ATTORNEY NEWSLETTER
Beware Fixed Index Annuities
Phantom Bonuses
With over $200 billion in annual sales the annuity industry is big business. Annuities come in a variety of forms, all of which are complex. Indexed annuities (sometimes branded “fixed indexed annuities”) are particularly complex. Agents push them in volatile markets, claiming the contracts offer the upside of market increases (the “indexed” part) with downside protection (the “fixed” part) but glossing over fees, risks and downsides. Our lawyers recommend avoiding deferred annuities of any kind, including fixed indexed annuities, especially for seniors.[1] At a minimum, take a close look before you buy. If you’re over 60 and already purchased a contract here in California and have suffered a loss due to cancellation, replacement, full or partial surrender or high fees, call the California financial elder abuse and annuity attorneys at Evans Law Firm, Inc. today at 415-441-8669 for a free review of your policy. A list of major carriers in California appears below.
A lot of the sales pitch will be packaged around “bonuses” the policies offer which make the returns look impressive on paper. Promised “bonuses” include premium and interest bonuses. An agent may claim, for example, that a contract’s interest bonus will push a 6% return up to 9%. Great claim, but false in reality. True contract returns are more like 1-3% (or less) after fees so any “bonus” is more like 0.5-1.5%. And there’s more. In order to receive any extra, the policyholder must keep the annuity in deferral for at least 10 years, refrain from any withdrawals, and select among a limited range of income options.
That’s what makes these contracts so risky, especially for seniors. Your money will be tied up for a long time, subject to hidden fees and expense increases, and any early withdrawal will be subject to charges and forfeiture of any “extra” return in your account. (Withdrawals will also be subject to tax at ordinary rates.) Even if you hold out to the end and refrain from early withdrawals, commissions and other fees erode your return. Bottom line is, beware. Fixed index annuities are extremely complicated, and this is just a brief overview. Always consult a qualified professional who does not stand to gain from any purchase and your tax advisor before making any purchase, replacement or surrender.
Contact Us
If you or a loved one has suffered loss on a fixed indexed annuity or any other annuity in California, contact Contra Costa County and California annuity and financial elder abuse attorney Ingrid M. Evans and the other attorneys at Evans Law Firm 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 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.
Annuities and life insurance produce large sales commissions for brokers but are often inappropriate products for consumers, especially seniors. Leading providers and distributors of life insurance and 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. 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
Ameriprise Financial/Securities America, Inc.
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
Lincoln Financial Group
Massachusetts Mutual Life Insurance Company
Merrill Lynch Life Agency Inc.
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
National Western Life Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
North American Company for Life and Health Insurance
Northwestern Mutual Life Insurance Company
Oxford Life Insurance Company
Pacific Life Insurance Company
Principal Financial Group
Prudential Life Insurance Company
Raymond James Insurance Group
RiverSource Life Insurance Company/Ameriprise Financial
Securities America, Inc./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] We do not provide investment or tax advice but our litigators represent senior policyholders who lose money through cancellations, surrenders or fees on these contracts.
