Many people purchase annuities as part of their long-term financial plans, hand-in-hand with life insurance and long-term care policies. This type of planning has become increasingly more complex, with a number products—stocks, bonds, insurance policies, high-yield accounts, etc.—available to offer more sophisticated ways to save for an increasingly expensive future. The average policyholder often relies on the financial savvy of an advisor or insurance agent to navigate these products and point them in the right direction.
There are many types of annuities available today, including variable, fixed and indexed policies. While these policies may fit perfectly into some financial plans, others may find themselves paying more for an annuity without seeing any of the benefits. When someone is sold an unsuitable annuity policy, or the facts about the policy are misrepresented in such a way to conceal its true investment purposes and risks, chances are the policyholder has been victimized by annuity fraud.
Most of the recent annuity fraud in the news has involved variable annuities in which an insurance company guarantees a minimum payment to its policyholders after the end of the annuity’s accumulation stage. Any income payments made after that will vary, depending on how the portfolio is handled and how well it performs.
Deferred and fixed annuities are also subject to fraudulent tactics. In deferred annuities, the payments are delayed over a specific period until the policyholder chooses to receive them. These earnings are only taxed once they are withdrawn.
Genworth Life and Annuity Insurance Company
As annuities increase in popularity, many insurance companies are reaping the benefits. The commission for a mutual fund is in the 2-4 percent range, while the commission for a variable annuity is significantly higher—7-10 percent. The stockbroker or agent who sells an annuity is earning much more and receiving additional financial perks over the course of the policy’s timeframe.
For this reason, many companies push the sale of annuities to their clients, sometimes without fully taking into account whether this product will be suitable for each individual client, especially older clients who may not have as much time to gamble on a long-term annuity. California annuity fraud attorneys have been investigating potential claims involving annuities sold through Genworth Life Insurance Company. Genworth sells annuities under both Genworth Life and Annuity Insurance Company, and Genworth Life Insurance Company.
Fraud Victims Should Contact an Attorney
At the Evans Law Firm, Inc., we help people who have been tricked into purchasing unsuitable annuities or life insurance policies by their agent or stockbroker. An annuity that is not in line with your financial goals or lifestyle can put your future life plans in jeopardy, to include your retirement or inheritance and insurance coverage for your loved ones. If you feel you have been a victim of annuity fraud, get in touch with a California insurance fraud attorney at our office today. We are available online at www.evanslaw.com or by phone at 415-441-8669 or toll free at 888-503-8267.