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Disclosures for Annuity Sales

Annuities are sold by major insurers, including MetLife, Genworth Life Insurance Company, Prudential Life Insurance Company, TransAmerica Life Insurance Company, and John Hancock Life Insurance Company.  Annuities involve paying a lump sum amount of cash to an insurance provider and receiving regular income payments for a set period or for the remainder of your life. There are different kinds of annuities, including immediate annuities which begin paying out right after purchase as well as deferred annuities which begin paying out at a designated time in the future.

Annuities can be fixed or variable, and they are very popular among retirees who want a fixed stream of income. However, not all annuities are created equal and there may be unexpectedly high fees or other problems with some annuities offered by insurers.

Consumers are supposed to be provided with disclosures by brokers and insurers so they will understand exactly what they’re getting when they buy an annuity, but sometimes this does not occur. San Francisco securities fraud lawyers can help those who weren’t provided with proper disclosures or who otherwise faced losses due to bad business practices on the part of annuity sellers and providers.

Annuity Issues

Both deferred and immediate annuities must provide information to consumers about many aspects of annuity ownership and of the particular annuity terms.  Often, policyholders feel that they are not given sufficient information about fees, charges, and other hidden costs for annuity owners. These include a surrender charge, which may start at around seven percent and go down each year and is imposed when the annuity is cashed in during a specified time period.

Also, many annuities have liquidity fees. Liquidity means being able to access the value of the annuity. In many cases, a liquidity fee is charged so owners of annuities pay penalties for taking the money out early.  This liquidity fee may come on top of tax penalties which could be charged for withdrawing money before the age of 59 ½ on certain qualified annuities, such as those held in IRAs.

Cancellation and refund disclosures have to be printed on the front of the policy jacket and on every individual annuity contract, and all annuities and insurance policies must be cancellable within 30 days if the consumer changes his mind about the product.  If the purchaser is 60 or older and cancels the policy, a prorated premium must be offered.

While disclosure requirements are designed to protect purchasers, many people still do not fully understand the terms of an annuity or of how this type of investment can tie up funds. Consumers need to read disclosures carefully and should consider getting legal help. If proper disclosures are not provided, those who purchased annuities and suffered losses should consult with Evans Law Firm, Inc. for help with your situation. Contact us at (415) 441-8669 or online at

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