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One of the main reasons I
so adamantly oppose the use of Equity-Indexed Annuities is because
what the investor receives isn’t anything like what they expected.
What should you do if this happens to you? Read on to find out.
If you are retired or near retirement. You’ve undoubtedly been told
about the ‘it’s-too-good-to-be-true’ benefits of an equity-indexed
annuity. (I’ve written extensively about why I do not like
equity-indexed annuities. You can find these articles at
www.guardingyourwealth.com.) Unfortunately, tens of thousand seniors
are falling prey to these sales pitches.
I know because I hear from many who eventually realize the mistake
they’ve made. Many have been duped into investing all of their
liquid assets into them. Some are shocked to find out that after 10
years, they still can’t get their indexed return unless they
annuitize for another 5 years. All of them face huge surrender
penalties. And the vast majority of these investors are seniors for
whom such annuities are totally unsuitable.
Most people don’t realize what they’ve done until they need to do
something with that money. Having contacted the insurance company to
get THEIR money, many find out that they’ve been ‘lied to,
ripped-off and deceived’, says Cristina Pierson of Gordon Hargrove &
James P.A.
Cristina works with John Hargrove, a Florida attorney that regularly
represents the elderly in annuity litigation. “Many have lost their
life savings in a scheme to manipulate citizens into purchasing
equity-indexed annuities,” Hargrove says.
Hargrove should know what he is talking about. He has been
litigating these cases since 2001 and was involved in a class-action
lawsuit against American Equity Investment Life Insurance Company.
Other insurance companies are being sued over alleged abuses
relating to equity-indexed annuities. A consumer fraud federal
class-action lawsuit was filed in Minnesota in March of 2006 against
Allianz Life Insurance Company of North America, specifically
related to the Master Dex 10 Annuity, the 10% Bonus PowerDex Elite
Annuity and the Bonus Dex Elite Annuity. AmerusLife is named in a
separate class-action lawsuit filed in Florida.
Here’s what you should do if you feel stuck in an equity-indexed
annuity and want to get out.
First, send a letter to the insurance company stating the complaint.
Explain your situation and financial status. Be direct. For
instance, “How could you do this to someone who is 80 years old?” If
you feel you’ve been lied to and deceived, make sure you say so in
the letter. Specifically state how much you have lost or stand to
lose. Tell them specifically what you want them to do. For instance,
maybe all you want is to get your money back. If so, tell them. Ask
that they respond to you in writing.
Consider seeking legal council so the letter gets sent on the
attorney’s letterhead. For some reason, insurance companies always
seem to pay more attention to those letters!
Second, contact your State Department of Insurance and formally file
a complaint against the agent and the insurance company. The
Department of Insurance can’t help you get your money back, but
filing the complaint may keep others from falling prey.
Urge them to pursue the matter to their fullest ability and ask them
to discipline the agent. Talk to your friends. You aren’t alone. If
this happened to you it has happened to others in your area. If
possible, band together as a group to file the complaints—it will
carry much more weight.
Third, get other family members involved. Don’t feel guilty and try
to hide what has happened. They can help you find an attorney. They
can plead your case on your behalf to the insurance company. And
they can help protect you in future financial decisions.
If legal council is sought, it’s important that you find an attorney
who is experienced in dealing with these cases. Search the internet
to find articles that mention the lawyers involved in these cases.
Also, reputable attorneys will take your case on a contingency
basis, receiving their fee from what they negotiate with the
insurance company. You should receive the full amount recovered, not
that amount less attorneys’ fees.
If you’re a victim of equity-indexed annuity fraud, do something
about it. There are ways to recover what you’ve lost and regain
control of your money.
Have a financial question? Go to http://www.guardingyourwealth.com
and click on ‘Ask Jeff’.
In addition to being a nationally syndicated columnist and Certified
Financial Planning Practitioner, Mr. Voudrie provides personal,
private money management services to clients nationwide |
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