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Apr 5, 2018 by |

San Mateo County and California Financial Elder Abuse Attorneys: Life Insurance Churning and Twisting


Life Insurance Churning

Millions of older Americans have whole life insurance policies with accumulated cash value. Typically, they were sold those policies when they were much younger as a tax deferred savings vehicle, passing the accumulation on to their children when they died.  Some insurance agents spot these senior policyholders and try and convince them to surrender their policies and replace them with new policies.  The practice is known as “churning” or “twisting” your policy.  The sales pitch is invariably that the policyholder can increase the amount of life insurance protection with no increased cost of insurance and without the payment of additional premiums.  Be extremely wary of such a recommendation.  As explained below, the churn or twist can result in substantial financial loss for you and your family and possible tax penalties.

The San Mateo County and California financial elder abuse attorneys at Evans Law Firm, Inc. represent senior victims who have lost money due to churning or twisting of life insurance policies or annuities by insurance agents and carriers. Such losing transactions for seniors constitute financial elder abuse.  Our financial elder abuse lawyers pursue all remedies available against all parties responsible for victimizing seniors under the California Elder Abuse and Dependent Adult Civil Protection Act and other statutes designed to protect California seniors from financial elder abuse.  If you or someone you know is the victim of financial elder abuse in San Mateo County or elsewhere in California, call Evans Law Firm today at 415-441-8669.

How a Churn Costs You

What an insurance agent may not tell you when recommending a churn or twist is that the cash value of the new policy will be less than the old and will require significant additional premiums in a few years in order to stay in force. The new policy would have a diminished cash value for several reasons.  First, the replacement policy will have a higher cost of insurance because the agent has elected a higher death benefit for you.  Second, your old carrier will impose surrender charges on your surrender of the existing policy and that will reduce the case value poured into the new policy.  Thus, there is less money in the policy to meet the premiums and also less money invested, which is supposed to continue to build both to increase the cash value and to pay the new premiums.  In short, the surrender of the old policy has a spiraling effect on the increased cost of the new one.

And if that does not dissuade you, consider also that you may end up with a tax bill on the transaction. While money grows tax-deferred in life insurance policies, withdrawals and surrenders are taxed at ordinary rates.  Always consult your tax advisor when considering any policy surrender or replacement.[1]

Remedies for Victimized Seniors

California leads the nation in protections for seniors against financial elder abuse. The State’s laws afford broad civil remedies to seniors– compensatory damages, the award of mandatory attorneys’ fees and all other remedies otherwise provided by law. These other remedies may include punitive damages and treble damages where the broker is guilty of oppression, fraud, or malice.  Seniors are often reluctant to come forward either because they are embarrassed by what has happened to them or because they do not understand their rights under California law.  If you are a senior or the loved one of a senior who has been the victim of financial elder abuse, don’t hesitate to come forward. 

Some of the major annuity and life insurance providers in California are listed below. We do not suggest in any way that any of these carriers is guilty of any wrongdoing, including twisting or churning policies.  Rather, the list is provided solely for our readers’ reference.

Allianz Life Insurance Company of North America

American National Life Insurance Company

Ameriprise Financial/RiverSource Life Insurance Company

Athene Annuity and Life Company

AXA Equitable Life Insurance Company

Bankers Life Insurance and Casualty Company

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

Genworth Life Insurance Company

Global Atlantic Financial Group/Forethought Life Insurance Company

Guardian 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

Lincoln Financial Group

Lincoln Benefit Life Company

Massachusetts Mutual Life Insurance Company

Metlife/Metropolitan Life Insurance Company

New York Life Insurance Company

Northwestern Mutual Life Insurance Company

Pacific Life Insurance Company

Prudential Life Insurance Company

RiverSource Life Insurance Company/Ameriprise Financial

Security Benefit Life Insurance Company/Guggenheim Partners

Transamerica Life Insurance Company

Unum Life Insurance Company of America

Voya/Reliastar Life Insurance Company


Contact Us

If you or a loved one been the victim of financial elder abuse or securities fraud whether in San Mateo County or anywhere in else California, contact California financial elder abuse attorney Ingrid Evans and the other Evans Law Firm financial elder abuse attorneys at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with all types of financial elder abuse, investment and securities fraud and annuity fraud. We can help guide your case through a bench or jury trial, through mediation or arbitration, including FINRA arbitration if required, 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.

[1] While we do not offer tax or investment advice, we do represent clients who have lost money due to taxation of churns and twists or other botched life insurance or annuity replacements.

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"We contacted Evans Law Firm when we were unable to collect on a Long-Term Life Insurance policy for an elderly family member. Ingrid responded almost immediately with an offer of a free consultation. I was immediately impressed with her passion for justice!!"
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