Complex Contracts With High Fees
Withdrawal Penalties For Getting Your Money Back
Lack Of Transparency On Interest Crediting And Other Features
Evans Law Firm, Inc. generally recommends against certain types of deferred annuities especially for seniors because these complex insurance policies carry high fees, lack transparency and are illiquid. The contracts are illiquid because during the so-called “surrender period” (with can last 10 years or more) withdrawals are subject to a penalty. You are locked in and if market changes during the surrender period drive you to move your money out of the annuity, you will have to pay a surrender charge and may face tax liabilities. Further, annuities may be sold based on incomplete information about these withdrawal consequences or other contract pitfalls. Questionable or incomplete sales tactics and presentations and the policies themselves may constitute violations of insurance laws and elder protections. Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. § 790 et seq. (Unfair Insurance Practices Act). Relief for injured seniors includes awards of attorneys’ fees and expenses for bringing your case. Cal. Welf. & Inst. Code § 15657.5. If you are over 60, live in Los Altos or elsewhere in Santa Clara County or the State of California and own a deferred annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Disadvantages Of Annuities
- High expenses. Upfront sales commission, annual administrative fees, cost of insurance charges, rider fees and other annual costs erode returns on your premium dollars, especially on an indexed or variable annuity where the value is dependent on the investment returns in the contract’s sub-accounts. Some contracts are so complex that the full rate of the internal expenses is hard for the average investor to ascertain and understand.
- Difficult to exit. Surrender charges might amount to 10 percent or more of the value of the contract in some cases. There is a surrender period which can vary in length and sometimes be as long as 15 years. With such a contract, if you are sold a policy at age 70 you will be 85 before you can withdraw your money without a surrender charge. If your financial situation, medical emergency, or rising care costs force you to withdraw your money you may suffer a significant loss.
- Possibility of an insurer defaulting. Annuities are only guaranteed by the insurance company who issues the contract; there is no FDIC or other insurance covering your investment even if the annuity is sold to you by a bank representative. Annuities are not like CD’s or other federally insured bank deposits.
If you are over 60 and live in Los Altos or elsewhere in Santa Clara County or the State of California and have a deferred annuity or universal life insurance contract, we can review your contract for free. You can reach Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or toll free at 1-888-50EVANS or by email at <a href=”mailto:email@example.com”>firstname.lastname@example.org</a>.
Some significant issuers and distributors of fixed, variable and fixed indexed deferred annuities in California are listed below. We are not in any way suggesting that any of these carriers or distributors has done anything wrong. 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 International Group, Inc. (AIG)
American National Life Insurance Company
Athene Annuity & Life Assurance Company
Athene Annuity and Life Company
Aviva Life Insurance Company
AXA Equitable Financial Services, LLC
AXA Equitable Life Insurance Company/AXA US
AXA Advisors, LLC
Brighthouse Financial, Inc./MetLife
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Genworth Financial, Inc.
Genworth Life and Annuity Insurance Company
Genworth Life Insurance Company
Guggenheim Partners, LLC
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
Lincoln Financial Group
Massachusetts Mutual Life Insurance Company
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Minnesota Life Insurance Company
Nationwide Investor Services Corporation (NISC)
Nationwide Life and Annuity Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Investment Services, LLC
Northwestern Mutual Life Insurance Company
Northwestern Mutual Wealth Management Company
Pacific Life & Annuity Company
Pacific Life Insurance Company
Security Benefit Corporation
Security Benefit Group, Inc.
Security Benefit Life Insurance Company/Guggenheim Partners
Security Investors, LLC
Security of Denver Life Insurance Company/Voya
Transamerica Life Insurance Company
Voya Financial Advisors
Voya/Reliastar Life Insurance Company
World Financial Group Insurance Agency, Inc.