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Nov 17, 2016 by |

California Annuity Fraud Attorney: Health Concerns


A major concern that our annuity fraud attorneys have with annuity products is the obfuscated means by which insurance companies try to squeeze some extra revenue out of their clients. In order to make their products appear more lucrative, they often advertise high base return rates, only to have the actual payout significantly reduced by management fees, surrender charges, and liquidity fees. These methods are increasingly drawing the ire of consumers and consumer advocates, as well as the Federal Government, which has started enacting new rules and regulations for annuities and brokers.

One issue that has consistently arisen in these types of cases is brokers and insurance companies keeping their clients in the dark about their options and the factors that go into calculating the costs of their annuities and life insurance products. Because many brokers and annuity salespeople have access to information about the products and the relative costs of different options, one would expect them to -advise their clients in order to help them save money and pick the best option for their financial situation. Instead, these so-called “financial advisors” often try to sell the policy that earns them the highest commission, regardless of its value to the client.

One particular factor of annuities that makes them a particular liability to seniors with medical conditions is the surrender penalty. While any senior may find themselves suddenly needing to use a portion of their annuity, this is even more likely for those who may incur sudden medical expenses. A surgical procedure or an operation that requires dipping into annuity funds may result in as much as a 15% additional penalty, further eviscerating retirement funds for no good reason.

The new requirement from the Department of Labor requiring brokers to act as fiduciaries to their annuity clients is designed to curb precisely this type of abuse. The reaction from brokers and annuity firms as they try to circumvent this requirement shows exactly how much the industry has relied on misleading uninformed clients in order to make money.

Some of the major annuity and life insurance providers are:

If you or a loved one has been the victim of an improperly sold or administered annuity, contact the Evans Law firm at (415) 441-8669, or by email at Our California annuity fraud attorneys have experience handling cases involving complex financial contracts and large insurance companies, and can help guide your case though a jury trial or toward an equitable settlement.

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