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Jan 9, 2018 by |

San Francisco County and California Annuity Attorneys: Fixed and Variable Annuities

ATTORNEY NEWSLETTER

Problems with Annuities as Savings Vehicles

Are Fixed or Variable Annuities Right for You?

Insurance salesmen pitch fixed and variable annuities as savings mechanisms for retirement or other long-term goals such as college education savings. Retirement savings or a child’s college account are the last places customers want to take big risks in the stock market. In our low interest rate environment, many people search for a competitive yield on CD’s, bonds, and money market accounts. Naturally, when a salesman touts an attractive interest rate on a tax-deferred fixed or variable annuity, people listen. Before you purchase an annuity, though, consider all the downsides to these products. The San Francisco County and California annuity attorneys at Evans Law Firm, Inc. represent clients who have lost money from surrender penalties or high fees and commissions on fixed and variable annuities.[1]  If you or someone you love has lost money on an annuity surrender or by paying high commissions and fees call the Evans Law Firm today at (415)441-8669 for a free review of your contract, including surrender provisions, fee schedules, and any income or other riders on the contract.

Agents will stress the tax deferral benefits of annuities for long-term savings plans. But IRAs and 401(k) plans also offer tax deferred retirement savings.  Similarly, Section 529 College Savings Plans are a tax-deferred way to save for education expenses.  When distributions are made from the account for qualified educational expenses there is not even any tax on growth of the original investment. (If distributions are not considered qualified, then Federal income tax will be due on the growth of the distributed investments, and can incur a 10 percent penalty.)  The bottom line is that you can achieve the benefits of tax deferred savings without resorting to annuities.

Perhaps the biggest drawback to annuities comes in the form of the surrender penalties and fees these products carry. Fixed and variable annuities are insurance products and, like other forms of insurance, involve sales commissions and fees that make these investments more costly than direct investments in CDs, money market funds, or stock and bond index funds. paid someone now to pay you back a larger sum in the future.  Annuities are also highly illiquid. Withdrawing any of your money before maturity will trigger surrender penalties.  And even if you don’t need an early withdrawal, the fees start to increase as the contract matures and your return on the invested funds decreases.

Proceed with Caution

Be wary of complex fixed or variable annuities. Resist high-pressured sales pitches.  Avoid quick decisions.  Consult an independent financial consultant or counsel who is not compensated by sales commissions.  Take your time and get professional help. 

Contact Us

If you or a loved one suffered a loss from surrender penalties, rider fees or other charges and fees under an annuity, contact San Francisco County and California annuities attorney Ingrid Evans and the other attorneys at Evans Law Firm at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex financial contracts, annuities, and large insurance companies.  We can help guide your case through a jury trial or toward an equitable settlement.  We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Some of the major annuity and life insurance providers in California are:

Allianz Life Insurance Company of North America

Allstate Life Insurance Company

American Equity Investment Life Holding Company

American General Life Insurance Company

American National Insurance Company

Athene Annuity and Life Company

AXA Equitable Life Insurance Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company

Genworth 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

Life Insurance Company of the SouthWest/National Life Group

Lincoln Financial Group/The Lincoln National Life Insurance Company

MassMutual/Massachusetts Life Insurance Company

MetLife/Metropolitan Life Insurance Company

Midland National Life Insurance Company

Mutual of Omaha

National Life Group/Life Insurance Company of the SouthWest

New York Life Insurance Company

Pacific Life Insurance Company

Principal Life Insurance Company

Prudential Life Insurance Company

Security Benefit Life Insurance Company/Guggenheim Partners

Symetra Life Insurance Company

Transamerica Life Insurance Company

Voya/Reliastar Life Insurance Company

[1] We do not, however, provide investment or tax advice.

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