Unsuitable Deferred Annuities For Seniors
High-Pressure Sales Tactics
Warning Signs For Consumers
Annuity carriers pay commissions as high as 10 percent to insurance agents when they sell deferred annuities. Agents in turn target seniors with these sales; sometime the pitch may be to convince a senior consumer to invest all of his or her retirement savings into an annuity. Evans Law Firm, Inc. recommends seniors avoid deferred annuities because deferred annuity contracts are expensive and complicated and tie up a senior’s money for years. High-pressure or deceptive sales tactics and sales of unsuitable annuities violate the law and constitute financial elder abuse when the targeted consumer is a senior. Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. §§ 790 et seq. (Unfair Insurance Practices Act) and 10509 (suitability requirement). Senior victims may be entitled to damages and an award of attorneys’ fees and expenses for bringing a case. Cal. Welf. & Inst. Code § 15657.5. If you are over 60, live in San Francisco or elsewhere in California and own a deferred annuity (such as a fixed indexed annuity), call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
High-Pressure Sales Tactics and Seminars
Beware of illegal cold calls by agents, so-called “limited” offerings, flyers that invite you to estate planning seminars, free gifts and free lunches. Some local District Attorneys have reported that when seniors are invited to free lunch seminars, sales representatives may station spotters in the parking lot to take note of who arrives driving expensive cars. Those people are marked as potential “clients” and frequently the sales representative will show up uninvited at their homes for a follow up consultation. Don’t invest your money with anyone who will not discuss the investment in front of other family members or your friends. Annuity salespeople are trained to exploit your fears. To quote an instructor at a annuity training conference, “They thrive on fear, anger and greed … Show them their finances are all screwed up so that they think, ‘Oh no, I have done it all wrong.’ This will make you money.” If you’ve already purchased an annuity, be especially wary if an agent recommends exchanging your existing annuity for a new one. Unsuitable contract exchanges violate California law (see, e.g., Cal. Ins. Code §10509.914), but agents still push inappropriate (and costly) exchanges.
Beware of High Surrender Charges
The greatest disadvantage of any deferred annuity, including indexed annuities, is that withdrawals incur an insurance company penalty. Withdrawals during a policy’s “surrender period” are subject to penalties. The period can last ten years or more and the charges can be as high as 15% or greater. For senior consumers this penalty can be particularly harsh. A senior policyholder may need his or her money back for an emergency or escalating care costs or the like and a stiff penalty that eliminates any gain in the invested money and cuts into principal is a real hardship. Surrenders are also taxable events such any surrender can result in large tax bills in addition to the carrier’s penalty.
If you are over 60 and live in San Francisco or elsewhere in the State of California and have an indexed annuity, 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:firstname.lastname@example.org”>email@example.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
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.
 In California, agents are prohibited from making unannounced home visits. Cal. Ins. Code § 789.10.