Skip to Content

PHONE: 415-441-8669 | TOLL FREE: 888-50EVANS
Free Initial Consultation Available

Oct 11, 2021 by |

Napa Financial Elder Abuse Attorney: Disadvantages Of Deferred Annuities Over Direct Mutual Fund Investments

ATTORNEY NEWSLETTER

Disadvantages Of Deferred Annuities

Compare To Other Investments

Withdrawal Penalties And Taxation

As a significant part of our financial elder abuse litigation, Evans Law Firm, Inc. has represented older consumers lose money on deferred annuities as the result of high sales commissions, annual fees and rider fees; returns on premiums that are considerably lower than advertised; and, penalties incurred on withdrawals.  For those reasons we recommend that seniors avoid deferred annuities.  Annuity surrenders result in withdrawals penalties but also have tax consequences.  We do not provide tax advice at Evans Law Firm, but we have seen older consumers faced with large tax bills upon a surrender of a contract. Sales of unsuitable deferred annuities to seniors may also constitute financial elder abuse under Cal. Welf. & Inst. Code § 15610.30 and senior policyholders may have financial elder abuse claims against agents and carriers. If you are over 60, and live in Napa or elsewhere in the Bay Area or anywhere in California and have experienced an economic loss as a result of the sale of an unsuitable annuity or other investment product, including 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. 

Disadvantages Of Deferred Annuities Versus Other Investments

Commissions. Many annuities are sold by brokers who collect high commissions for doing so, with some commissions as high as 10%!  If you don’t see a commission fee broken out for you, that doesn’t mean it’s not there. It may simply be baked into the annuity’s operating costs, for which you’re charged.

Surrender Penalties. You can add and remove money from lots of investment accounts, but when you buy an annuity, that money is generally gone. You will be able to get your money back if you pay a hefty “surrender” fee.  Surrender fees can be as high as 15% and the surrender periods can last 10 years or more.  Moving your money out of mutual fund investments will not be subject to these kind of withdrawal penalties.

Annual Fees.  Most annuities charge annual fees. It’s not unheard of to be paying between 2% and 3% per year. For context, managed mutual funds will often charge around 1% to 1.5% per year, while ETFs (exchange-traded funds) will often charge 0.50% or less. If your annuity is averaging a 7% annual return but charging you 3% per year, you’re losing a lot of ground. Keep in mind, too, that on a $100,000 investment, a 3% charge amounts to a whopping $3,000 — per year!

Contact Us

If you are over 60 and live in Napa, San Francisco or elsewhere in the Bay Area or throughout California and have lost money on a deferred annuity or indexed universal life insurance contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Ingrid will pursue all remedies available to you against all parties responsible, including restitution (getting your money back), extra damages (to punish the fraudulent conduct) and awards of attorneys’ fees and costs to the senior forced to bring an action against the wrongdoers. 

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.

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 and her law firm. If you are looking for an attorney who is a great listener, a compassionate advocate and who really knows the law, this should be your first stop."
Posted By: Phil Blank

Read More Reviews