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Annuities Alert for Senior Citizens
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Annuities Alert for Senior Citizens: There Is No Such Thing as a Free Lunch. Are you the victim of deferred annuities fraud?
Tips to consider before investing.
Senior citizens have probably all seen the advertisements that look much like invitations for a free lunch and investment seminar. These advertisements are found in your daily newspaper, regional weekly newspaper, a senior citizen publication, or mailed to your home. After all, who can resist a free lunch and perhaps you might learn some investing tips. According to Anapol Schwartz partner, Joel Feldman, Esquire, "It is not only the contractors and identity theft scammers that seniors have to watch out for-it is also reputable insurance companies whose agents ignore their responsibilities in order to generate fat commissions."
When a 73-year-old man contemplated using his life savings to buy a deferred annuity policy from Allianz Life Insurance Co., he asked his insurance agent what would happen if he needed some of the money to pay his wife's medical bills. The agent told him to buy an Allianz Flex-Dex Bonus annuity and assured him that the product was flexible enough to accommodate his needs. So the man used the $40,000 he had tucked away to do just that. But when he tried to dip into those funds to pay the medical bills that he knew were coming, he was informed of a whopping $6,000 surrender charge because the annuity had yet to mature.
The Minnesota Attorney General sued Allianz, accusing them of violating Minnesota law by offering and selling annuities to senior citizens that were unsuitable for their financial needs. The attorney general's suit alleges that Allianz failed to adequately disclose to senior citizens purchasing the deferred annuities that their money could be tied up for as long as 15 years; that they could not cash in their annuities early without paying a hefty penalty; and payments advertised as immediate bonuses also were not payable for up to 15 years. The suit claims Allianz failed to properly supervise the sales of such products and paid agents lucrative commissions to sell them.
Deferred annuities are investment products designed to provide income over a period of years. The investor doesn't begin receiving payments until after a certain period of time called a maturity date.
As a senior citizen, consider if a deferred annuity is the right investment vehicle for you. Here are a few tips: Stop being so trusting. A well-dressed corporate insurance agent may not look like a typical scammer but appearances can be deceiving. Before signing on any dotted line and transferring your life savings, get a second independent opinion just like you would for a major medical decision. Do online research from a reputable senior advocacy or consumer group. You should not be pressured into making an immediate decision. "Remember," Feldman advises, "deferred annuities generate some of the biggest commissions in the investment industry but they can tie up your savings for up to 15 years and after your death, leave your heirs with large tax bills."
Since 2000, Allianz has sold more than 4,900 deferred annuities, worth about $260 million to Minnesotans over the age of 70. Allianz Life Insurance is a nationwide company and has offices in New Jersey and Pennsylvania.
Are you a senior citizen who is a victim of an unscrupulous insurance salesperson who sold you a bunch of false promises along with deferred annuities? This applies to Allianz deferred annuities or any other insurance or investment company.
Are you a senior citizen who is a victim of an unscrupulous insurance salesperson who sold you a bunch of false promises along with deferred annuities? This applies to Allianz deferred annuities or any other insurance or investment company.