Deferred Annuities or Fixed Annuities are types of long-term investments that often prohibit or preclude withdrawals for at least 10-20 years. Deferred or fixed annuities often also charge excessive fees for early withdrawal of funds. When someone purchases this sort of annuity, he or she deposits a premium in order to receive a “rate of return” that is usually guaranteed for the first year. After the first year, the minimum guaranteed rate of return usually diminishes and stays low over the term of the annuity. One distinguishing factor of deferred and fixed annuities from others is the delayed payment of the purchaser’s money.
In addition, many of these annuities have policies and contracts that are purposefully confusing. This unfortunately makes it easy for financial professionals or agents to gloss over or even omit the full technical details about the different hidden charges and fees.
More and more, the increased sale of annuities to seniors and the elderly is becoming encouraged by financial professionals and annuity-issuing insurance companies. Many senior citizens are lured in by the prospect of stable and dependable returns and “safe” investments, but the truth is that many long-term investments like annuities are generally not suitable nor profitable for elders. This is because elders may frequently need unanticipated instant access to their money for any number of bills, medical situations, or emergencies. Because deferred and fixed annuities require the elder to wait for prolonged periods of time before accessing their money, elders who purchase these annuities may not have the chance to access or use their funds when they need them. Perhaps most tragically, many annuities do not allow payouts or withdrawals until well past the elder purchaser’s life expectancy.
The Evans Law Firm is committed to preventing annuities fraud and aiding its victims through litigation against institutions like insurance companies, banks, and agents who deceptively sell annuities and other inappropriate long-term investments to elder adults and seniors.
What Makes Annuities Inappropriate For Seniors?
As types of insurance contracts, annuities are generally structured to start providing a return on investment after a long period of time, which can be up to 10-20 years. Several of these annuities – particularly deferred annuities – will limit a purchaser’s access to their initial investment payment for a significant period of time. Should the annuitant wish to access his or her money during this time period, he or she may be subjected to enormous and previously unknown surrender charges. These scenarios effectively trap seniors in deferred annuities: they must either go without their money or pay exorbitant fees in order to access it. This issue can be particularly devastating to seniors in the event of unanticipated medical or financial emergencies.
Another fact about annuities is that their sales generally yield significant commissions to the agents who sell them through banks or sometimes-disingenuous “estate planning seminars.” This results in an increased motivation for the agent to sell annuities, and may constitute a conflict of interest with respect to annuity sales to the elderly. Because of this potential conflict of interest, insurance companies and industries are bound to carefully match their annuities to the needs of individuals over the age of 60. Past lawsuits have alleged that Defendants knew or should have known about the unsuitability of the insurance products that had been targeting and sold to seniors.
What Types of Senior And Elder Financial Annuity Lawsuits Exist?
Lawsuits have been brought alleging the targeting of elders by certain annuity-issuing banks and insurance companies. Further allegations include the use of scare tactics to pressure elders and seniors into moving their life savings into deferred or fixed annuities, which can render those savings inaccessible to the senior for 10-20 or more years (even if an emergency arises); may charge exorbitant surrender fees and severe tax penalties; and can leave complex estate problems after the annuitant’s passing. Deceptively tempting sales pitches to elders often frame annuities as “guaranteed” and “safe,” likening them to having money in the bank that yields a higher return. Complicated and confusing language in the annuity policy and contract can hide the tremendous charges and fees incurred should the senior wish to withdraw money before the pay-out period.
These lawsuits have sought and seek the following remedies: to prohibit the sales of inappropriate annuities to elders; injunctive relief; restitution to the elder victims; disgorgement from Defendants of the profits reaped at the expense of the victims; treble, double, punitive, and compensatory damages; attorneys’ fees, penalties, and costs of suit.
Who is Eligible for Representation in Senior and Elder Financial Annuity Abuse Lawsuits?
The annuity financial abuse lawsuits are designed to be class action suits. Any individual who was 60 years of age or older when he or she purchased an annuity from a bank or after an estate or “financial planning seminar” could be eligible to bring or join a lawsuit.
The Evans Law Firm specializes in elder abuse litigation in California. If you believe that you or a loved one have been the victim of financial exploitation, contact the lawyers at the Evans Law Firm toll free at 1-888-50EVANS for a free and confidential consultation, or email firstname.lastname@example.org
Lawsuits Have been Brought Against the Following Companies In the Past:
Lawsuits have been brought against the following insurance companies and banks: ; AIG Sun America; Allianz Life Ins. Co.; American Equity; American International Group; American National Insurance Company; Bank of America; Conseco Life Ins. Co.; Fidelity and Guaranty Life Insurance Company; Jackson National Life Insurance Company; National Western Life Ins. Co.; Standard Life Insurance Company of Indiana.
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The following annuity companies have sold deferred annuities to senior citizens:
- American International Group
- American General
- Allianz Life Insurance Company of North America
- American Equity Life Insurance Company
- American Investors/AVIVA
- American National Insurance Company
- Conseco Life Insurance Company
- Fidelity & Guaranty Life Insurance Company
- Equitrust Life Insurance Company
- Great American Life Insurance Company
- Jackson National life Insurance Company
- Midland National Life Insurance Company
- National Western Life Insurance Company
- Prudential Life Insurance Company
- Standard Life Insurance Company of Indiana
- Standard Life Insurance Company
- Sun Life Insurance Company
- Transamerica Life Insurance Company