Jul 8, 2019 by |

San Francisco and California Annuities and Financial Elder Abuse Attorney: Annuities and Death Benefits

ATTORNEY NEWSLETTER

Complications on Death of Annuitant

Tax Consequences for Heirs

Our annuity and financial elder abuse lawyers advise avoiding deferred annuities because they are complicated, expensive, tie up your money for years, and often do not produce the advertised returns. The complications and adverse tax consequences may not fully arise until the death of the annuitant, and the results can be a significant economic loss for the surviving spouse or heirs. The San Francisco annuity, securities fraud and financial elder abuse attorneys at Evans Law Firm, Inc. represent[1] individuals who have lost retirement savings in annuities, life insurance, and other unsuitable investments.  Most of the victims we represent are seniors or the heirs of senior policy owners.  If an agent or broker has sold you or a family member an inappropriate product such as life insurance or an annuity and you or other policy owner is over 60 and lives in California, call us today at (415441-8669 and we can help.

The basic death benefit offered under a deferred annuity is a guarantee that after your death, the insurance company will pay your beneficiary at least the amount you put in (reduced by whatever you have taken out). But that doesn’t sound like much of a benefit, so most carriers offer an “enhanced” death benefit as well, sold as a policy “rider” for an additional fee.  Enhanced riders go by a variety of names: Enhanced Death Benefit Rider, Accumulator Rider, “Greater Of” Death Benefit, Guaranteed Death Benefit, Return of Premium Rider, and HAV Rider (Highest Contract Anniversary). Whatever the brand name, the fees add up fast. On an annuity offering say a 3% return you might lose half your return when you accept the coverage. Also, death benefits may be reduced or lost when you annuitize (accept the income stream you were promised in the first place), make a withdrawal, cancel, or surrender the contract and likely incur surrender charges and a tax liability as well.

There are tax considerations whenever the annuity owner dies, and you should consult your tax advisor on the tax treatment of any contract proceeds. One of the first complications after death can be in valuing an annuity for estate tax purposes. The issuing carrier will also require the beneficiary to make certain elections regarding the payout.  Each election will have economic consequences, including tax issues.  Like IRAs, inherited annuities are subject to required distributions and again you will need to consult your tax advisor before electing a payout or distribution schedule so you know what your tax bill will be.  If the contract is annuitized the beneficiaries lose control of the asset and receive annuity payouts solely on a schedule determined by the issuer.

Contact Us

If you are over 60 and live in San Francisco or elsewhere in California and have been sold an inappropriate or unsuitable investment product or suffered loss on an annuity or life insurance surrender or replacement or at the death of the contract owner, contact Ingrid M. Evans and the other annuity and financial elder abuse attorneys at the Evans Law Firm for a free review of your policy at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex indexed universal and whole life policies and annuity contracts and cases against large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement.  We also handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Annuities and life insurance produce large sales commissions for brokers but are often inappropriate products for consumers, especially seniors. Leading providers and distributors of life insurance and 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.  Rather, 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

Ameriprise Financial/RiverSource Life Insurance Company

Ameriprise Financial/Securities America, Inc.

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

Bankers Life Insurance and Casualty Company

Berkshire Hathaway Group

Berkshire Hathaway Life Insurance Company of Nebraska

Brighthouse Financial, Inc./MetLife

Citigroup Global Markets, Inc.

Crump Life Insurance Services, Inc.

CUNA Mutual Group/CMFG Life Insurance Company

Delaware Life Insurance Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

Genworth Financial, Inc.

Genworth Life and Annuity Insurance Company

Genworth Life Insurance Company

Global Atlantic Financial Group/Forethought Life Insurance Company

Guardian Life Insurance Company

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

Merrill Lynch Life Agency Inc.

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

Minnesota Life Insurance Company

National Life Group

National Life Insurance Company/Equity Services, Inc.

National Western Life Insurance Company

Nationwide Life Insurance Company

New York Life Insurance Company

North American Company for Life and Health Insurance

Northwestern Mutual Investment Services, LLC

Northwestern Mutual Life Insurance Company

Northwestern Mutual Wealth Management Company

Oxford Life Insurance Company

Pacific Life Insurance Company

Principal Financial Group

Prudential Life Insurance Company

Raymond James Insurance Group

Reliance Standard Life Insurance Company/Tokio Marine Group

RiverSource Life Insurance Company/Ameriprise Financial

Securities America, Inc./Ameriprise Financial

Security Benefit Group, Inc.

Security Benefit Life Insurance Company/Guggenheim Partners

Security Investors, LLC

The Standard Life Insurance Company

Symetra Financial Corporation

Symetra Life Insurance Company

Transamerica Life Insurance Company

The United States Life Insurance Company in the City of New York

 Unum Life Insurance Company of America

 USAA Life Insurance Company

The Variable Annuity Life Insurance Company

 Voya/Reliastar Life Insurance Company

Wells Fargo Advisors

Western & Southern Financial Group

The Western & Southern Life Insurance Company

World Financial Group Insurance Agency, Inc.

[1] While we do not provide tax or investment advice at Evans Law Firm, we do represent consumers who have suffered losses from inappropriate investments sold to them by agents and brokers, and other misconduct.

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