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Jun 1, 2016 by |

San Mateo Financial Elder Abuse Attorney: Whole Life Insurance


A Consumer’s Guide to Understanding Financial Products

It can be hard for anyone to navigate the complex market for financial products: life insurance, annuities, indices, stocks, bonds, hedge funds, Roths, IRAs, and many other esoteric options may seem like a good choice for investment when sold to you by an experienced broker. This goes double for senior citizens trying to responsibly manage their retirement funds. Scammers and other unscrupulous individuals often see seniors as a lucrative source for income, targeting saving carefully set aside for decades.

There are a whole range of financial products that are risky purchases, and investing a large sum of money in anything that you don’t fully understand is always a risk, but there are a few specific financial products that our consumer fraud attorneys think people need to be aware of:

Whole Life Insurance

This is a product that many people know about, but very few people realize is a bad investment. Whole life policies require that the policyholder pay large premiums in order to stay covered, and which may increase even further as time passes. They don’t offer much more protection than term life policies, especially considering the increased cost, and their main selling point, that they accumulate cash value that can be sheltered from taxes, is not useful to the vast majority of clients. Instead, brokers like to sell them for the larger commission they get on each purchase.

Variable annuities

These are among the most risky types of annuities, and there’s a lot that’s been said to dissuade investors from putting their money in variable annuities. One of the factors that may make them undesirable investments is that they are locked in once the client sets one up. Large sums of money are kept in the annuity and cannot be accessed without paying sizable surrender penalties. In addition, funds left in the account when the policyholder passes away are often kept by the company. Our San Mateo financial elder abuse attorneys have seen many cases in which heirs are left in the dark about financial products help be their loved ones.

Indexed annuities

Any product that includes the word “index” can be risky. This means that instead of generating revenue for the client from stable investments such as treasury bonds, the returns are tied to an index such as the S&P 500, essentially connected to the open market. Although these types of products are sold as if they can bring market rate returns without the risk of stock trading. Instead, they often allow the insurance company to use your money to generate higher returns for themselves, while passing the risk on to policyholders. The policies tend to bring in less returns over time than traditional policies.

Indexed universal life insurance

The same concerns as for indexed annuities also apply, as well as the additional concerns that accompany life insurance holdings. By having life insurance funds track an index rather than be invested in bonds, you risk having far less than you expect when the time comes to use life-insurance funds. Often, these policies try to sell you the rosiest possible view of your funds, but what you actually end up with is much less than you were led to expect.

Contact Us

The San Mateo Financial Elder Abuse Attorneys at Evans Law Firm have a wealth of experience in dealing with financial products including annuities, life insurance, and others. Call us at (415) 441-8669 to schedule a free consultation, or contact us by email at

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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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