Indexed Annuities Are Not Index Fund Investments
Indexed Annuity Policy Limitations On Returns
Caps, Participation Limits, Annual Fees And Surrender Charges
Insurance agents sell indexed deferred annuities to seniors as “safe” investments for income later in life. But rather than take the selling points at face value, seniors need to dig a little deeper to understand how these indexed annuities operate in real life. Bother the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) provide some resources, discussed below, to help senior consumers better understand these products. Our annuity and financial elder abuse litigators have seen senior consumers harmed by these complicated products and want to share some of those agencies’ information with you. We can represent you if you’re over 60 and have suffered a loss due to cancellation, replacement, full or partial surrender, or high fees connected with an indexed annuity. Call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Taking a Deeper Look
Both the SEC and FINRA have recently focused attention on indexed annuity products and the takeaway from both agencies is that senior consumers should:
- Understand the complexity of these products. Indexed annuities are complicated insurance policies, not straight fund investments.
- Be mindful of surrender penalties, which can last anywhere from 5-15 years and be as high as 15% on money withdrawn.
- Understand that your return on an indexed annuity will be capped at a set rate lower than the true return on your chosen index, be subject to a “participation rate” that further limits your return to 80-90% of an index return, and subject to administrative and subaccount fees that will further erode your return.
- Understand the indexed annuities can expose investors to investment loss. Annuities are insurance products and not bank investments insured by the FDIC – even if it’s a bank selling you the indexed annuities. They are not insured like CDs.
- Understand how the return on the proposed indexed annuity is calculated and the extent to which price declines in the index can affect the performance of the indexed annuity.
- Understand that dividends on the stocks in your chosen fund are excluded so your gains, if any, will not include the benefit of dividends as your return on a direct investment in the selected fund would.
How Evans Law Firm Can Help You
Our litigators have experience representing senior policyholders who have lost money on surrenders, cancellations, replacements or exchanges of indexed annuities or as a result of the fees or penalties imposed under the contracts. We do not provide investment advice or tax advice and urge you always to seek a second opinion from an investment professional and consult your tax advisor before letting an agent sell you any type of deferred annuity, including an indexed contract. If you have already purchased a policy, and experienced a financial loss as a senior that’s where our attorneys may be able to help.
Ingrid M. Evans and the other annuity and financial elder abuse attorneys at Evans Law Firm have years of experience representing senior consumers against insurance agents and carriers who have sold unsuitable policies, failed to disclose important information or otherwise caused senior consumers to lose money on deferred annuities. If you are over age 60 and have lost money as the result of an annuity transaction or surrender, you can reach Ingrid and the other Evans Law Firm attorneys at (415) 441-8669 (or toll free at 1-888-50EVANS) or by email at <ahref=”mailto:email@example.com”>firstname.lastname@example.org</a>..
Some significant 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
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
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.
 You can read the SEC Bulletin on indexed annuities here: https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_indexedannuities. FINRA offers information on indexed annuities here: https://www.finra.org/investors/insights/complicated-risks-and-rewards-indexed-annuities.