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Aug 20, 2018 by |

California Annuity and Financial Elder Abuse Attorney: The Myths of Variable Annuities

ATTORNEY NEWSLETTER

Be Wary of Variable Annuities

Don’t Be Blindsided In Your Search For Higher Returns

In our current low-interest rate environment, insurance agents and retirement planners push variable annuities as a way to get more bang for your buck when it comes to retirement savings. Be very careful.  These products are risky and complicated and agents spread a few outsized myths about the value of these contracts.  We want to clear the air for you.[1]

The California and San Francisco securities and annuity lawyers at Evans Law Firm, Inc. represent clients who have lost money on commissions, fees and surrender penalties under inappropriate variable annuity contracts sold by banks, brokers, and insurance agents. If you or a loved one is over 60 and lives in California and have been sold an inappropriate or unsuitable variable annuity or suffered loss on a policy surrender, call the California financial elder abuse and annuities lawyers today at Evans Law Firm (415)441-8669 and we can help. 

One experienced auditor[2] recently put together a list of variable annuity myths we’d like to share along with our own thoughts on each:

  • Myth #1: Variable annuities are suitable investments for retirees. When you’re younger, market risk may well be worth the gamble on a higher return. But seniors may not be in a position to take on market risk. Variable annuities fluctuate with the markets and may expose older policyholders to too much risk of their capital decreasing.
  • Myth #2: Your money is safe. Annuities are not insured investments. Your principal will fluctuate up and down with the market. Future income is based solely on the carrier’s ability to pay it out.
  • Myth #3: Fees are low. In fact, variable annuities carry high upfront commissions and continuing fees as high as 2-4% per year, seriously eroding returns. Any withdrawals during the surrender period (up to 10 years or longer in some contracts) will be subject to penalties.
  • Myth #4: Your income rider value is your cash value. Here’s where things get complicated and agent explanations a little vague! First, understand you will pay an annual extra fee for any income rider, usually around 1.5%. Second, if you surrender or take a lump sum withdrawal, you will not get the incomer rider “pot” but rather the policy’s considerably lower “cash value.” Agents gloss over the details of income riders, but know that they are very complex and play out in ways you may not anticipate.

Contact Us

If you or a loved one lives in California, is over 60, and been sold an unsuitable or inappropriate variable or fixed annuity or suffered loss on a surrender or replacement, contact Ingrid M. Evans and the other California and San Francisco securities, financial elder abuse and annuity and life insurance attorneys at Evans Law Firm (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. 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 also 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.

Some of the leading providers and distributors of life insurance and annuities in California are listed below. Some of these carriers offer products through consumer banks. We are not in any way suggesting that any of these carriers or distributors has done anything wrong or offers unsuitable variable annuities.  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

Athene Annuity & life Assurance Company

Athene Annuity and Life Company

Athene USA

Aviva Life Insurance Company

AXA Equitable Life Insurance Company/AXA US

Bankers Life Insurance and Casualty Company

Brighthouse Financial, Inc./MetLife

Citigroup Global Markets, Inc.

Crump Life Insurance Services, Inc.

CUNA Mutual Group/CMFG Life Insurance Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

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

Massachusetts Mutual Life Insurance Company

Merrill Lynch Life Agency Inc.

Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.

Nationwide Life Insurance Company

New York Life Insurance Company

Northwestern Mutual Life Insurance Company

Pacific Life Insurance Company

Principal Financial Group

Prudential Life Insurance Company

Raymond James Insurance Group

RiverSource Life Insurance Company/Ameriprise Financial

Security Benefit Life Insurance Company/Guggenheim Partners

Symetra Life Insurance Company

Transamerica Life Insurance Company

Unum Life Insurance Company of America

Voya/Reliastar Life Insurance Company

Wells Fargo Advisors

World Financial Group Insurance Agency, Inc.

[1] While we do not provide investment or tax advice at Evans Law Firm, we have represented enough policyholders who’ve lost money on these contracts.

[2] You can read the whole article at https://www.palmbeachpost.com/marketing/considering-variable-annuities-read-this-first/JVsC31D9w575pizM2EewUK/

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