Skip to Content
415-441-8669 | TOLL FREE: 888-50EVANS

PHONE: 415-441-8669 | TOLL FREE: 888-50EVANS

Nov 15, 2022 by |

San Francisco Bay Area Annuity And Financial Elder Abuse Attorney: Why Deferred Annuities Are A Poor Choice For Seniors


Complex And Expensive Insurance Policies

Deceptive Sales Practices

High Commissions, Fees And Policy Expenses

A deferred annuity is an insurance contract between you and an insurance company. You buy the annuity by making one or more premium payments to the insurance company. The insurance company promises to make income payments to you in the future. Annuities usually have commissions and other fees that cut into your investment, and typically earn less money than stocks and bonds. Evans Law Firm, Inc. generally recommends against deferred annuities, including fixed indexed annuities, for older consumers because sales commissions and annual fees on these policies are high; the return on your money rarely meets expectations (we have seen contracts produce zero returns even in strong markets); and you are penalized for any withdrawal, effectively tying up your money for years.  Once you’re sold an annuity it is very expensive to get out.  If you want to switch investments or just access your own money when you need it, you will pay a penalty. Although we do not give tax advice, tax issues are important when it comes to annuities and you will always want to consult your own tax advisor beforehand regarding any annuity transaction because all annuity transactions have tax consequences. If you are over 60, and live in the San Francisco Bay Area or elsewhere in California and have experienced an economic loss as a result of the sale of an unsuitable annuity or other investment product, including a fixed indexed annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS)

Do Not be Pushed into Buying an Annuity

  • An agent should not push you to buy an annuity. That’s illegal.
  • Do not get a reverse mortgage so you can buy an annuity.  It is illegal for an agent to sell you an annuity with proceeds from a reverse mortgage.
  • The law says that anyone who offers to sell you an annuity must give you honest and accurate information on the terms and rules of the annuity, and its costs and benefits.

Costs And Limitations on Your Return

Annuity carriers impose withdrawal penalties, commonly called surrender charges, on amounts you withdraw from an annuity while the annuity is in the “surrender period” before annuity payments begin.  Surrender periods can last up to ten or more years under some contracts and the withdrawal penalty may be 10% or greater on withdrawals made in early years of a contract.

Participation rates or rate caps act to limit your return:

  • Participation rate:Let’s say the S&P 500 grows by 10% in a year and your contract has a 60% participation rate. The annuity company will then take that 10% growth and give you 60% of it, which would equal 6%.
  • Rate cap: In this scenario, let’s assume the S&P 500 grows by 8% over a year, and your contract has a 5% rate cap. The result would be that your contract receives a 5% return, since the rate cap limits how much your contract can earn.

Policy Expenses Add Up

Layers of fees obscure an annuity’s real cost and reduce how much it pays out.  The following are common annuity expenses you should be aware of:

  • Mortality and expense fee
  • Administrative fee
  • Contract maintenance charge
  • Subaccount fee
  • State premium tax (2.35% in California paid by the carrier but passed on to consumers through insurance rates)
  • Investment transfer fee
  • Principal protection
  • Inflation protection/cost-of-living adjustment
  • Long-term care rider
  • Lifetime income rider

Contact Us

If you are over 60 and live in the San Francisco Bay Area or elsewhere in California and have lost money on a deferred annuity or indexed universal life insurance contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or toll free at 1-888-50EVANS, or by email at <a href=””></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

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


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.

Law Dragons 500 badge Million Dollar Advocates Forum SuperLawyers Badge Best Lawyers Badge Avvo

Our Passion For Justice

415-441-8669 888-50EVANS

Hear What Our Clients Have To Say

"I contacted Attorney Ingrid Evans for advice about a financial elder abuse case. She was extremely knowledgeable, bright and informative. I highly recommend her. I am an attorney myself, and know when I am talking to a another excellent attorney."
Posted By: Terry Kolkey Attorney

Read More Reviews