As you may have heard, deferred annuity sales have reached an all time high in the United States. The majority of the purchasers of these financial instruments are retirees and the elderly. In fact, the average purchaser age of deferred annuities is over 60. Many unknowing retirees have invested their life savings, or a large portion thereof, in these financial instruments believing they are safe, secure and provide immediate easy access to the funds invested.
Many companies are finding themselves in litigation across the United States regarding the sale of deferred annuities to seniors. Recently, Dateline NBC ran a segment regarding the unscrupulous sales tactics of agents who represent large insurance companies such as Allianz. The segment featured investigative reporter Chris Hansen, going undercover and performing a “sting operation” with the help of his “Aunt Alice” who posed as a senior interested in purchasing a deferred annuity. The gist of the television segment involved the company’s and agent’s reluctance to disclose the fact monies deposited in these investments are not liquid and in fact have extremely high and severe penalties for withdrawals during the early years of the annuity. Only under certain limited circumstances (such as major health problems) can a purchaser of a deferred annuity withdraw his or her entire investment without penalty. Otherwise, withdrawals in excess of 10% of the total value of the annuity incur substantial surrender charges (sometimes as high as 10% to 12%) for the first five to ten years.
Anyone considering the purchase of a deferred annuity should seek the advice of a professional investment advisor, as opposed to just an insurance agent, and furthermore have a qualified legal professional evaluate any such purchase prior to making a decision. Our firm is handling these cases and Jay Aughtman is the contact lawyer. If you want more information contact Jay at 800-898-2034 or email him at Jay.Aughtman@beasleyallen.com.
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