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May 3, 2024 by |

Sonoma Financial Elder Abuse And Annuity Attorney: Deferred Annuities Are Poor Choices For Seniors


Pitfalls For Older Consumers

Complicated, Expensive And Illiquid Contracts

Limits On Returns

Evans Law Firm, Inc. generally recommends against certain types of deferred annuities especially for seniors because these complex insurance policies carry high fees, lack transparency, and are illiquid (meaning it is costly to get your money back). There are other disadvantages as well, as we explain further below.  Questionable sales tactics and presentations and the policies themselves may constitute violations of insurance laws and elder protections. Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. § 790 et seq. (Unfair Insurance Practices Act).  Relief for injured seniors includes awards of attorneys’ fees and expenses for bringing your case.  Cal. Welf. & Inst. Code § 15657.5.  If you are over 60, live in San Francisco or elsewhere in Sonoma County or elsewhere in the San Francisco Bay Area 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 Annuities Might Be a Bad Investment for You

Annuities Can Be Incomprehensible

Annuity contracts often contain complex jargon, various payment options and intricate investment structures and interest crediting rules. Some contracts are over 100 pages long. The sheer, industry jargon, tables, and numbers can make it challenging for individuals to fully understand the annuity’s terms, risks and benefits.

Burdensome Fees

Some annuities can come with much higher fees than other investment vehicles. Annuities can have sales commissions, administrative charges and investment expenses. These fees can erode a significant portion of your potential returns, making other investment options more cost-effective.

No Liquidity

Deferred annuities have restrictions on withdrawals. Specifically, annuities typically surrender charges if you take a distribution or cash out the annuity before the agreed-upon age in the contract.

Tax Penalties

Withdrawing funds from an annuity before a certain age (usually younger than 59½) results in a 10% penalty tax on the withdrawal. Withdrawals, before and after age 59 1/1 are generally taxed at ordinary income tax rates, not capital gains rates.

Limited Returns

Indexed annuities offer market-linked returns but limit your earnings if the stock market performs well. This “cap” restricts your annuity’s returns to a specific amount, while most other investment accounts are not capped.

No FDIC Insurance

The Federal Deposit Insurance Corporation (FDIC) does not insure annuities like it does bank accounts, even if a bank officer is selling you the annuity.  Lack of FDIC coverage means the contractual promise to pay income to you in the future is only as good as the company’s promise to do so.

Contact Us

If you are over 60 and live in Sonoma County or elsewhere in the San Francisco Bay Area and have a deferred annuity or universal life insurance contract, 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=””></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


Securian Financial Group

Securian 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.

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