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.
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.
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=”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.