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Athene Life Insurance and Annuity Company

Life Insurance Risks

Life insurance has changed a great deal over the course of its existence, from solid policies with minimal potential for loss or risk, to the gambles and stockbroker options that we have today. But even now, a basic life insurance policy is expected to be plain and simple—safe investments with dependable returns (mostly bonds), benefits paid out at regular intervals and in regular amounts, and prudent investments made with any excess profit. These policies are designed to protect the policyholder and have been strictly regulated for the past 150 years.

These standards lead policyholders to believe that for every dollar they invest, there is an associated asset that secures their insurance policy. But in today’s insurance world, that’s not always the case. Life insurance companies today are sitting on millions of dollars in reserves, money that is supposed to go to policyholders whenever their contracts dictate, or upon their death. But as a recent investigation into Apollo Global Management and Athene Life Insurance and Annuity Company uncovered, these funds can be used elsewhere—and often are—without the policyholders’ knowledge or consent.

Athene Life Insurance and Annuity Company

In 2013, Apollo Global Management offered to bail out the casino company Caesars and Harrahs, as the company was going bankrupt. Apollo planned to use the cash garnered by their affiliate life insurance division, Athene, in premium payments made by insurance policyholders. As regulated by the state insurance commissioners, these premiums are supposed to be used to make prudent investments on behalf of the company’s clients, without the gambles associated with more risky investment strategies, such as annuities.

After Athene volunteered its funds, the operating company in charge of most of Caesars went under. The impact that this loss will have on Athene’s life insurance policyholders may not be felt immediately, but it already speaks volumes about the changing life insurance landscape and the risks policyholders may face without even knowing about them.

Many insurance companies want to tweak the principles of standard life insurance policies and utilize the reserves of cash they are holding in premium payments. These reserves could be invested into high risk portfolios in which stockbrokers hope to receive high returns. They could also be used to pay shareholder dividends.

Annuities are prime policies for companies to use the premium payments. In an annuity, the policyholder pays the premium up front and then waits to receive payments, sometimes until retirement, a predetermined age or in small chunks over an extended period of time. During the contract period, the premium payment is held within the company and while it sits there, the insurance company may be using it for other purposes and the investor could be losing out. If these funds are mishandled, as in the case of Athene Life Insurance and bankrupt Caesars, policyholders may be negatively impacted with delayed returns, or even worse — no returns at all.

At the Evans Law Firm, Inc., our attorneys represent clients who have been cheated or defrauded by their insurance company through their life insurance or annuity policies. To discuss your case, contact one of our San Francisco annuity fraud attorneys for a consultation today at 415-441-8669 or online at

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