ATTORNEY NEWSLETTER
Unsuitable Investments For Seniors
High Surrender Charges
Switching Or Exchanging Annuities Can Be Costly Mistake
Evans Law Firm, Inc. generally recommends against certain types of deferred annuities for older consumers because these complex, expensive insurance policies include withdrawal penalties (called surrender charges) if you need your money back. That can be a real predicament for seniors who may need funds for increased care costs or emergencies. Further disadvantages for seniors are low returns, high commissions, annual fees and administrative charges, which together operate to reduce returns on the money you have invested in the policy. Annuities may be sold based on incomplete information about these withdrawal consequences or other contract pitfalls. Questionable or incomplete sales tactics and presentations and the policies themselves may constitute violations of insurance laws and elder protections. Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse); Cal. Ins. Code § 790 et seq. (Unfair Insurance Practices Act). Relief for injured seniors includes awards of attorneys’ fees and expenses for bringing your case. Cal. Welf. & Inst. Code § 15657.5. If you are over 60, live in San Francisco or elsewhere in the State of California and own a deferred annuity, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy.
Beware of High Surrender Charges
The most significant fee associated with annuities is often the surrender charge. This is the percentage that a consumer is charged if he or she withdraws funds early. For instance, one of the insurance companies that one State Attorney General’s Office sued charged a retired farmer on a fixed income $6,800 in surrender penalties when he needed access to his $24,000 (most of his net worth) placed in annuities. According to that same AG’s office, another woman was sold an annuity with surrender charges lasting for 16 years, or until she was 95 years old, with the surrender penalty being 17 percent of her investment.
Beware of Agents Urging You to Switch Annuities
The U.S. Securities and Exchange Commission (“SEC”) warns consumers that some sellers of annuities products urge customers to switch to another annuity, a practice called “churning.” Unfortunately, agents may not adequately disclose fees associated with switching investments, such as new surrender fees (which typically start over from the date the product is switched), or significantly altered benefits. Consumers should scrutinize the investment to find out whether the benefits outweigh the costs of switching their investment. California law requires insurance agents to make specific disclosures with respect to the suitability of any proposed policy exchange. See Cal. Ins. Code § 10509.914
Contact Us
If you are over 60 and live in San Francisco or elsewhere in the State of California and have a deferred annuity or universal life insurance contract, we can review your contract for free. You can reach Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or toll free at 1-888-50EVANS or by email at <a href=”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.
