Skip to Content

PHONE: 415-441-8669 | TOLL FREE: 888-50EVANS

Jan 3, 2022 by |

Napa County Financial Elder Abuse And Annuity Attorney: Sales Of Unsuitable Annuities To Seniors

ATTORNEY NEWSLETTER

Questionable Annuities Sales Tactics

High Commissions Drive Sales

Steep Withdrawal Penalties And Lengthy Surrender Periods

Agents receive substantial commissions for the selling annuities to seniors. Often annuity sales are closed on incomplete information. The consumer may not understand how these complicated contracts work and for seniors this can be especially costly if they need their money back once they sold a contract.  Evans Law Firm, Inc. recommends seniors avoid deferred annuities because these contracts are expensive and complicated and tie up a senior’s money for years.  Sales of unsuitable annuities to seniors violate the law and may constitute financial elder abuse.  Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. §§ 790 et seq. (Unfair Insurance Practices Act) and 10509 (suitability requirement).  Any senior victim 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 Napa County or elsewhere in the Bay Area or throughout the State of California and own a deferred annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Examples Of Unsuitable Annuities

The Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) warn senior consumers to be fully informed about how annuities work before they are sold one.  In a recent Investor Alert released by FINRA and the SEC,[1] the agencies provide several examples of unsuitable annuity sales:

  • A State agency sanctioned an investment adviser for recommending inappropriate annuity products to seniors. Eight residents between the ages of 72 and 87 invested approximately $1.2 million in annuities recommended by an adviser, resulting in commissions of approximately $98,000. These investment products were not suitable for the clients. In fact, one annuity’s producers had a policy against the sale of the product to individuals over the age of 75.
  • FINRA suspended an investment adviser for six months and levied a fine of $28,000 against the adviser when the adviser sold unsuitable variable annuities to seniors.
  • FINRA barred an investment adviser from association with any FINRA-regulated securities firm and ordered the adviser to pay more than $1.5 million in restitution to seniors for unsuitable sales of annuities and mutual funds totaling over $6 million.
  • FINRA fined a financial services firm, $2.75 million for failing to maintain an adequate supervisory system to oversee annuity sales activities of over 1,000 branch managers. working in offices throughout the United States. In a related action, FINRA permanently barred one of those branch managers because the manager recommended unsuitable annuity products to seniors and made misleading statements to customers in correspondence.
  • FINRA fined an investment services firm, $850,000 for supervisory, recordkeeping, telemarketing, and other violations. The firm had failed to implement proper procedures for selling annuities to seniors.

Lengthy Surrender Periods Make Deferred Annuities Unsuitable For Seniors

Perhaps the primary reason deferred annuities are regarded as unsuitable for older consumers is that withdrawals from these contracts incur an insurance company penalty.  This can be an especially difficult situation for seniors who may need their money back for emergencies or increased care costs or other living or medical expenses.  Withdrawals during a policy’s “surrender period” are subject to penalties.  The period can last ten years or more and the charges can be as high as 15% or greater.  For senior consumers this penalty can be particularly harsh.  A senior policyholder may need his or her money back for an emergency or escalating care costs or the like and a stiff penalty that eliminates any gain in the invested money and cuts into principal is a real hardship.  Surrenders are also taxable events such any surrender can result in large tax bills in addition to the carrier’s penalty.

Contact Us

If you are over 60 and live in Napa 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:info@evanslaw.com”>info@evanslaw.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

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

PacLife

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.

[1] You can read the entire Investor Alert here: https://www.sec.gov/spotlight/seniors/elderfraud.pdf

Law Dragons 500 badge Million Dollar Advocates Forum SuperLawyers Badge Best Lawyers Badge Avvo Lawyer Badge

Our Passion For Justice

415-441-8669 888-50EVANS

Hear What Our Clients Have To Say

"I highly recommend Ingrid Evans! She is whip-smart and aggressive, but still client-centered and compassionate."
Posted By: Jackie Ravenscroft

Read More Reviews