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Jul 14, 2016 by |

San Francisco Annuity Fraud Attorney: Stability


Are annuities as stable as brokers claim?

Annuity companies spend a great deal of time, energy, and marketing dollars to build the reputation of their product as a rock-solid investment. They’ve banked on this in their campaign to sell indexed annuities, products that make the impossible claim of delivering risk-free market rate returns, and they count on the reputation of annuities to convince hesitant buyers. However, despite their reputation, the bedrock underlying traditional annuities isn’t as firm these days, as convoluted variations of the annuity model become more widespread. These days, annuity rates are far more vulnerable to trends sweeping the financial markets, as the recent upheaval following the “Brexit” demonstrates.

Indexed annuities are an increasingly popular product which claim to allow policyholders to get market rate returns on their annuity investments. They do this by tying the returns to stock market indices, from which they derive their name. However, this also means that when these indices, such as the S&P 500, take a beating, so do the incomes of seniors who have invested their life saving in these products. Although many of these products have a guaranteed minimum return, it is often significantly lower than one would expect from a traditional annuity, and for retires counting on a steady income stream, these changes can wreak havoc on finances. Our San Francisco Annuity fraud attorneys have seen numerous cases where a downturn in the market left seniors struggling to get sufficient funds from their annuities.

Many seniors have been convinced that an annuity is the cornerstone of a solid retirement plan. But in fact, the stability of annuities may be at an all-time low. Between the complex investment and return schemes, the hidden costs and fees, and the tortuous specifications and requirements that are built into the policy, many financial advisors consider annuities to be among the most complicated and misunderstood products on the market. And as anyone can tell you, when dealing with your life savings, it’s best to stick to investments you can understand.

It’s not uncommon to see drastic changes in their annuity returns, or to incur penalties and fees after being told there was no risk. The annuity sales model that was in place until recently didn’t require brokers to act in the best interest of their client, but instead incentivized selling complex, expensive products that might not suit the needs of the senior. For retirees that are more interested in having low-risk investments than in playing the stock market with their life savings, the trend in annuity policies has not been advantageous.

Some of the major annuity and life insurance providers are:

If you or a loved one has been the victim of an improperly sold or administered annuity policy, the San Francisco annuity fraud attorneys at Evans Law Firm can help. We have experience handling annuity and life insurance cases against large multinational companies, and can advise seniors and their family as to their rights in cases involving fraud, elder abuse, and guide cases through a civil trial or toward an equitable settlement. We can be reached for a free initial consultation at (415) 441-8669, or by email at

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