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Dec 6, 2021 by |

Santa Clara County Financial Elder Abuse And Annuity Attorney: Unsuitable Investments For Seniors

ATTORNEY NEWSLETTER

Disadvantages Of Deferred Annuities

Unsuitable Investments

Reasons To Avoid Deferred Annuities

Sales of unsuitable annuities, including indexed annuities, to seniors may constitute financial elder abuse and violate the California Insurance Code and Financial Industry Regulatory Authority (FINRA) regulations against the sale of unsuitable investments.  Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. §§ 790 et seq. (Unfair Insurance Practices Act) and 10509 (suitability requirement); FINRA Rule 2111(suitability standard for financial advisor recommendations).  Evans Law Firm, Inc. recommends against deferred annuities for older consumers because they are expensive and complicated and because these contracts tie up a senior’s money for years. Both statutes allow victims to sue for damages and other relief including awards of attorneys’ fees and expenses for bringing your case.  Cal. Welf. & Inst. Code § 15657.5.  If you are over 60, live in Santa Clara County or elsewhere in the Bay Area or throughout the State of 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. 

Reasons Why Senior Consumers Should Avoid Annuities

  • Annuities are long-term contracts with penalties if cashed in early.
  • Annuities require you to lose control over your investment. You cannot move your money around if markets change or interest rates move.  You are bound to whatever returns the carrier dictates.
  • Some annuities earn little to no interest. Contract fees and subaccount fees reduce any contract rate.  Teaser rates, used to lure consumers into contracts, expire.  Historically, rates on deferred annuities lag returns on direct stock fund investments.
  • Guaranteed income cannot keep up with inflation in certain types of annuities.
  • The annuity might not provide a death benefit to your beneficiaries.
  • Fees can be high in investment-based annuities.

Exchanges And Replacement Transactions

If you’ve already purchased an annuity, be especially wary if an agent recommends exchanging your existing annuity for a new one. Unsuitable contract exchanges violate California law (see, e.g., Cal. Ins. Code §10509.914), but agents still push inappropriate (and costly) exchanges.  There are several dangers for consumers in these exchanges: surrender penalties on the surrendered contract, tax on the proceeds from the surrendered contract, and the surrender period resets under the new contract, tying up your money for even more years.  Another danger for consumers is where agents “churn” annuities by recommending a succession of surrenders and exchanges.  This activity is illegal.

Contact Us

If you are over 60 and live in Santa Clara County or elsewhere in the State of California and have an indexed annuity, 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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