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Nov 19, 2022 by |

Marin County Financial Elder Abuse And Annuity Attorney: The Impact Of Sales Commissions And Surrender Charges On Deferred Annuity Returns


Annuity Sales Commissions Are Significant

Premium “Bonuses” Are Phantom Benefit

Lengthy And Costly Surrender Periods

Deferred annuities, like fixed indexed annuities, are long and complicated insurance contract under which an insurance company agrees to pay you income at regular intervals in the future in return for an upfront premium payment.  The insurance agent or advisor who sells these contracts is paid a sales commission by the carrier issuing the contracts.  Annuity carriers pay commissions as high as 7-10 percent.  Don’t be fooled by “premium bonuses” or other gimmicks that claim you will get this money; you likely never will, as further explained below.  Evans Law Firm, Inc. recommends seniors avoid deferred annuities because deferred annuity contracts are expensive and complicated and tie up a senior’s money for years.  High-pressure or deceptive sales tactics and sales of unsuitable annuities violate the law and constitute financial elder abuse when the targeted consumer is a senior.  Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. §§ 790 et seq. (Unfair Insurance Practices Act) and 10509 (suitability requirement).  Senior victims may be entitled to damages and an award of attorneys’ fees and expenses for bringing a case.  Cal. Welf. & Inst. Code § 15657.5.  If you are over 60, live in Marin County, San Francisco or elsewhere in California and own a deferred annuity (such as a fixed indexed annuity), call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Surrender Penalties

Withdrawal penalties or surrender charges present the biggest downside for seniors on these deferred annuity contracts.  Withdrawal penalties/surrender charges under deferred annuity contracts can be as high as 15% of your account value if you leave after one year, and the fees may continue for ten years or more. Surrenders also result in the loss of other policy benefits such as any “bonuses” you may have been promised to offset the sales commission that was paid to the insurance agent out of your premium payment.  Further, in addition to the surrender penalty and loss of policy benefits, you may face a tax bill on the amount surrendered at ordinary income tax rates. We do not give any tax advice at Evans Law Firm, Inc., so always consult your tax advisor before any annuity transaction.\

Sales Commissions And Fees

Sales commissions on any contract sold to you are paid upfront.  An agent may try and convince you that will be repaid this outlay by a so-called “premium bonus.”  Don’t buy it.  The “bonus” is not a sum of money you can ever withdraw.  Rather the carrier credits this “bonus” to your contract value for purposes of calculating your return.  However, on any withdrawal by you this “bonus” disappears and your withdrawal is subject to the penalty just described.  There are also ongoing fees on your contract which will further diminish your returns.  Annual fees include administrative fees, morality/cost of insurance expense, and rider fees for any enhancements to your policy.  For indexed policies your return will also be subject to participation rates (at less than a 100% of your index’s actual return) and caps on your returns.

Contact Us

If you are over 60 and live in Marin County or elsewhere in the State of California and have an indexed annuity, 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=””></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

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


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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