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Jul 1, 2024 by |

San Francisco Financial Elder Abuse And Annuity Attorney: Disadvantages Of Deferred Annuities Are Not For Seniors


Low Returns And High Fees

Withdrawal Penalties Last For Years

Unfavorable Interest Crediting Formulas

Evans Law Firm, Inc. generally recommends against certain types of deferred annuities especially for seniors because these complex insurance policies carry high fees, lack transparency and are illiquid. The contracts are illiquid because during the so-called “surrender period” (with can last 10 years or more) withdrawals are subject to a penalty.  You are locked in and if market changes during the surrender period drive you to move your money out of the annuity, you will have to pay a surrender charge and may face tax liabilities.  Further, annuities may be sold based on incomplete information about these withdrawal consequences or other contract pitfalls. 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).  Relief for injured seniors includes awards of attorneys’ fees and expenses for bringing your case.  Cal. Welf. & Inst. Code § 15657.5.  If you are over 60, live in San Francisco or elsewhere in the San Francisco Bay Area 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 Of Annuities

  1. Commissions And Fees Erode Returns. Upfront sales commission, annual administrative fees, cost of insurance charges, rider fees and other annual costs erode returns on your premium dollars, especially on an indexed or variable annuity where the value is dependent on the investment returns in the contract’s sub-accounts. Some contracts are so complex that the full rate of the internal expenses is hard for the average investor to ascertain and understand.
  2. Costly Withdrawals. Surrender charges might amount to 10 percent or more of the value of the contract in some cases. There is a surrender period which can vary in length and sometimes be as long as 15 years. With such a contract, if you are sold a policy at age 70 you will be 85 before you can withdraw your money without a surrender charge. If your financial situation, medical emergency, or rising care costs force you to withdraw your money you may suffer a significant loss.
  3. Unfavorable Interest Crediting Formulas.  Interest crediting formulas in deferred contracts are very complex.  Depending on the index you choose may not be credited until once a year, or three years, or even five.  This is in contrast to mutual fund investments where the interests and dividends accrue to your account daily or quarterly depending on whether you are earning interest or dividends.

Contact Us

If you are over 60 and live in San Francisco or elsewhere in the San Francisco Bay Area 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=””></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.

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