In 2016, New York Life Insurance was sued by employees who claimed that they were charged excessive 401(k) fees. The plaintiffs who filed suit alleged New York Life was enriched by unjust fees and expenses because plan managers of 401(k) plans failed to invest in lower-cost funds — a decision that allegedly caused retirees to overpay by around $3 million.
This 401(k) fee-based claim against New York Life may not be the only example of a situation where people allegedly suffer financial harm because of New York Life Insurance. Policyholders with whole life policies offered by this insurance provider may also find their own retirement goals affected by unexpected costs and fees charged on the whole life insurance policies that are sold by New York Mutual.
Whole life policies are often targeted to seniors as a safe source of retirement income, but there are problems when policies end up charging policyholders astronomical sums. San Francisco financial elder abuse lawyers can provide help in situations where a policyholder made investments based on misleading marketing or bad advice.
Fees and Costs in New York Life Insurance Whole Life Policies
New York Life Insurance issues whole life policies to people from birth to age 90. Premiums are paid annually, semi-annually or via Check-o-Matic. The company describes its products as a “value builder” that “families have relied on” for generations to help achieve financial security. The policies pay out a death benefit, have an investment component and they are supposed to build up a cash value. Unfortunately, whole life policies may not perform exactly as anticipated due to surprise fees and costs.
When a whole life policy is first purchased, more than half of initial premiums paid for the first year of insurance coverage can end up being paid to the insurance agent as commission for selling the product. Sales field management costs and administrative expenses also have to be paid. These fees effectively come out of the pockets of policyholders, even though the policyholders who pay the premiums are often unaware of where their money is going or why the premiums aren’t helping a policy to accrue a cash value as substantial as expected.
The fees that customers can face that affect their policies’ cash value are numerous and are often hidden deep in fine print. Unfortunately, consumers can find themselves surprised by expenditures (such as liquidation or withdrawal fees) if they wish to take money out of their account and surrender fees (if they need to get out of the policy for any reason).
Getting Help From Skilled Financial Elder Abuse Lawyers
When marketing efforts aim to convince the public that whole life policies from New York Life Insurance are a good choice, investors need to really understand the applicable fees and know how the law protects them. If the insurance marketing turns out to be misleading or if you were given bad investment advice by advisors who have obligations to you, you may be able to make a claim for damages.
An elder abuse attorney can help you to determine if you have a case for compensation based on unexpected fees you have had to pay or other unexpected problems you’re having with your policy. Call the Evans Law Firm, Inc. today to find out more.