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San Francisco Annuity Fraud Attorneys Explain Why the World is Turning on Annuities
What’s going on with annuities?
It seems like annuities are suddenly at the center of a whirlwind in the financial industry. A scathing report by Senator Elizabeth Warren, a story in Forbes: just what is it about annuities that’s raising all this ruckus? The products have been sold for years, and represent hundreds of millions of dollars in the US alone. For a long time, they have been seen as a fairly uncontroversial part of retirement finance. So what’s changed? In this blog, we’ll ask our San Francisco annuity fraud lawyers why public opinion is starting to turn against annuities.
Annuity basics
Essentially, an annuity is designed to take an initial large investment, use it to turn a modest and stable investment, and distribute the earning back to you in a trickle throughout your retirement. The most basic annuities do exactly that, but there are a wide variety of annuities, ranging from complicated to incomprehensible. Some track stock market indices, some use other markers, and many contain penalties for actions like early withdrawal, surrender, and sometimes for heirs in the case of death. These penalties and charges can make it difficult to properly plan for retirement if they are not properly disclosed.
What’s Happening Now?
As the baby boomers enter retirement, the amount of scrutiny surrounding elder financial abuse has begun to increase, and many people are starting to examine the legal issues surrounding annuities. Elizabeth Warren, in her report, complained that it is difficult or impossible to prevent “advisors” from steering elders into annuities that can hurt or damage their financial plans while providing large commissions and bonuses for the agent. In fact, many “senior financial advisors” have no training in that field, despite their assertions. Additionally, some annuity products are sold without a proper explanation of the risks and limitations, and without a realistic projection of how much customers can expect to receive in their annuity checks. In fact, Warren reported that kickbacks for annuity salespeople costs customers as much as $17 Billion per year, with required disclosures about these costs buried deep in the fine print.
What’s being done about it?
Evans Law Firm and other California annuities fraud attorneys are committed to addressing this problem in the coming months and years. In addition to warning consumers to think carefully before they invest in an annuity, it’s necessary to build and strengthen the legal protections that prevent the improper sale and administered annuities. Choosing the wrong annuity can lead to problems with Medicaid,Medi-cal, and SSI payments, and wreak havoc on a retiree’s financial plans.
Who sells annuities?
Major sellers of annuities include:
- Transamerica Life Insurance Company
- John Hancock Life Insurance Company
- Prudential Life Insurance Company
- Metlife Investors USA Insurance Company
- Genworth Life Insurance Company
- ING USA Annuity and Life Insurance Company
- Lincoln Benefit Life Company
- Metropolitan Life Insurance Company
- Unum Life Insurance Company of America
- Reliastar Life Insurance Company
The products sold by many of these companies include liquidity charges, surrender charges, and death benefits, and are sold with a commission that might be up to 15% of the total cost of your annuity.
Who should you call?
Evans Law firm is a plaintiff’s firm that handles annuity, insurance, and banking fraud, qui tam and whistleblower claims, and elder financial abuse cases. Our team of lawyers has experience dealing with the complicated language of annuities and has worked on such cases in the past. If you think that you or a loved on is a victim of an improperly sold or administered annuity or life insurance policy, contact the Evans Law Firm at (415) 441-8669 or by email at info@evanslaw.com
