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Jan 30, 2022 by |

Santa Clara County Financial Elder Abuse And Annuity Attorney: Asking The Right Questions About Deferred Annuities

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.

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"I contacted Attorney Ingrid Evans for advice about a financial elder abuse case. She was extremely knowledgeable, bright and informative. I highly recommend her. I am an attorney myself, and know when I am talking to a another excellent attorney."
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