ATTORNEY NEWSLETTER
What are Riders To Annuity Contracts?
Costly With Little Benefit
Other Contract Disadvantages
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. Even more problematic for older consumers are proposed “riders” to such contracts. Riders are attachments to deferred annuities sold by life insurance agents or retirement planners or other advisors as enhanced benefits to any proposed annuity policy. Riders come with an additional fee added to your base premium. Available riders include income riders, long-term care riders, death benefit riders and other policy “enhancements.” All of these add-ons are expensive and promise benefits you may never see. Selling agents often gloss over details or deliberately conceal the way the recommended riders really work. If you are over age 60 and reside in California, the California annuity attorneys at Evans Law Firm can review your annuity contract, including any riders and the policy’s surrender provisions, for free. Call us today at (415)441-8669 or toll free at 1-888-50EVANS.
Income Riders
To understand how riders work, take, for example, so called “income riders” sold as a “guarantee” of future income levels. Older consumers are naturally concerned about future income levels so the appeal of such a supposed “guarantee” is obvious. But in reality the additional “benefit” may be illusory. First, annual fees for income riders run around 1% or more of total policy value so right off the bat there’s a hit on your return. Second, you may never see the promised benefit. These contributions sit in a separately calculated fund apart from the accumulated value of the over-all annuity. The “value” of this separate fund is never available for withdrawal. Rather, the rider offers a “guaranteed” income for life payable only on a schedule determined by the carrier. Finally, if you need to withdraw part of your investment (making a “surrender”) the benefit disappears entirely.
Other Contract Disadvantages
Annuities are extremely complex and not for everybody. Endorsements and riders are even more complex. Fees and commissions destroy returns. Annuities are illiquid investments and tie up your money for years and withdrawals for emergencies may incur steep surrender penalties; you should be positive you will not need whatever funds you commit by way of premium contributions. We understand all these drawbacks because we’ve represented senior policyholders who have lost money on these contracts.
Contact Us
If you are over 60 and live in California 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=”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.
