With the recent declines in the stock market, some people are finding that their retirement income is below what they expected. The thought that things could get even worse is making many scramble for some kind of security for their golden years. It is this feeling that insurance companies are attempting to exploit with a number of fraudulent financial products. These products promise good returns, but they drain the liquid assets of seniors, and provide limited returns that are sometimes only appreciable if a senior lives to 110 or more.
These at best inappropriate and at worst completely fraudulent financial products are sold at meetings held at senior centers, where they are touted by so-called "financial experts," who receive high commissions for the products.
There are many insurance companies that are guilty of promoting fraudulent or inappropriate financial products to seniors, including:
- Great American Life
- OM Financial Life
- American Investors Life
- Midland National Life
- EquiTrust Life
- Lincoln National
- Sun Life
- Jackson National
If you purchased a financial product from one of these companies, or have been offered them during a seminar promoting financial security, you should contact the fraudulent financial products attorneys at Long & Long today: (877) 724-7017.
There are many different types of financial products offered by these companies, but the most commonly offered is the annuity. Annuities promise features that make them seem promising to people concerned about volatility in the market. First, they offer lifetime income payouts, which begin once the annuity reaches maturity. Second, they offer a guaranteed death benefit, which especially appeals to those who have loved ones who depend on them.
But these benefits can come at a high cost. The annuities are expensive to maintain, charging an annual expense of 2 % or more. And the annuities have what is known as a "surrender period," or a period during which the investor must pay a hefty fee to withdraw money. This surrender period may be as long as 20 years, and the fee for early withdrawal can be as high as 20%, which is often not made clear to investors.
And even the benefits are not as represented. The lifetime income payouts are taxed at the same rate as regular income, which can be a significant financial drain on the resources. The same is true of the guaranteed death benefit, making it different from life insurance payouts which are not subject to income tax.
Because of the costs, annuities are rarely a good investment option for anyone, and they are especially poor choices for seniors.
If you or a loved one has been sold an inappropriate annuity or other financial product, you may be able to recover your investment with a fraudulent financial products lawsuit. Schedule a free, no-obligation consultation with the financial exploitation of seniors lawyers at Long & Long today by completing the form on this page.