Annuities are frequently sold to elders and seniors. Annuities are contracts between an insurance company and the buyer. They are designed to provide scheduled payments to the policy holder, after retirement. Seniors have increasingly been targeted to purchase annuities, because they tend to have accumulated a portion of income prior to retirement. However, elders often purchase annuities they don’t necessarily need, and their insurance policies are never well explained.
The biggest problem that seniors face when purchasing annuities, is that most policies come with a high surrender fee and long surrender periods, causing them to be “locked” into their investment. Surrender fees can be as high as 10% and can last as long as 15 years.
To get a good sense of how many elders and seniors are affected by annuities, Aviva USA (now known as Athene USA) was previously involved in an alleged $570 million class action settlement. It was alleged that Aviva USA and its subsidiaries marketed and sold annuity policies to seniors that were unsuitable, and that some of Aviva USA’s marketing materials failed to disclose surrender charges and maturity dates that were often beyond the policy holder’s life expectancy. Furthermore, annuities are sold by commissioned salespersons. Since annuity salespeople gain in profit for every annuity package they sell, seniors are often sold annuity packages that might not necessarily suit their needs.
For senior citizens who are interested in purchasing annuities, here are some general tips from The National Association of Insurance Commissioners:
• Reviewing all the terms and conditions of the contract before purchase
• Determine the legitimacy of a company by checking their credit rating online
• Comparing similar policy contracts between a number of companies, to help make better decisions
• Verifying that the company and insurance agent are licensed
• Keeping a copy of all paperwork involved in the purchase of the policy
If you are wondering whether or not your deferred annuity is suitable for you, or suspects there are violations of the law, your policy can be reviewed for free by an experienced consumer fraud lawyer. Contact The Evans Law Firm, Inc. at 415-441-8669 or at firstname.lastname@example.org for more information. The Evans Law Firm, Inc. represents victims of annuity fraud and handles financial and physical elder abuse cases, insurance/banking fraud, consumer class action fraud, as well as qui tam (whistleblower/false claims) litigation.