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Nov 12, 2021 by |

San Mateo County Financial Elder Abuse Attorney: Selling Unsuitable Annuities For A Commission

ATTORNEY NEWSLETTER

Agents Incentivized By Large Commissions

You May Be Sold Something That’s Not Right For You

Beware High-Pressure Sales Pitches And “Today-Only” Deals

Insurance Agents and brokers receive a commission for annuity sales, which incentivizes an agent to sell you an annuity.  That incentive could lead an agent to sell you an annuity even if it’s not right for you.  Evans Law Firm, Inc. recommends against any type of deferred annuity and certain forms of life insurance coverage for older consumers. Such contracts pay high commissions, contain annual fees that reduce any return on your money, and perhaps worst of all, tie up a senior’s paid premiums for years and impose penalties for taking your money back out.  Sales of unsuitable insurance contracts may be a form of financial elder abuse and sales practices used by the agent may violate the California Insurance Code in certain situations.  Cal. Weld. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. § 790 et seq. (Unfair Insurance Practices Act).  If you are over 60, live in San Mateo County or elsewhere in 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. 

Considerations To Keep In Mind

Here are three things you need to know before you let an insurance agent sell you a deferred annuity:

  1. Annuities Are Complicated.  Deferred annuities come in many varieties — variable, fixed, and fixed-indexed contracts.  All of the contracts are complex and have special definitions and individualized rules and formulas regarding how your returns are calculated, how your income payments will be made, and what penalties you will pay to withdraw your money.  Many of these contracts exceed 100 pages with various endorsements and riders attached.
  2. Annuities Require A Long-Term Commitment of Funds.  With a deferred annuity, you can only access your money as a future income stream and don’t have the flexibility to take withdrawals for many years without a significant penalty, sometimes as high as 15% or more.  Also, the annuity’s fixed, future income payout will lose purchasing power through time due to inflation.
  3. Fees Add Up…And Destroy Returns.  The fees charged under deferred annuities are embedded in the contracts, and can be expensive compared with other types of investments. The average fees for deferred annuities without additional features were 2.211 percent in 2019, according to Morningstar. Adding an income rider brings the average annual fees to 3.2 percent. This can be as much as two to three times what a 401(k) plan investor might pay on direct fund investments.
  4. Annuities Are Not Insured Investments.  Annuities are not covered by FDIC insurance like CDs and other bank deposits.  Even if an advisor at a bank sells you your annuity, it is still not n insured investment like other deposits at the bank are.  The promise to make future income payments to you under an annuity contract is only as good as the carrier’s word – and financial ability – to do so.

Contact Us

If you are over 60 and live in San Mateo County or elsewhere in 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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