Consumers Should Carefully Review Their Annuity Purchases From Transamerica Life Insurance Company
Deferred annuities are complex products that have hidden fees and costs. Consumers should carefully review the policies before finalizing any purchases.
What are Deferred Annuities?
Deferred annuities include both fixed and indexed annuities. In a fixed annuity, the insurance company makes payments in fixed amounts to the policyholder for the duration of their contract, which typically lasts for the policyholder’s lifetime. In these annuity policies, the insurance company guarantees the earnings and the principal.
What is an Indexed Annuity?
An indexed annuity yields returns on the policyholder’s contribution that are determined by a specific equity-based index. These annuity policies are dependent on the contract terms and can be purchased through an insurance company. In most cases, the insurance company will offer a guaranteed minimum return, but the yields will depend on stock performance, and could fluctuate, increasing the risk of loss. There are also caps placed on the maximum interest amount and deductions for fees.
What are Variable Annuities?
An annuity is an insurance policy that is backed by a brokerage firm, and sold to a consumer by a stockbroker. Annuities involve securities purchases and trades, and generate income for the policyholder based on the stock trading that goes on behind the scenes. A policyholder pays for his or her annuity either in one lump sum, or fixed payments over time, and in return, the insurance provider will make guaranteed payments to the consumer, per the agreement reached in their contract. Often, annuities also have tax-deferment options and death benefits.
Transamerica Life Insurance Company designates itself as “one of the world’s leading financial services companies,” and provides clients with a variety of life insurance products to build a financial portfolio. These products, which include whole life insurance, term life insurance, accidental death, variable life policies and annuities are available to consumers who want to invest in their futures by providing security and financial peace of mind for themselves and the family members who may survive them.
Transamerica, which is owned by Aegon, N.V., calls its team the “Tomorrow Makers” and promises consumers security and financial strength that will create “a tomorrow worth looking forward to.” As part of this vision, the company offers consumers variable annuities that can be tailored to each client’s specific needs and financial worth. Consumers should carefully review any annuity purchase before making a purchase. Many consumers do not read the fine print and then are stuck in a long term investment, with high surrender charges that they can’t get out of.
Through Transamerica, consumers can utilize deferred (fixed and indexed) and variable annuities as part of their financial planning strategy. The company’s website states that these “long-term investment products” can be provided in a variety of ways and an interested consumer can discuss which options are best with one of the company’s advisors to get started.
Annuities and the SEC
In purchasing a life insurance policy, the consumer plans to pay towards a financial safeguard that he or she will receive later in life or will be paid upon death. An annuity is similar, but because it is based on the purchase of securities, its value fluctuates, unlike a traditional life insurance policy. Its regulations are also enforced by the Securities and Exchange Commission (SEC).
In a recent case, the SEC settled with Transamerica for claims the company failed to properly handle fees owed by their clients with annuities. The SEC also charged the company with using conflicting policies for determining clients’ breakpoint discounts and fees. The SEC investigation uncovered over 2,300 clients who were owed reimbursements as a result of these charges. As part of the settlement, Transamerica agreed not to commit any future violations and to reimburse their clients.
At the Evans Law Firm, Inc., we represent consumers and policyholders whose insurance companies have failed to uphold their portion of contracts for life insurance and annuity policies, or have failed to institute fair business practices for their clients. If you believe your annuity policy is being mishandled, call our annuity fraud attorneys in San Francisco today. the Evans Law Firm, Inc. is available by phone at 415-441-8669, toll-free at 888-503-8267, or by email at firstname.lastname@example.org. We also have office in Southern California, Los Angeles, and Sonoma County.