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May 25, 2022 by |

San Diego Financial Elder Abuse And Annuity Attorney: How Deferred Annuities Work

ATTORNEY NEWSLETTER

Always Get A Second Opinion First 

Fees And Withdrawal Penalties

Deceptive Sales Tactics

The basic premise of a deferred annuity is this: you pay a premium to an insurance carrier now for an income stream to be paid to you many years in the future. But deferred annuity policies are never so straightforward.  In fact, they are long and complicated insurance policies running up to 100 pages or more and are filled with technical jargon and pages and pages of actuarial tables.  Insurance agents are paid significant sales commissions to sell these complicated products; there are annual fees and subaccount fees and penalties for withdrawals. Evans Law Firm, Inc. generally recommends against certain types of deferred annuities for older consumers because these complex, expensive insurance policies may tie up a senior’s money for years and impose significant penalties if you need your money back.  At a minimum, always get a second opinion from a professional with nothing to gain from a sale.  Sales and recommended surrenders and exchanges of deferred annuities to seniors may constitute financial elder abuse claims under Cal. Welf. & Inst. Code §§ 15610.30 (definition of financial elder abuse) and 10509 (suitability requirement). Questionable sales tactics, like unannounced home visits or falsified applications, are illegal.  See, e.g., Cal. Ins. Code § 790 et seq. (Unfair Insurance Practices Act).  If you are over 60, and live in San Diego or elsewhere in California and would like us to review your annuity contract, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Annuities Are Long-Term Contracts

Most annuities are long term contracts and should not be considered for short-term purposes. Nor should a senior allow an agent to sell them an annuity without realizing that the annuity will tie up their money for a long time and any withdrawal will be subject to penalties and tax liabilities. Be aware that some companies may advertise high interest crediting rates and bonuses on their annuity products. However, depending upon the terms of the annuity contract, the advertised interest and/or bonus may not be available to the annuitant if the contract is surrendered for cash. In other words, some contracts may credit and accumulate interest and/or bonuses to the policy’s annuitization value (not the cash value) and the annuitant may be required to receive policy benefits over a long period of time in order to receive the advertised high interest and/or bonuses. This is another reason it is very important for consumers to carefully read and understand the terms of the annuity contract prior to purchasing the policy.

Beware of Deceptive Or High-Pressure Sales Practices

Annuity sales to senior citizens have significantly increased in recent years. However, as annuity sales have risen, so has a sense of confusion among consumers. This is due, in part, to questionable or deceptive sales practices employed by a few companies and agents looking to take advantage of uninformed consumers. It is extremely important when considering whether or not to buy an annuity, to take the necessary precautions in order to make an informed decision that is best for you.

Watch for the following red flags, which serve as warnings of possible deceptive sales practices:

  • High-pressure sales pitch. If a particular group or agent has contacted you repeatedly, offering a “limited-time” a deal that makes you uncomfortable or aggravated, trust your instincts and steer clear.
  • Quick-change tactics. Unscrupulous agents will try to prey on your “ time fears.” They may try to convince you to change coverage quickly without giving you the opportunity to do adequate research.
  • Unwilling or unable to prove credibility. A licensed agent will be more than willing to show adequate credentials.

Remember, if it seems too good to be true, it probably is! 

Contact Us

If you are over 60 and live in San Diego or elsewhere in California and would like a free review of your policy contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669 (or toll free at 1-888-50EVANS), or by email at <ahref=”mailto:info@evanslaw.com”>info@evanslaw.com</a>.

Some major issuers and distributors of fixed, variable and fixed indexed deferred annuities in California are listed below.  We are not in any way suggesting that any of these carriers or distributors has done anything wrong.  The list is provided solely as a reference for our readers.

AIG/American General Life Insurance Company

Allianz Life Insurance Company of North America

American Equity Investment Life Insurance Company

American General Life Insurance Company/AIG

American International Group, Inc. (AIG)

American National Life Insurance Company

Athene Annuity & Life Assurance Company

Athene Annuity and Life Company

Athene USA

Aviva Life Insurance Company

AXA Equitable Financial Services, LLC

AXA Equitable Life Insurance Company/AXA US

AXA Advisors, LLC

Brighthouse Financial, Inc./MetLife

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Genworth Financial, Inc.

Genworth Life and Annuity Insurance Company

Genworth Life Insurance Company

Guggenheim Partners, LLC

Guggenheim Partners/Security Benefit Life Insurance Company

 ING USA Annuity and Life Insurance Company

 Jackson National Life Insurance Company

John Hancock Life Insurance Company

Lincoln Benefit Life Company

Lincoln Financial Group

Massachusetts Mutual Life Insurance Company

Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.

Minnesota Life Insurance Company

Nationwide Investor Services Corporation (NISC)

Nationwide Life and Annuity Insurance Company

Nationwide Life Insurance Company

New York Life Insurance Company

Northwestern Mutual Investment Services, LLC

Northwestern Mutual Life Insurance Company

Northwestern Mutual Wealth Management Company

Pacific Life & Annuity Company

Pacific Life Insurance Company

PacLife

Security Benefit Corporation

Security Benefit Group, Inc.

Security Benefit Life Insurance Company/Guggenheim Partners

Security Investors, LLC

Security of Denver Life Insurance Company/Voya

Transamerica Life Insurance Company

Voya Financial Advisors

Voya/Reliastar Life Insurance Company

World Financial Group Insurance Agency, Inc.

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"We contacted Evans Law Firm when we were unable to collect on a Long-Term Life Insurance policy for an elderly family member. Ingrid responded almost immediately with an offer of a free consultation. I was immediately impressed with her passion for justice!!"
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