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Sep 28, 2018 by |

Marin County and California Financial Elder Abuse and Annuity Attorneys: Concealed Annuity Replacements


The Trouble With Annuity Replacements

Churning Annuities

In shifting economic climates, insurance agents often recommend replacement of old annuity or whole or universal life insurance policies with promises of better, newer products. For most policyholders, especially seniors, replacements are inappropriate because they are expensive, can trigger tax liabilities, and carry new surrender charge schedules tying up policyholder money for even more years. Agents earn commissions on replacements and may fail to explain these disadvantages.  The Marin County and California annuity and financial elder abuse attorneys at Evans Law Firm, Inc. represent clients, especially seniors, who have suffered losses and tax liabilities on improper annuity or life insurance replacements by commission-driven brokers.  If you or a loved one has been a victim of a costly and inappropriate replacement, securities fraud or other form of financial elder abuse call us at the Evans Law Firm at (415) 441-8669, and we can help. 

Replacements and exchanges of variable annuities and whole life insurance policies are examples of brokers “churning” or “twisting” client accounts and contracts. Some replacements qualify as so-called “1035 exchanges” where the IRS does not tax the proceeds of the existing policy as long as that policy is exchanged for a similar one and the policyholder does not withdraw cash from the exchange.  A 1035 exchange requires extra paperwork and delays commission payments so brokers may not elect (or inform you of) 1035 treatment.  Instead the agent “conceals” the replacement and the application is treated as a new purchase application. 

Even in a 1035 exchange the policyholder will pay surrender charges to the prior carrier if the policy is still in the surrender period. Sometimes surrender periods last as long as 10 years or more.  Annuities and life insurance are illiquid investments and when you replace a contract with a new one, your surrender period resets under the new policy.  It will be all that much longer before you can access your money under the new contract if you need a withdrawal above the minimum penalty-free amount you’re allowed.  That can be especially disastrous for seniors faced with an emergency or more money for living expenses.  Bottom line is beware of replacements and exchanges.

Contact Us

If you or a loved one live in Marin County or elsewhere in California and are over age 60 and have suffered from an inappropriate replacement of your existing annuity or been a victim of securities fraud or financial elder abuse contact Ingrid M. Evans and the other Marin County and California annuity and financial elder abuse attorneys at the Evans Law Firm today at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with complex securities cases and complicated financial contracts and large insurance companies.  We can help guide your case through a jury trial or toward an equitable settlement.  We also handle cases involving physical and financial elder abuse, other types of qui tam and whistleblower cases, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Leading providers and distributors of life insurance and annuities, including variable and fixed indexed annuities, in California are listed below. We are not in any way suggesting that any of these carriers or distributors has done anything wrong.  Rather, 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 National Life Insurance Company

Ameriprise Financial/RiverSource Life Insurance Company

Ameriprise Financial/Securities America, Inc.

Athene Annuity & life Assurance Company

Athene Annuity and Life Company

Athene USA

Aviva Life Insurance Company

AXA Equitable Life Insurance Company/AXA US

Bankers Life Insurance and Casualty Company

Brighthouse Financial, Inc./MetLife

Citigroup Global Markets, Inc.

Crump Life Insurance Services, Inc.

CUNA Mutual Group/CMFG Life Insurance Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

Genworth Life Insurance Company

Global Atlantic Financial Group/Forethought Life Insurance Company

Guardian Life Insurance Company

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

Massachusetts Mutual Life Insurance Company

Merrill Lynch Life Agency Inc.

Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.

Nationwide Life Insurance Company

New York Life Insurance Company

Northwestern Mutual Life Insurance Company

Pacific Life Insurance Company

Principal Financial Group

Prudential Life Insurance Company

Raymond James Insurance Group

RiverSource Life Insurance Company/Ameriprise Financial

Securities America, Inc./Ameriprise Financial

Security Benefit Life Insurance Company/Guggenheim Partners

Symetra Life Insurance Company

Transamerica Life Insurance Company

Unum Life Insurance Company of America

Voya/Reliastar Life Insurance Company

Wells Fargo Advisors

World Financial Group Insurance Agency, Inc.

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