Deferred Annuities by Lincoln Benefit Life Company – Be Cautious When Purchasing Deferred Annuities
Most annuity policies contain surrender charges or penalties that often times are not prominently disclosed. These surrender charges or penalties will tie up the policyholder’s money for a period of time, called the deferral period, until the surrender charges are no longer present. Sometimes surrender charges can lock up the consumer’s money for a period of 10 to 20 years or more. This can be devastating if the policyholder needs to access their money for healthcare or other necessities and instead face a substantial penalty or withdrawal charge.
One seller of deferred annuities is, Lincoln Benefit Life Company, or LBL, was acquired in April of 2014 by Resolution Life, in a move that promised its existing clients stability and continued excellence. Resolution Life is a specialty life insurance company in the United States that offers clients a variety of long-term financial planning products. The company website highlights the merger and promises to continue their practice of “delivering sustainable financial results within a well-controlled risk framework.”
Along with standard life insurance policies, LBL also offers its clients deferred annuity policies, in which the company withholds—or defers—payments to the policyholder until he or she chooses to receive them. These payments can be made in installments or as one lump sum. The policyholder begins by making payments or investments into the policy and then elects when to receive the income from the annuity. California annuity fraud lawyers warn to be careful of all annuities purchased, including those from Lincoln Benefit Life Company. Annuity fraud lawyers recommend you get a second opinion from your tax advisor or an independent financial planner before purchasing a deferred annuity so that you understand all the risks and benefits.
When your deferred annuity and/or life insurance policy changes ownership, you want to be sure any changes are discussed upfront between you and your insurance provider so that you know what to expect under the new ownership. Surprises in insurance policies and annuities typically crop up because the consumer is unaware of what has changed after their insurance company has changed hands.
This misunderstanding could be the result of misreading pertinent information, updates being lost in the mail or deliberate misrepresentation or fraud for which the company might be subject to legal responsibility for the negative results sustained.
Changes to your policy could include any of the following:
- Effective date changes
- Terms shortened or lengthened
- New fees or costs assessed
- Premium increases
- Payout amount or date adjustments
- Requirements to continue holding the policy
These changes can have a drastic impact on the protection your policy provides you and your loved ones. If you are unaware that a change is being made, you could continue to pay into your existing insurance policy, relying on the contract you signed when you first bought the policy. But when something happens—you pass away or are unable to work and need to tap into these funds—you may be unable to count on this financial safety net.
Resolution Life’s website outlines the details of their acquisition with LBL for policyholders, stating, “For the majority of policyholders very little will change. Resolution Life and Allstate Life Insurance Company have agreed to a Transitional Agreement whereby Allstate will continue to provide service to the policyholders for 12-to-18 months. After the transition period, policy service and administration will be provided by industry-leading third-party administrators under the direction of LBL’s management. Before any changes are made, LBL will write to brokers and policyholders.”
It is important to review these documents when insurance companies send them out, especially after your policy ownership has changed or been acquired by another company.
Call an Attorney
If your policy had surrender charges, penalties, withdrawal charges or you become aware of unexplained changes to your insurance policy or if your policy has recently changed hands to a new company, you may need to discuss these changes with an experienced insurance fraud attorney in California. At the Evans Law Firm, Inc., we represent clients whose financial security has been jeopardized due to insurance fraud or annuity fraud. To get in touch with an attorney, call us at 415.441.8669, toll free at 888.503.8267, or email us at email@example.com today. We are here to help you maintain your financial stability, and we have offices in Southern California, Sonoma County, and Los Angeles.