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Mar 12, 2021 by |

Los Angeles Annuity and Financial Elder Abuse Attorneys: Unsuitable Annuities And Questionable Sales Tactics

ATTORNEY NEWSLETTER

Financial Elder Abuse In Insurance Sales

Sales Tactics And Insurance Contracts As Forms Of Financial Elder Abuse

Disastrous Replacement Transactions

Financial elder abuse comes in various forms and from different sources.  One of the most pernicious and financially disastrous can be in the form of unsuitable insurance products, particularly certain deferred annuities and certain universal life insurance policies, sold to seniors by agents eager for a commission.  The financial elder abuse lies in the products themselves and the process by which they are sold.  We analyze both of these points below.  Our litigators have seen seniors injured by the terms of the deferred annuity or universal life policy sold to them and have also seen the questionable sales tactics agents employ to close these transactions.  If you or a loved one is a senior who has suffered on loss from an unsuitable annuity or universal life insurance policy, call us.  The Los Angeles financial elder abuse and annuity attorneys at Evans Law Firm, Inc. represent individuals over 60 who have suffered a loss due to cancellation, replacement, full or partial surrender, or high fees connected with a deferred annuity or other unsuitable insurance product here in Los Angeles or throughout California. Call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Financial Elder Abuse In The Contracts Themselves

Deferred annuities are highly illiquid, highly expensive and very often poorly performing.  The fee provisions and contract terms for calculating return and policy “value” are highly complex.  But the principal reason why the products are so inappropriate for older Americans is that heavy surrender penalties apply if the senior needs his or her money back before the annuitization period begins. If you buy at age 65, you’re generally looking at a 10- to 15-year surrender period, with a penalty as high as 25 percent at the front end. The return calculations under indexed contracts also work against you. Theoretically, these contracts track the performance of a chosen stock index like the NASDAQ or S&P 500.  The contracts supposedly protect you against slides in these markets, but policyholders pay for that “protection.”  Moreover, in rising markets, policyholders only share in the growth up to a predetermined cap and that return is further limited by the “participation rate” that allows the annuity holder to reap only a percentage of the market’s total gains. Other provisions buried in the contracts allow the company to further skim off gains.

Financial Elder Abuse In Questionable Sales Tactics

Sales agent commissions are often as high as 15 percent and are priced into the products. Agents often present an attractive “teaser” interest rate that lasts only for a short time, and the maintenance fees and other creative administrative fees buried in the contracts reduce the amount the annuitant actually receives. Most deferred annuities are sold by independent agents motivated by their own financial self-interest.  Typical sales tactics include ads in local papers heralding free advice on living trusts or similar estate planning “advice.”  These used to be often accompanied by a free meal but the pandemic has shut those kinds of gatherings down for now.  But through flyers or online pitches, agents may gather personal information from seniors about their assets, which agents later use for phone contacts, still under the guise of a financial planner. And always the solution the agent suggest is the same: an annuity.  These agents may insist that a prospect’s current investments are worthless and may make blatant misrepresentations about their product. One of the worst and most pernicious practices that our litigators see is people being rolled from one annuity to another. There are some protections for seniors here.  California law forbids insurance agents from recommending an exchange of an existing annuity for a new one if the transaction “requires the insured to pay a surrender charge for the annuity that is being replaced, where purchase of the annuity does not confer a substantial financial benefit over the life of the policy to the consumer, so that a reasonable person would believe the purchase is unnecessary.” Cal. Ins. Code § 10509.914(c)(emphasis added).  Our financial elder abuse and annuity litigators have represented senior consumers in many cases where an agent has talked a senior into an exchange or replacement of an existing contract and the senior has suffered serious economic injury as a result of surrender charges on the existing policy and heavy tax liability for the surrender.  Never agree to any exchange, replacement or surrender of an annuity without consulting your tax advisor.

Contact Us

Ingrid M. Evans and the other Los Angeles financial elder abuse and annuity attorneys at Evans Law Firm represent seniors who have suffered loss as a result of the sale of an unsuitable deferred annuity or universal life insurance contract or been exploited by questionable sales tactics.   If you are over age 60 and have lost money as the result of a deferred annuity transaction or surrender in Los Angeles or elsewhere in California, call Ingrid and the other Evans Law Firm attorneys at (415) 441-8669 (or toll free at 1-888-50EVANS)  or by email at <ahref=”mailto:info@evanslaw.com”>info@evanslaw.com</a> for a free review of your policy and sales materials.

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

Athene USA

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

PacLife

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.

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