ATTORNEY NEWSLETTER
Be Wary of Variable Annuities
Don’t Be Blindsided In Your Search For Higher Returns
In our current low-interest rate environment, insurance agents and retirement planners push variable annuities as a way to get more bang for your buck when it comes to retirement savings. Be very careful. These products are risky and complicated and agents spread a few outsized myths about the value of these contracts. We want to clear the air for you.[1]
The California and San Francisco securities and annuity lawyers at Evans Law Firm, Inc. represent clients who have lost money on commissions, fees and surrender penalties under inappropriate variable annuity contracts sold by banks, brokers, and insurance agents. If you or a loved one is over 60 and lives in California and have been sold an inappropriate or unsuitable variable annuity or suffered loss on a policy surrender, call the California financial elder abuse and annuities lawyers today at Evans Law Firm (415)441-8669 and we can help.
One experienced auditor[2] recently put together a list of variable annuity myths we’d like to share along with our own thoughts on each:
- Myth #1: Variable annuities are suitable investments for retirees. When you’re younger, market risk may well be worth the gamble on a higher return. But seniors may not be in a position to take on market risk. Variable annuities fluctuate with the markets and may expose older policyholders to too much risk of their capital decreasing.
- Myth #2: Your money is safe. Annuities are not insured investments. Your principal will fluctuate up and down with the market. Future income is based solely on the carrier’s ability to pay it out.
- Myth #3: Fees are low. In fact, variable annuities carry high upfront commissions and continuing fees as high as 2-4% per year, seriously eroding returns. Any withdrawals during the surrender period (up to 10 years or longer in some contracts) will be subject to penalties.
- Myth #4: Your income rider value is your cash value. Here’s where things get complicated and agent explanations a little vague! First, understand you will pay an annual extra fee for any income rider, usually around 1.5%. Second, if you surrender or take a lump sum withdrawal, you will not get the incomer rider “pot” but rather the policy’s considerably lower “cash value.” Agents gloss over the details of income riders, but know that they are very complex and play out in ways you may not anticipate.
Contact Us
If you or a loved one lives in California, is over 60, and been sold an unsuitable or inappropriate variable or fixed annuity or suffered loss on a surrender or replacement, contact Ingrid M. Evans and the other California and San Francisco securities, financial elder abuse and annuity and life insurance attorneys at Evans Law Firm (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
Some of the leading providers and distributors of life insurance and annuities in California are listed below. Some of these carriers offer products through consumer banks. We are not in any way suggesting that any of these carriers or distributors has done anything wrong or offers unsuitable variable annuities. Rather, 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 National Life Insurance Company
Ameriprise Financial/RiverSource Life Insurance Company
Athene Annuity & life Assurance Company
Athene Annuity and Life Company
Athene USA
Aviva Life Insurance Company
AXA Equitable Life Insurance Company/AXA US
Bankers Life Insurance and Casualty Company
Brighthouse Financial, Inc./MetLife
Citigroup Global Markets, Inc.
Crump Life Insurance Services, Inc.
CUNA Mutual Group/CMFG Life Insurance Company
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Forethought Life Insurance Company/Global Atlantic Financial Group
Genworth Life Insurance Company
Global Atlantic Financial Group/Forethought Life Insurance Company
Guardian Life Insurance Company
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
Massachusetts Mutual Life Insurance Company
Merrill Lynch Life Agency Inc.
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Nationwide Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Life Insurance Company
Pacific Life Insurance Company
Principal Financial Group
Prudential Life Insurance Company
Raymond James Insurance Group
RiverSource Life Insurance Company/Ameriprise Financial
Security Benefit Life Insurance Company/Guggenheim Partners
Symetra Life Insurance Company
Transamerica Life Insurance Company
Unum Life Insurance Company of America
Voya/Reliastar Life Insurance Company
Wells Fargo Advisors
World Financial Group Insurance Agency, Inc.
[1] While we do not provide investment or tax advice at Evans Law Firm, we have represented enough policyholders who’ve lost money on these contracts.
[2] You can read the whole article at https://www.palmbeachpost.com/marketing/considering-variable-annuities-read-this-first/JVsC31D9w575pizM2EewUK/
