How Deferred Annuities Work
Pitfalls For Seniors
Questionable Sales Tactics
Some insurance agents become quite aggressive when selling insurance products like certain forms of life insurance and deferred annuities. Sales of these policies generate substantial sales commissions and agents may not fully disclose all the facts about these policies in order to close a sale quickly. Do not allow yourself to be rushed into any transaction. Deferred annuities are especially complex; policies can run from 50 to over 100 pages long with endorsements (called riders) sold to enhance your benefits. Evans Law Firm, Inc. recommends against deferred annuities for seniors because we have seen too many older consumers lose money due to sales commissions, withdrawal (or surrender) penalties, annual fees, and low returns on invested premiums. Sales and recommended surrenders and exchanges of deferred annuities to seniors may constitute financial elder abuse claims under Cal. Welf. & Inst. Code § 15610.30. Questionable sales tactics, like unannounced home visits or falsified applications, are illegal. See, e.g., Cal. Ins. Code § 790 et seq. (Unfair Insurance Practices Act). If you are over 60, and live in San Francisco or elsewhere in California and would like us to review your annuity contract, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Probably the principal reason we recommend against deferred annuities for seniors is because the surrender penalties you will pay under these contracts if you need your money back. Once you are sold an annuity, you are locked in. If you need your money during the first several years of the policy, you will have to pay a penalty called a surrender charge. The surrender charges can be high – in some contracts this charge may be as high as 15%; and the surrender period can last as long as ten years. If you think you will need access to your money during the surrender period, do not get a deferred annuity.
Home Visits By Agents
An insurance agent cannot enter your home uninvited. Cal. Ins. Code § 789.10. And they must leave immediately if you ask them to. Here’s what else the law requires:
- Agents must give you 24-hour written notice before they come.
- When they first contact you, they must tell you why. For example, they should say they want to talk about insurance.
- They must tell you the name of the insurance company they represent.
- They must tell you the names and titles of everyone coming to your home.
- Each person should give you a business card or other written identification with their name, business address, telephone number, and any insurance license numbers.
- You can ask people to leave at any time.
The person who offers to sell you an annuity must give you honest and accurate information on the terms and rules of the annuity, as well as its costs and benefits. Cal. Ins. Code § 785(a)(“All insurers, brokers, agents, and others engaged in the transaction of insurance owe a prospective insured who is 65 years of age or older, a duty of honesty, good faith, and fair dealing.”) If you already have an annuity and the agent recommends you exchange it for a new policy, there are a number of important consequences they must disclose to you. Cal. Ins. Code §§ 789.8 and 10509-10509.9.
If you are over 60 and live in San Francisco or elsewhere in the Bay Area or throughout California and would like a free review of your policy contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669 (or toll free at 1-888-50EVANS), or by email at <ahref=”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.