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Oct 22, 2021 by |

Santa Clara County Financial Elder Abuse Attorney: Deferred Annuities Unsuitable Investments For Seniors


Beware High-Pressure Sales Tactics

Beware High Surrender Charges

Beware Agents Urging You To Switch Annuities

Sales of unsuitable insurance products to seniors by insurance carriers and agents may constitute financial elder abuse under Cal. Welf. & Inst. Code § 15610.30 and violations of the California Insurance Code. See, e.g., Cal. Ins. Code §§ 785-789.10.  Chief among unsuitable insurance products sold to seniors are deferred annuities because sales of deferred annuities generate substantial commissions for selling agents.  Evans Law Firm, Inc. recommends that seniors avoid deferred annuities, based on years of representing older consumers who have lost money as the result of those high sales commissions, and also contract fees, rider fees; low returns; and, withdrawal or surrender penalties.  We do not provide tax advice at Evans Law Firm, but we have seen older consumers faced with large tax bills upon a surrender of a contract in addition to the surrender penalties imposed by the carrier. If you are over 60, and live in Santa Clara County or elsewhere in California and have experienced an economic loss as a result of the sale of an unsuitable annuity or other investment product, including a fixed indexed annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

If an insurance agent or financial advisor proposes a deferred annuity to you or recommends that you replace your existing annuity, keep these important cautions in mind:

Beware High-Pressure Sales Tactics and Seminars

Some unscrupulous sellers use high-pressure sales pitches, seminars, and telemarketing. Beware of agents who “cold call” you, contact you repeatedly, offer “limited time offers,” show up without an appointment, or won’t meet with you if your family is present.  California prohibits many of these kind of questionable approaches.  See, e.g., Cal. Ins. Code § 789.10 (rules for home visits by agents). Beware of estate planning “seminars” that are actually designed to sell annuities. Beware of seminars that offer free meals or gifts. In the end, they are rarely free. Beware of agents who give themselves fake titles to enhance their credibility.

Beware of High Surrender Charges

The most significant fee associated with annuities is often the surrender charge ore withdrawal penalty. This is the percentage that a consumer is charged if he or she withdraws funds early. For instance, in one reported case[1] a carrier charged a retired farmer on a fixed income $6,800 in surrender penalties when he needed access to his $24,000 (most of his net worth) placed in annuities.  In another reported case, a woman was sold an annuity with surrender charges lasting for 16 years, or until she was 95 years old, with the surrender penalty being 17 percent of her investment.  

Beware of Agents Urging You to Switch Annuities

Some agents urge customers to switch to another annuity, a practice called “churning.” Unfortunately, agents may not adequately disclose fees associated with switching investments, such as new surrender fees (which typically start over from the date the product is switched), or significantly altered benefits. Consumers should scrutinize the investment to find out whether the benefits outweigh the costs of switching their investment.  California has specific rules an agent must follow when recommending a switch (Cal. Ins. Code § 10509.10 et seq.), and violation of those rules may also constitute financial elder abuse.

Be on Guard Against “Bonuses”

Agents and insurance companies may offer bonuses (sometimes called “premium bonuses”) to entice investors, such as additional interest points on their return. The benefits of such “bonuses” are often outweighed by increased fees and administrative costs to the investor. “Bonuses” may be simply marketing gimmicks.  The bonus is never an amount of money you can actually withdraw and if you surrender your policy the so-called bonus completely disappears.

Contact Us

If you are over 60 and live in Santa Clara County, San Francisco or elsewhere in the Bay Area or throughout California and have lost money on a deferred annuity 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=””></a>. Ingrid will pursue all remedies available to you against all parties responsible, including restitution (getting your money back), extra damages (to punish the fraudulent conduct) and awards of attorneys’ fees and costs to the senior forced to bring an action against the wrongdoers. 

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


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.

[1] Evans Law Firm, Inc. was not involved in either of the reported cases described here but has represented older consumers who have lost money due to substantial surrender penalties.

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