ATTORNEY NEWSLETTER
Retirees And Those Near Retirement Targeted
Seminars And Other Questionable Sales Tactics
Understand How Annuities Work
Insurers, brokers and agents direct annuity marketing toward those planning to retire soon, and recent retirees who have their retirement savings in 401ks or other employer=sponsored plans. Every time, an agent sells an annuity, he or she receives a significant sales commission, and the carrier receives a substantial premium from funds the consumer has saved elsewhere. Evans Law Firm, Inc. recommends against deferred annuities for seniors because consumers lose money due to sales commissions, withdrawal (or surrender) penalties, annual fees, and low returns on invested premiums. Sales and recommended surrenders and exchanges of deferred annuities to seniors may constitute financial elder abuse claims under Cal. Welf. & Inst. Code § 15610.30. Questionable sales tactics, like unannounced home visits or falsified applications, are illegal. See, e.g., Cal. Ins. Code § 790 et seq. (Unfair Insurance Practices Act). If you are over 60, and live in Napa or elsewhere in California and would like us to review your annuity contract, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Questionable Sales Tactics
Sales agent commissions are often as high as 15 percent and are priced into the products. Agents often use “seminars” as a ploy to get retirees or those about to retire for the ostensible purpose of “advising” them on matters of retirement planning. Instead the event turns out to be a full-blown sales pitch for annuities followed by phone calls and home visits. The sales effort can involved some misleading bait. For example, agents often claim a “premium bonus” feature of a deferred annuity contract will repay the policyholder the commission amount but such bonuses are phantoms – you can never take out this “bonus” amount and if you need your money back and surrender your policy the bonus disappears. Equally questionable are the “teaser” rates that look promising but only lasts for a short time and may be reduced by contract fees.
Surrender Penalties
Withdrawal penalties or surrender charges present the biggest downside for seniors on these deferred annuity contracts. Withdrawal penalties/surrender charges under deferred annuity contracts can be as high as 15% of your account value if you leave after one year, and the fees may continue for ten years or more. Surrenders also result in the loss of other policy benefits such as any “bonuses” you may have been promised to offset the sales commission that was paid to the insurance agent out of your premium payment. Further, in addition to the surrender penalty and loss of policy benefits, you may face a tax bill on the amount surrendered at ordinary income tax rates. Contributions to an annuity are tax-deferred, but any withdrawals you make will be taxed at your regular income tax rate, not the long-term capital gains tax rate.
Contact Us
If you are over 60 and live in Napa or elsewhere in California and would like a free review of your policy contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669 (or toll free at 1-888-50EVANS), or by email at <ahref=”mailto:info@evanslaw.com”>info@evanslaw.com</a>.
Some significant issuers and distributors of 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. 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 International Group, Inc. (AIG)
American National Life Insurance Company
Athene Annuity & Life Assurance Company
Athene Annuity and Life Company
Athene USA
Aviva Life Insurance Company
AXA Equitable Financial Services, LLC
AXA Equitable Life Insurance Company/AXA US
AXA Advisors, LLC
Brighthouse Financial, Inc./MetLife
EquiTrust Life Insurance Company
Fidelity & Guaranty Life Insurance Company
Genworth Financial, Inc.
Genworth Life and Annuity Insurance Company
Genworth Life Insurance Company
Guggenheim Partners, LLC
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
Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.
Minnesota Life Insurance Company
Nationwide Investor Services Corporation (NISC)
Nationwide Life and Annuity Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Investment Services, LLC
Northwestern Mutual Life Insurance Company
Northwestern Mutual Wealth Management Company
Pacific Life & Annuity Company
Pacific Life Insurance Company
PacLife
Security Benefit Corporation
Security Benefit Group, Inc.
Security Benefit Life Insurance Company/Guggenheim Partners
Security Investors, LLC
Security of Denver Life Insurance Company/Voya
Transamerica Life Insurance Company
Voya Financial Advisors
Voya/Reliastar Life Insurance Company
World Financial Group Insurance Agency, Inc.
