Senior Insurance Annuity Alert

For several years, Bonnett, Fairbourn, Friedman & Balint, P.C. has battled insurance company misconduct and successfully protected the rights of consumers to receive the insurance benefits they were promised. Now our Law Firm is at war again – this time, protecting seniors who have been misled into purchasing an insurance annuity. The scheme used by insurance companies has recently been the subject of an investigation by the Attorney General of California, resulting in a report stating that living trust mills are tricking seniors into using retirement assets to buy annuities (see enclosed news release). Further, the American Association of Retired Persons (“AARP”) issued a “Scam Alert” bulletin about the schemes used by insurance companies against seniors. See AARP Bulletin, “Scam Alert . . . Deviled Nest Eggs,” June 2005 and the New York Times, “Who’s Preying on Your Grandparents?,” May 2005.

The scheme works like this:

Someone offers to provide the senior with advice regarding estate or financial planning for retirement. They often offer to help fill out paperwork for something called a “living trust.” Many times they will make this service very convenient by offering to come to the senior’s home. As part of their planning, they ask to see all the senior’s financial information. Because the seniors want good advice, they willingly produced everything they were asked for including bank balances, life insurance policies, mortgage payments, stock statements, and even their will.

Next, the individual will assist the seniors in filling out forms and act like they’re giving advice. But what they never tell the seniors is that they’re really insurance agents, not financial advisors, and their real goal is to find out how much money is available so they can persuade their senior client to buy an annuity from one of the insurance companies they represent.

A few weeks later, the individual will come back and try to persuade the senior into buying a “deferred annuity.” They usually assure the seniors that they’re safe and secure and stress that the “deferred annuity” will be a good investment tool. But, what most seniors don’t realize, is that they can’t get their money out for years without paying substantial withdrawal penalties – sometimes as high as 22 percent. Also, in most cases, the annuity’s monthly payments don’t begin for 10, 15 or even 20 years.

Our office has filed several lawsuits for seniors addressing this problem. If you’ve purchased an insurance annuity, and you were 65 or older when you bought it, we encourage you to speak with an attorney. Feel free to contact our Law Firm for a free evaluation, or contact your family attorney, or a certified financial planner to carefully review your materials.

Bonnett, Fairbourn Friedman & Balint, P.C.
2901 N. Central Avenue, Suite #1000
Phoenix, AZ 85012
Phone: (602) 274-1100
Toll Free Number: 1-800-847-9094
Fax: (602) 274-1199