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Apr 9, 2015 by |

California Annuity Fraud Attorneys Warn Consumers About Risks in Purchasing Deferred Annuities

ATTORNEY NEWSLETTER

California annuity fraud attorneys note that people should be cautious in purchasing deferred annuity policies. Although these policies may seem like a beneficial investment, consumers are often misinformed about the actual risks of a deferred annuity policy.

Some life insurance companies and/or their agents misinform their clients about the risks of purchasing deferred annuities. Many annuity policies have terms such as maturity dates that outlive the life expectancy of the policy-holder, or have deferral periods with penalties associated that also outlive the life expectancy of the insurance customer. This makes this type of investment especially risky for senior citizens. California annuity fraud and insurance fraud attorneys say that agents and/or brokers often push the sale of deferred annuities, due to the higher commissions they receive on these sales. This can create a potential conflict of interest.

Additionally, an insurance agent may misrepresent the agreement by failing to disclose or fraudulently stating that the deferral period is shorter than it actually is—remember, when purchasing an insurance policy, the terms of the policy, the contract language controls and not what a person on the phone or an agent has told you. When a client selects a deferred annuity option, insurance companies, such as Aviva Life and Annuity Company and others, promise to defer the payments made to the insured party on their principal payment. This process maximizes the client’s total return, but only if the client is alive to see the payout. In many cases, the deferment period is longer than an elder consumer’s life expectancy.

A number of lawsuits have recently been filed against annuity and life insurance companies for selling bad deferred annuities. A class action lawsuit against National Western Life Insurance Co. settled in 2013 for $21 million and more recently, Allianz Life Insurance Co. of North America settled a class action lawsuit for $251 million.

Accordia Life and Annuity Company replaced Athene Annuity and Life Company (formerly known as Aviva Life and Annuity Company) as the insurer for a number of annuity and life insurance policies after acquiring Aviva USA in 2013. Aviva USA had previously been part of the Aviva Group, a British multinational insurance company headquartered in London.

Evans Law Firm, Inc. has offices in Los Angeles, Sonoma, and San Francisco, and handles all types of annuity fraud and insurance fraud lawsuits. At Evans Law Firm, Inc. we recommend that older citizens who have purchased deferred annuities, or are looking into similar policies, contact our attorneys to determine if the purchase of an Aviva Annuity was an appropriate or suitable annuity sale for you and your loved ones at 415-441-8669, or via email at info@evanslaw.com.

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