ATTORNEY NEWSLETTER
Agents Target Seniors For Annuity Sales
Disadvantages For Seniors
Understand How Annuities Work Before An Agent Sells You One
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. If you are approached by an agent with an annuity proposal, at a minimum make sure you ask a lot of questions, get a second opinion, and talk to your tax advisor before you’re sold one. 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 Santa Clara County 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.
General Annuity Questions
Annuities are complicated insurance policies so always find out how they work before an agent sells you a contract. Here are some important general questions to ask, followed by some specific questions to ask about fixed indexed annuities:
- What is the guaranteed minimum interest rate?
- What charges, if any, are deducted from my premium & when?
- What charges, if any, are deducted from my contract value & when?
- What are the surrender charges or penalties if I want to end my contract early and take out all of my money?
- How many years will surrender charges apply?
- Can I get a partial withdrawal without paying charges or losing interest? Does my contract have vesting?
- Does my annuity waive withdrawal charges if I am confined to a nursing home or diagnosed with a terminal illness?
- What annuity income payment options do I have and when?
- What is the death benefit?
- What are the risks that my annuity/earned interest could decline in value?
- Is interest compounded during the term of the policy?
- What is the agent’s commission on this product?
Additional Questions to Ask for Fixed-Indexed Annuities
- What is the participation rate?
- For how long is the participation rate guaranteed?
- Is there a minimum participation rate?
- Does my contract have a cap?
- Is averaging used? How does it work?
- Is there a margin, spread, or administrative fee? Is that in addition to or instead of a participation rate?
- Which indexing method is used in my contract?
- What is the minimum interest the contract can earn?
- What is the maximum (cap) interest the contract can earn?
Suitability
Suitability regulations require the insurance producer and insurance company to comply with the National Association of Securities Dealers Conduct Rules. Those rules require an insurance producer or insurance company, when selling an annuity insurance policy, to make reasonable efforts to obtain information concerning:
- the customer’s financial status;
- the customer’s tax status;
- the customer’s investment objectives; and
- such other information used or considered to be reasonable by the insurance producer or insurance company in making recommendations to the customer.
If the foregoing questions sound complex, rest assured, they are. Deferred annuities are extremely complex and always remember that once you are sold one, you cannot exit the contract for many years without paying a surrender charge, or withdrawal penalty. These charges can be as high as 15% and the surrender period can last ten years or more. For this reason alone, Evans Law Firm recommends against these deferred annuity contracts for older consumers.
Contact Us
If you are over 60 and live in Santa Clara Count or elsewhere in 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: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.
