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Jun 9, 2021 by |

California and San Francisco Financial Elder Abuse Attorney: Seniors And Unsuitable Annuities

ATTORNEY NEWSLETTER

Taking A Closer Look At Deferred Annuities

Avoid High Pressure Sales

Dangers Of Exchanging Or Replacing Policies

Evans Law Firm, Inc. recommend against deferred annuities for older consumers because the commissions and fees are high, returns rarely meet expectations, and the contracts tie up your money for years.  This last point – the so-called “illiquidity” of deferred annuities – is especially significant for seniors.  Once you’re in an annuity it is very expensive to get out and switch investments or just access your own money you may need for an emergency or because you’re living expenses have increased.  Despite these pitfalls, insurance agents pursue senior consumers with long-term deferred annuities because time an agent sells a contract (or gets you to switch an old one for a new one) he or she receives a sales commission.  There is considerable investor uncertainty these days about where the economy is headed post-pandemic and where interest rates and inflation are headed.  Agents seize on market jitters and promise products that (they say) offer safety and guaranteed income.  Don’t buy it until you understand how these contracts really work.  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. 

Pressure Sales and Consumer Considerations

Beware 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 and whenever you are approached, keep these considerations in mind:   

  • 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. Once you’re sold a deferred annuity contract, there will be a penalty if you withdraw your money before the expiration of the surrender period. The surrender period can be as long as ten years or more and the withdrawal penalty can be as high as 15%.
  • Ask your agent and/or the company for an explanation of anything you don’t understand. Annuities have very complex rules regarding how returns are calculated These equations may mean that the return you actually receive on your money is significantly lower than the “teaser” or “contract” rate.
  • Indexed annuities invariably subject your return to caps and “participation rates.” These caps and limitations will reduce your return from whatever full rate of return the chosen index generates; a typical participation rate is 80% which means you will under the best of circumstances see only 80% of a fund’s return. By comparison, any direct fund investment would not deprive you of the fund’s full return.
  • Watch for red flags: high pressure sales tactics, talk that you have to act fast or will miss an opportunity, and delay in providing credentials. Check your agent’s license with the California Department of Insurance.
  • 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.
  • Keep detailed records. Get all rate quotes and key information in writing. Once you’ve made a purchase, keep a copy of all paperwork you complete and sign, as well as any documents you’ve been given, including illustrations, correspondence, special offers and payment receipts.

Protect Yourself From Manipulation And Financial Elder Abuse

If you are a senior, always get a second opinion on any investment proposal from a professional with nothing to gain from a sale.  Also always consult your tax advisor before making any purchase or exchanging, surrendering or withdrawing from any annuity.  All annuity transactions have tax consequences.  Unscrupulous agents or financial advisors are particularly successful in preying on older investors who do not have someone to discuss business matters with before they make a decision. The results can be disastrous financially.  Some investments may be entirely fraudulent as in Ponzi schemes.  Other investments may be entirely unsuitable for the senior consumer and extremely expensive to get out of as is the case with deferred annuities.  Any of these investments may also result in tax liabilities. 

Contact Us

If you are over 60 and live in San Francisco 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=”mailto:info@evanslaw.com”>info@evanslaw.com</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

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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"I contacted Attorney Ingrid Evans for advice about a financial elder abuse case. She was extremely knowledgeable, bright and informative. I highly recommend her. I am an attorney myself, and know when I am talking to a another excellent attorney."
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