Always Get A Second Opinion Before Being Sold An Annuity
Understand Contract Fees And Withdrawal Penalties
Avoid Exchanges Or Replacement Transactions
Deferred annuities, unlike immediate annuities, require an upfront insurance premium for an income stream to be paid to you many years in the future. The deferral period can last ten or fifteen years so if you are in your sixties or seventies you will not see any income payments until you are in your eighties; we have seen some annuities where the policyholder would not get any income until they were in their nineties. These long, complicated policies run to 100 pages or more and are filled with pages and pages of actuarial tables. Insurance agents are paid significant sales commissions to sell these complicated products; there are also annual fees and subaccount fees and penalties for withdrawals. Evans Law Firm, Inc. generally recommends against certain types of deferred annuities for older consumers because these complex, expensive insurance policies may tie up a senior’s money for years and impose significant penalties if you need your money back. Unsuitable sales and recommended surrenders and exchanges of deferred annuities to seniors may constitute financial elder abuse claims under Cal. Welf. & Inst. Code §§ 15610.30 (definition of financial elder abuse) and 10509 (suitability requirement). Questionable sales tactics, like unannounced home visits or falsified applications, are illegal. See, e.g., Cal. Ins. Code § 790 et seq. (Unfair Insurance Practices Act). If you are over 60, and live in Los Angeles or elsewhere in California and would like us to review your annuity contract, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Annuities Are Long-Term Contracts
Seniors need to understand that a deferred annuity will tie up their money for a long time and any withdrawal will be subject to penalties and tax liabilities. Be skeptical of marketing gimmicks like teaser interest rates for the first year or “bonuses” Teaser rates expire quickly and bonuses will not be available to the annuitant if the contract is surrendered. The bonus is never a sum you can withdraw; rather, companies credit the so-called bonus amount to the policy’s annuitization value (not the cash value) and the annuitant may be required to receive policy benefits over a long period of time in order to receive the advertised high interest and/or bonuses. This is another reason it is very important for consumers to carefully read and understand the terms of the annuity contract prior to purchasing the policy.
Beware of Deceptive Or High-Pressure Sales Practices
While annuity sales to senior citizens have significantly increased in recent years, so has a sense of confusion among consumers. This is due, in part, to questionable or deceptive sales practices taking advantage of uninformed consumers. Watch for the following red flags, which serve as warnings of possible deceptive sales practices:
- High-pressure sales pitch. If a particular group or agent has contacted you repeatedly, offering a “limited-time” a deal that makes you uncomfortable or aggravated, trust your instincts and steer clear.
- Quick-change tactics. Unscrupulous agents will try to prey on your “ time fears.” They may try to convince you to change coverage quickly without giving you the opportunity to do adequate research.
- Unwilling or unable to prove credibility. A licensed agent will be more than willing to show adequate credentials.
Remember, if it seems too good to be true, it probably is!
If you are over 60 and live in Los Angeles or elsewhere in California and would like a free review of your policy contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669 (or toll free at 1-888-50EVANS), or by email at <ahref=”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.