Free Lunch Seminars and Ads Push “Financial Strategies”
If It Sounds Too Good To Be True, It Usually Is
Take Your Time and Do Your Homework
Older adults are too often the targets of annuity salespeople intent on earning a sales commission. Sales tactics include free lunch or dinner seminars advertised as “financial strategy planning” or “financial tips for seniors” or some other title that sounds informative and useful. But the real story is very different. The free meal setting often turns into a high-pressure sales setting and if you do not buy on the spot you may set yourself up for some high pressure pursuing thereafter. The truth is that deferred annuities are highly complex insurance contracts and they are very expensive to get out of later if you are not satisfied or need your money back. California law protects seniors from agents selling them unsuitable insurance products. The Marin financial elder abuse and annuity attorneys at Evans Law Firm, Inc. represent indivudals 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 Marin or throughout California. Call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
What Does Suitability Mean?
“Suitability” means that any recommendation of an insurance product is appropriate for a consumer’s “financial situation and needs.” Cal. Ins. Code § 10509.914(a). A consumer’s “financial situation and needs” is evaluated on the basis of income, expenses, debts, age of the consumer, liquid savings, and related financial information. California insurance law and financial industry standards both require insurance agents and financial advisors to gather financial information and to evaluate the “suitability” of any insurance product they offer to senior consumers. See Cal. Ins. Code § 10509.914 (insurance agent “shall have reasonable grounds for believing that the recommendation is suitable for the consumer”); FINRA (Financial Industry Regulatory Authority) Rule 2330 (advisors and brokers and their supervisors responsible for satisfying suitability requirements for financial products sold). Agents and carriers are required to gather information in order to evaluate suitability. That information includes:
- Age of consumer
- Financial status of consumer including income, liquid assets and care needs/living expenses
- Does the senior consumer have Long Term Care Insurance in place?
- Tax status of the consumer
- Investment objectives
- Other information to be used or considered relevant
Prohibitions on Selling Unsuitable Products As “Exchanges”
The suitability requirement applies to all California consumers when it comes to the sale of annuities but there are additional safeguards for seniors in this “suitability” requirement. Specifically, the 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.
Marin annuity and financial elder abuse attorney Ingrid M. Evans and the other attorneys at Evans Law Firm represent seniors who have been sold an unsuitable annuity, or where the agent and carrier failed to disclose important information or otherwise caused senior consumers to lose money on deferred annuities. If you are over age 60 and have lost money as the result of a deferred annuity transaction or surrender in Marin County or elsewhere in California, you can reach 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:firstname.lastname@example.org”>email@example.com</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.