ATTORNEY NEWSLETTER
Disadvantages Of Deferred Annuities
Compare To Other Investments
Withdrawal Penalties And Taxation
As a significant part of our financial elder abuse litigation, Evans Law Firm, Inc. has represented older consumers lose money on deferred annuities as the result of high sales commissions, annual fees and rider fees; returns on premiums that are considerably lower than advertised; and, penalties incurred on withdrawals. For those reasons we recommend that seniors avoid deferred annuities. Annuity surrenders result in withdrawals penalties but also have tax consequences. We do not provide tax advice at Evans Law Firm, but we have seen older consumers faced with large tax bills upon a surrender of a contract. Sales of unsuitable deferred annuities to seniors may also constitute financial elder abuse under Cal. Welf. & Inst. Code § 15610.30 and senior policyholders may have financial elder abuse claims against agents and carriers. If you are over 60, and live in Napa or elsewhere in the Bay Area or anywhere in California and have experienced an economic loss as a result of the sale of an unsuitable annuity or other investment product, including a fixed indexed annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Disadvantages Of Deferred Annuities Versus Other Investments
Commissions. Many annuities are sold by brokers who collect high commissions for doing so, with some commissions as high as 10%! If you don’t see a commission fee broken out for you, that doesn’t mean it’s not there. It may simply be baked into the annuity’s operating costs, for which you’re charged.
Surrender Penalties. You can add and remove money from lots of investment accounts, but when you buy an annuity, that money is generally gone. You will be able to get your money back if you pay a hefty “surrender” fee. Surrender fees can be as high as 15% and the surrender periods can last 10 years or more. Moving your money out of mutual fund investments will not be subject to these kind of withdrawal penalties.
Annual Fees. Most annuities charge annual fees. It’s not unheard of to be paying between 2% and 3% per year. For context, managed mutual funds will often charge around 1% to 1.5% per year, while ETFs (exchange-traded funds) will often charge 0.50% or less. If your annuity is averaging a 7% annual return but charging you 3% per year, you’re losing a lot of ground. Keep in mind, too, that on a $100,000 investment, a 3% charge amounts to a whopping $3,000 — per year!
Contact Us
If you are over 60 and live in Napa, San Francisco or elsewhere in the Bay Area or throughout California and have lost money on a deferred annuity or indexed universal life insurance contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Ingrid will pursue all remedies available to you against all parties responsible, including restitution (getting your money back), extra damages (to punish the fraudulent conduct) and awards of attorneys’ fees and costs to the senior forced to bring an action against the wrongdoers.
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.
