Thanks to new legislation recently signed by Governor Jerry Brown, insurance carriers in California will no longer be allowed to levy surrender charges against a policy’s death benefit. California elder abuse attorneys say that the law, which takes effect on January 1, 2016, will protect more senior citizens.
The law was backed by senior citizens groups and California insurance regulators and passed unanimously in both the Senate and Assembly.
Surrender charges penalize the annuitant for withdrawing a portion of the investment early in the annuity life, and are designed to protect the carriers. Annuitants purchase death benefits in the event that they die before the annuity has matured.
Some insurers do not pay out death benefits that are less than the money paid into the annuity, but others do. The death benefit can be less than the initial investment, depending on the surrender charge. The new law will ensure that a living spouse or beneficiary will at least receive the amount of the initial investment in the event of the annuitant’s death prior to the annuity maturing. The new law requires that the death benefit for fixed deferred annuities be at least equal to the annuity amount or the accumulation value for those annuities issued to consumers 65 years of age or older.
This is just one example of ways that nursing home reform, health care and elder financial protection advocates are attempting to close loopholes in order to protect seniors. California elder abuse attorneys say that seniors are especially vulnerable to untrustworthy agents.
Evans Law Firm, Inc. handles financial elder abuse cases, including insurance fraud and annuity fraud lawsuits. Evans Law Firm, Inc. is currently investigating claims related to Aviva (also sold through Accordia Life and Annuity and Athene Life Insurance and Annuity), Transamerica Life Insurance, and Fidelity & Guaranty Life. If you have purchased an annuity and want to know if it is a suitable investment for you, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at firstname.lastname@example.org.