ATTORNEY NEWSLETTER
Agents Target Seniors For Sales Of Deferred Annuities
Disadvantages For Seniors
Beware Of Recommendations To Switch Contracts
Insurance agents target seniors for sales of deferred annuities but these insurance products are especially complex. Deferred annuities can run from 50 to over 100 pages long with endorsements (called riders) sold to enhance your benefits. Evans Law Firm, Inc. recommends against deferred annuities for seniors because we have seen too many older 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 Sonoma, San Francisco 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.
Reasons To Avoid Deferred Annuities
- Annuities are long-term contracts with penalties if cashed in too early. Penalties can be as high as 15% and penalty periods can last ten years or more.
- Annuities require you to lose control over your investment. Since you are locked in by steep surrender penalties, you cannot switch for a better interest rate without paying a penalty.
- Some annuities earn little to no interest. Annual fees and rider fees erode your return on investment.
- Guaranteed income cannot keep up with inflation in certain types of annuities.
- The annuity might not provide a death benefit to your beneficiaries. An agent may sell you a death benefit rider but that costs more and if you have to surrender your policy, the benefit and the fees you paid for it are lost.
- Fees can be high. Combined administrative fees and rider fees can be as high as 2.5-3% per year, substantially eroding your return.
Beware of Agents Urging You to Switch Annuities
Some agents 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 has specific rules an agent must follow when recommending a switch (Cal. Ins. Code § 10509.10 et seq.), and violation of those rules may also constitute financial elder abuse.
Contact Us
If you are over 60 and live in Sonoma County, San Francisco or elsewhere in the Bay Area or throughout 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.
