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Nov 18, 2016 by |

Contra Costa Annuity Attorney: Annuity Sales

ATTORNEY NEWSLETTER

Selling Annuities to Seniors

The way that financial advisors feel about annuities can be summed up by the adage “annuities aren’t bought, they’re sold.” Annuities are often presented by brokers as being retirement lifesavers, and claim that they are essential to making up the shortfall from savings and pensions. The phrase “guaranteed income” is like music to the ears of seniors and retirees trying to manage dwindling resources in a confusing market, and many buy into the story that brokers tell them.

Sadly, this trust is often misplaced, and the opaque inner workings of annuity policies are more likely to grind up a senior’s savings than to multiply them. Management fees, surrender penalties, liquidity charges, and complicated gradations of returns often mean that even if a policyholder succeeds in avoiding the numerous pitfalls that are built into the policy, they are still worse off than if they had invested in low-risk, low cost investments.

One sector of the senior population that has been particularly had-hit by these products, and especially the more complex varieties such as variable and indexed annuities, is teachers. These public servants often have to cope with diminishing pensions, poor retirement options, and low income, so the offer of an annuity that can provide certainty for retirement seems too good to pass up. In addition, many of the 403(b) retirement plans offered to teachers include variable annuity polices, as much as 50% more than the 401(k) plans offered to private sector employees.

Variable annuities are widely panned by financial advisors and annuity attorneys, and their proliferation in the retirement plans of teachers is a tragedy. Including these risky products presents a constant threat that a retired teacher will suddenly find their retirement plan derailed, and have to find some way to make up for an unexpected income shortfall. Brokers sell these plans to teachers because they see them as easy marks, and know that selling an abundance of these types of policies is an easy way to make a commission. The upshot is that as teachers live their classrooms and head into retirement, they have to walk across a financial mine field as long as they hold these annuities.

Some of the major annuity and life insurance providers are:

If you or a loved one has a variable annuity, contact the Evans Law Firm at (415) 441-8669, or by email at info@evanslaw.com. Our Contra costa Annuity Fraud attorneys have experience handling cases involving complex financial contracts and dealing with large insurance corporations. We can help guide your case through a jury trial or toward an equitable settlement.

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