ATTORNEY NEWSLETTER
Be Wary of Annuities
Commissions, Fees and Surrender Charges Drain Your Savings
One commentator recently summed it all up when it comes to annuities: “Annuity companies and annuity peddlers are making boatloads of money from you.”[1] It’s the truth. Annuities are among the highest commission financial products out there with upfront commissions as high as 10%. Once the policy is in place, annual fees can run to 4%. That is four to eight times average annual fees for direct mutual fund investments. The real kicker though is surrender penalties: annuity companies charge as much as 15% for you to get your money back during what they call the surrender period – which can last up to 10 or more years!
The California annuity lawyers at Evans Law Firm, Inc. represent clients every day who have lost money on commissions, fees and surrender penalties under their annuity contracts.[2] If you are over 60 and live in California, State law has strict “free look” and disclosure requirements meant to protect you when you’re sold an annuity. If a carrier fails to follow those requirements, we can help you get relief in the form of rescission (undoing the contract), restitution (getting your money back), extra damages, and awards of attorneys’ fees and costs you spend bringing your case. If you or a loved one is over 60 and lives in California and have been sold an inappropriate or unsuitable 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 final word of caution. Be especially careful with your IRA savings when an annuity peddler recommends you put the IRA in an annuity. Your IRA contributions are already tax-deferred even if the contributions are invested in stocks, bonds, and money market accounts. A second deferral is unnecessary. Particularly when it means that any withdrawal will be subject to a surrender penalty. While the IRS may tax any early IRA withdrawals, a mutual fund or your broker will not charge you a surrender penalty for your withdrawal. But an annuity carrier will. In short, the second deferral isn’t worth tying up your money that way. Lastly, don’t count on annuity “guarantees.” Guarantees are largely illusions; the carrier reserves the right to change the return and hidden fees and costs may wipe out any return.
Contact Us
If you or a loved one lives in California, is over 60, and been sold an unsuitable or inappropriate annuity or suffered loss on a surrender or replacement, contact the Evans Law Firm financial elder abuse and annuity and life insurance attorneys at (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. We are not in any way suggesting that any of these carriers or distributors has done anything wrong. 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
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
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
World Financial Group Insurance Agency, Inc.
[1] Read his article at https://www.thetimesherald.com/story/life/2018/07/13/making-annuity-company-rich/36836069/
[2] Surrenders often result in tax bills too. Withdrawals from annuities are taxed at ordinary rates. While we do not provide tax advice, we can represent you if the carrier or agent causes you to incur a tax loss on an inappropriate surrender or replacement.
