ATTORNEY NEWSLETTER
Retirement, 401(k) Accounts, and Annuities
Although many consumers and seniors have heard of annuities, it’s not always obvious how prevalent they are in other financial products. Many “senior financial advisors,” claiming to offer specialized products and services for the elder population, try to sell bespoke blends of various types of products and services to their customers. Often, these “advisors” have little or no meaningful certification or experience, and the products they sell may be either complete scams or expensive, complicated schemes made up from the dregs of the financial products marketplace.
Such “advisors” like to include annuities, which have a reputation among some seniors as a reliable source of retirement income. However, in recent decades, annuities have become far more complicated and risky, while offering no additional benefits to the client. Instead, they contain numerous hidden and obscured costs, including surrender penalties, liquidity costs, management costs, and many other mechanisms designed to ensure that the annuity company turns a profit on their product. In fact, many of these policies, especially variable and indexed annuities, offer substantial commissions for the broker, (paid for by the consumer) since they are so valuable to the insurance company.
One product that often includes annuities are IRA and 401(k) plans. They are designed to help insure that seniors can have access to guaranteed lifetime income, but as we have discussed in the past, it is not uncommon that elder expecting their annuities to provide guaranteed income discover that their plans don’t life up to the marketing, and are often left with substantial fees, or far less income than they expected.
Because of this, the Department of Labor has taken a very strong stance on ensuring that consumers are protected from unscrupulous or fraudulent annuity and life insurance policies. In a response to a recent report suggesting that the DOL should offer legal protection to fiduciaries offering 401(k) plans that include variable annuities, the Department offered a strong rebuttal, arguing that such protections, which would hinder or prevent those who paid into poorly or fraudulently designed 401(k) plans from suing their broker, would erode consumer protections and force seniors and retirees to assume the burden of evaluating and examining the products on the market.
Such protections are essential in avoiding a scenario where those looking to participate in a 401(k) plan would be solely responsible for ensuring they were not being sold a bill of goods. Rather than allowing fiduciaries to avoid the responsibility to properly carry out their duties, the DOL has elected to ensure that consumers have unfettered access to the courts in pursuing recompense for faulty financial products, something that our Los Angeles annuity fraud attorneys consider essential in ensuring justice in financial elder abuse cases.
Some of the major annuity and life insurance providers are:
- Aviva/Athene/Accordia Life Insurance Company
- Transamerica Life Insurance Company
- John Hancock Life Insurance Company
- Bankers Life Insurance and Casualty company
- Massachusetts Mutual Life Insurance Company
- Midland Life Insurance Company
- North American Company for Life and Health Insurance
- Pacific Life Insurance Company
- Prudential Life Insurance Company
- Genworth Life Insurance Company
- ING USA Annuity and Life Insurance Company
- Lincoln Benefit Life Company
- Metlife/Metropolitan Life Insurance Company
- Unum Life Insurance Company of America
- Voya/Reliastar Life Insurance Company
If you or a loved one have been the victim of an improperly sold or administered annuity or life insurance product, contact the Los Angeles annuity fraud attorneys at Evans Law Firm. Our attorneys have experience handling cases involving complex financial contracts and insurance companies, and can help guide your case through a jury trial or toward an equitable settlement. We can be reached at (415) 441-8669, or by email at info@evanslaw.com.
