Deferred Annuities Are Complex Products
What To Watch For
Avoid Replacements And Exchanges
Deferred annuities are complicated investments. Some bear complex qualities of both life insurance and securities products; contracts run from 50 to 100 pages or more and are filled with technical language and actuarial tables. Insurance agents are paid significant sales commissions to sell these complicated products. Some unscrupulous sellers use high-pressure sales pitches, seminars, and telemarketing. Beware of retirement and estate planning “seminars” that may be designed to sell annuities. Any high-pressure or deceptive sales tactics, and sales of unsuitable annuities, violate the law and constitute financial elder abuse when the targeted consumer is a senior. Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. Code §§ 790 et seq. (Unfair Insurance Practices Act) and 10509 (suitability requirement). Senior victims may be entitled to damages and an award of attorneys’ fees and expenses for bringing a case. Cal. Welf. & Inst. Code § 15657.5. Regardless of sales tactics, Evans Law Firm, Inc. generally recommends seniors avoid certain types of deferred annuities because deferred annuity contracts can be expensive and complicated and tie up a senior’s money for years. If you are over 60, live in Santa Cruz County, or elsewhere in California and own a deferred annuity (such as 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.
Beware of High Surrender Charges
The most significant fee associated with annuities is often the surrender charge. This is the percentage that a consumer is charged if he or she withdraws funds early. Contract surrender periods may run for ten or more years and the penalties can be as high as 10-15% in the early years of a contract.
Beware of Agents Urging You to Switch Annuities
Some sellers of annuities products 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.
Be on Guard Against “Bonuses”
Agents and insurance companies may offer 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.
Don’t Make Investments You Can’t Afford
Some unscrupulous agents encourage consumers to make unrealistic investments they can’t afford, or buy a long-term deferred annuity, even though they will need access to their money for health care or living expenses. Don’t be lured into risky investments by fast talking agents and insurance companies.
If you are over 60 and live in Santa Cruz 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:email@example.com”>firstname.lastname@example.org</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
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.