ATTORNEY NEWSLETTER
What If I Bought An Annuity I No Longer Want?
What happens when you want to get out of an annuity you bought? You can ask to surrender it. But surrenders may be costly. If you have owned the annuity for less than ten years or so, you may have to pay a surrender charge. That fee could be as high as 15% if you pull out in the early years of the annuity term and you may lose the value of income riders and other benefits you have paid for. You also will have to pay income tax on all the investment earnings in your annuity, and if you are younger than 59 ½ you typically will be hit with a 10% early withdrawal penalty by the Internal Revenue Service (IRS). We at Evans Law Firm do not give investment or tax advice but we represent clients, including seniors, who suffer surrender penalties and tax losses on surrenders of unsuitable annuities. If you or a loved has suffered a surrender penalty or tax loss on an annuity surrender, call the Marin County and California annuity and financial elder abuse lawyers today at Evans Law Firm, Inc. (415)441-8669 for a free review of the terms of your annuity including surrender provisions.
The financial impact of an annuity surrender shows just how illiquid these investments are. If for example, you have the same amount of money in a bond or equity fund and want to move the money to another investment, you will pay capital gains tax on your earnings but you will not be hit with a withdrawal penalty or tax penalty. Annuity salesmen emphasize the tax deferral benefits of annuities over such outright investments but keep in mind that your bond or equity fund can be an IRA or other private retirement investment plan that is also tax deferred. While you might pay the 10% IRS penalty on withdrawals from such accounts before age 59 ½, the IRS provides exceptions for medical expenses, health insurance, college costs, a first home purchase and the like. There are no broad exceptions to early annuity withdrawals.
Each situation is different and we at Evans Law Firm do not provide investment or tax advice when it comes to purchases and surrenders. We do however represent clients who have suffered losses from surrendering an annuity they no longer want and that may very well have been unsuitable in the first place. You may also have incurred high commissions, rider fees, and other charges that are part of your economic loss. California law provides additional protections for senior buyers who have suffered these types of losses, including extra damages and mandatory attorneys’ fees in cases of financial elder abuse.
Some of the major annuity and life insurance providers in California are:
Allianz Life Insurance Company of North America
Allstate Life Insurance Company
American Equity Investment Life Holding Company
American National Insurance Company
Athene Annuity and Life Company
AXA Equitable Life Insurance Company
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Forethought Life Insurance Company
Genworth 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 Financial Group/The Lincoln National Life Insurance Company
MassMutual/Massachusetts Life Insurance Company
MetLife/Metropolitan Life Insurance Company
Midland National Life Insurance Company
Mutual of Omaha
New York Life Insurance Company
Pacific Life Insurance Company
Prudential Life Insurance Company
Security Benefit Life Insurance Company/Guggenheim Partners
Transamerica Life Insurance Company
Voya/Reliastar Life Insurance Company
Contact Us
If you or a loved one been sold an unsuitable annuity contact Marina County and California annuity and financial elder abuse attorney Ingrid Evans and other attorneys at the Evans Law Firm at (415) 441-8669 for a free consultation, 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 FINRA arbitration, 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.
