamerica Life Insurance Company
Unum Life Insurance Company of America
USAA Life Insurance Company
Voya/Reliastar Life Insurance Company
Wells Fargo Advisors
Western & Southern Financial Group
The Western & Southern Life Insurance Company
World Financial Group Insurance Agency, Inc.
If you or a loved one has suffered a loss on an income rider, policy surrender, or from other high fees and charges in California, contact Ingrid M. Evans and the other Evans Law Firm financial elder abuse and annuity attorneys at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a FINRA arbitration, jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.