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Jan 13, 2022 by |

Sonoma County Financial Elder Abuse And Annuity Attorney: Senior Citizens, Deferred Annuities And Financial Elder Abuse

ATTORNEY NEWSLETTER

 Agents Target Seniors For Sales Of Deferred Annuities 

Disadvantages For Seniors

Beware Of Recommendations To Switch Contracts

Insurance agents target seniors for sales of deferred annuities but these insurance products are especially complex.  Deferred annuities can run from 50 to over 100 pages long with endorsements (called riders) sold to enhance your benefits. 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.  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 Sonoma, San Francisco 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. 

Reasons To Avoid Deferred Annuities

  • Annuities are long-term contracts with penalties if cashed in too early.  Penalties can be as high as 15% and penalty periods can last ten years or more.
  • Annuities require you to lose control over your investment. Since you are locked in by steep surrender penalties, you cannot switch for a better interest rate without paying a penalty.
  • Some annuities earn little to no interest.  Annual fees and rider fees erode your return on investment.
  • Guaranteed income cannot keep up with inflation in certain types of annuities.
  • The annuity might not provide a death benefit to your beneficiaries.  An agent may sell you a death benefit rider but that costs more and if you have to surrender your policy, the benefit and the fees you paid for it are lost.
  • Fees can be high. Combined administrative fees and rider fees can be as high as 2.5-3% per year, substantially eroding your return.

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.

Contact Us

If you are over 60 and live in Sonoma County, San Francisco or elsewhere in the Bay Area or throughout 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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"We contacted Evans Law Firm when we were unable to collect on a Long-Term Life Insurance policy for an elderly family member. Ingrid responded almost immediately with an offer of a free consultation. I was immediately impressed with her passion for justice!!"
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