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May 12, 2022 by |

San Francisco Financial Elder Abuse And Annuity Attorney: Certain Deferred Annuities Are Risky For Seniors

ATTORNEY NEWSLETTER

Long-Term Insurance Policies With Withdrawal Penalties

Annual Fees Erode Returns

Exchanging Existing Contracts Can Be Costly

Evans Law Firm, Inc. generally recommends against certain types of deferred annuities for older consumers because these complex, expensive insurance policies may tie up a senior’s money for years and impose significant penalties if you need your money back.  Even if you are able to leave your money in, the upfront sales commission (taken out of your premium) and annual fees may diminish the return on your money.  Questionable or incomplete sales tactics and presentations and the policies themselves may constitute violations of insurance laws and elder protections. Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. § 790 et seq. (Unfair Insurance Practices Act).  Senior victims may sue for damages and other relief including awards of attorneys’ fees and expenses for bringing your case.  Cal. Welf. & Inst. Code § 15657.5.  If you are over 60, live in Orange County or elsewhere in the State of California and own a deferred annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Disadvantages For Seniors

Surrender Charges – The greatest danger for senior buyers of deferred annuities, however, are surrender charges. A surrender charge applies when you make more withdrawals than you’re allotted. Your insurance company could limit withdrawals particularly during the early years of your contract. Surrender fees are often as high as 15% and can apply for periods up to ten years or more.

Hefty Fees — Annuities are costly compared with mutual funds and CDs. Many are sold through agents, whose commission you pay through a considerable upfront sales charge. Directly sold products, which you buy straight from the insurer, can help you get around that big upfront fee. Still, even then you could be faced with sizable annual expenses, often in excess of 2%. That would be high even for an actively managed mutual fund. And if you take out special riders to increase your coverage, you’ll be paying even more.

Higher Tax Rates — Although we do not provide tax advice at Evans Law Firm, we know that when you take withdrawals from deferred annuities, any net returns you received are taxed as ordinary income. Depending on your tax bracket, that could be a lot higher than the capital gains tax rate.

Complexity — One of the cardinal rules of investing is not to buy a product you don’t understand. Annuities are no exception. The insurance market has exploded over the past few years with a slew of new, often exotic variations on the annuity. Some, such as the equity-indexed annuity, come with fees and limitations so complex that few investors fully understand what they’re getting into.

Contact Us

If you are over 60 and live in San Francisco or elsewhere in the State of California and have a deferred annuity or universal life insurance contract, we can review your contract for free.  You can reach 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=”mailto:info@evanslaw.com”>info@evanslaw.com</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

PacLife

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.

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