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Feb 3, 2020 by |

California and San Francisco Annuity Attorney: Misleading Promotions On Interest Rates

ATTORNEY NEWSLETTER

Beware the Hype

Consumer Risks, Especially For Seniors

Unrealistic Expectations

Based on years of litigation experience, our lawyers recommend consumers, especially senior consumers, avoid annuities or life insurance.  Insurance carriers, marketing groups and agents advertise tantalizing interest rates on annuities sometimes equaling 7%.  Sounds great in the low-interest rate world, right?  Don’t buy it – it sounds too good to be true, and it is.  The San Francisco annuity and financial elder abuse attorneys at Evans Law Firm, Inc. represent consumers, especially seniors, who lose money on annuities through high commissions and fees, misleading information on interest rates and other contract terms, withdrawal charges, botched replacement transactions, and tax bills. If you or someone you know has lost money on an indexed annuity, call us today at 415-441-8669 or toll free at 1-888-50EAVNS (503-8267) for a free review of your policy.  A list of carriers appears below.

Understand How Interest Rates Work In Annuities

For years now we’ve been in a low-interest-rate economy where people approaching retirement search for bigger returns. In comes an insurance agent promising a 7% return on a “safe” annuity.  When you get to the details, however, you find out that the 7% is only a “guarantee” on the growth in a separate account created by an optional income rider you purchase for 1% or more each year.  The 7% is not money you can withdraw.  Rather, it grows an income account you’ll only access many years in the future – in periodic payments – if you live that long and do not need your money for an emergency or change in your living expenses, like increased medical attention or care services. In the meantime, the actual growth on your money may be 1-3% after fees.

Other Risks

There are other ways consumers lose money on annuities too:

Surrender charge. If you take all or part of your money out of a deferred annuity before maturity, you will pay a surrender charge. The surrender period is a set period of time that typically lasts six to fifteen years after you purchase the annuity. Surrender charges come right out of your savings.

Tax bills and penalties. Withdrawals from annuities are taxable, typically at ordinary rates. In addition, under current tax law, if you take all or part of your money from tax-deferred annuities before you reach age 59½, you may have to pay a 10 percent penalty.

Hits on your return. Dividends on the stocks held in whatever funds your annuity is invested in, are not included in calculating your gain. In a direct mutual fund investment you would receive the benefit of those dividends.

Caps and participation rates.  Annuity carriers set caps on your returns and participation percentages that limit your return to a portion of the gains made in the chosen index.  Direct investment in the index would not be subject to these limitations.

Market index drop. You may lose money in some indexed annuities if the market index goes down.

Insurance company failure. Many indexed annuities promise to make payments many years into the future.  But remember that all amounts payable are subject to the ability of the insurance company to pay.  Circumstances may arise where the insurance company is unable to pay its obligations. 

Always consult an investment professional with nothing to gain from a sale if you are considering an annuity and always consult your tax advisor before you purchase, surrender or exchange an annuity as all annuity transactions have tax consequences. We do not provide investment advice at the Evans Law Firm, but we can represent you if you’ve lost money on any annuity.

Contact Us

If you have lost money on an indexed or other type of deferred annuity or life insurance contact Ingrid M. Evans and the other Evans Law Firm financial elder abuse, annuity and life insurance attorneys at (415) 441-8669 or toll free at 1-888-50EVANS (503-8267), or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. California law provides injured seniors with 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.  If you have suffered a loss from this kind of agent/advisor misconduct, the lawyers at Evans Law Firm will work with you to see that those responsible for your loss pay up.  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 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.

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 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

PacLife

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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