U.S. Department of Labor's Disability.gov site is a one-stop source of government information relevant to people with disabil...Read more
Web Site Combats Annuity Sales Abuses
- May 5th, 2008
An article in the Wall Street Journal in 2002 described a training session at "Annuity University," which billed itself as the "nation''s first and foremost Annuity Sales Training School." Included in training session advice on how to sell annuities to seniors was the following: "Treat them like they're blind 12-year-olds . . .;" "There's the technical answer," . . . and "there's the senior answer;" and "Tell them you can protect their life savings from nursing-home and Medicaid seizure of assets. They don't know what that is, but it sounds scary."
Across the nation, the elderly are being targeted by salespeople selling annuity products. For some seniors, an annuity may be an appropriate part of an overall financial plan. But for others an annuity is totally unsuitable. Often, as the above high-pressure sales tactics attest, people are not being told in a clear way about all aspects of the annuities they are being offered.
To help older adults and families make better decisions about annuities, the Healthcare and Elder Law Programs Corporation (H.E.L.P.) has created a Web site, annuitytruth.org. The site features H.E.L.P.'s new seven-part "Special Report: Annuities and Older Adults," as well as a list of federal and state agency contacts for making complaints if a person has been sold an annuity in unsuitable circumstances. Note that the site refers to "Medi-Cal," which is the name for Medicaid in California, where the site was created.
H.E.L.P., which is a community-funded, non-profit information resource for older adults, offers the following list of circumstances in which the purchase of a deferred annuity by an older adult is highly questionable:
- The annuity has surrender charges for longer than six years.
- You are likely to need principal back from the annuity while surrender charges will apply.
- You are being told that it will help you protect assets under the Medi-Cal (Medicaid) nursing home rules.
- The salesperson will not tell you how much he or she will earn from selling you the annuity.
- The salesperson will earn a commission greater than four percent.
- The annuity will be purchased and held within an IRA or other tax-deferred account.
- The annuity will be purchased with money that you withdraw from an IRA or other tax-deferred account.
- You don''t need to pay income taxes (with or without the annuity).
- You''re being asked to convert a high percentage of your assets into deferred annuities.
- The annuity is a variable annuity, and you are unable to leave the principal untouched for 15 or more years.
Local Elder Law Attorneys in Ashburn, VA
Law Offices of John L. Laster
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...
Hale Ball Carlson Baumgartner Murphy PLC
Loretta Morris Williams is a certified elder law attorney by the National Elder Law Foundation. Ms. Williams was admitted to the Council of Advanced Practitioners, National Academy of Elder Law Attorneys (NAELA) in 2012. She serves as President of the Virginia Academy of Elder Law Attorneys. Ms. Willia...
Needham Mitnick & Pollack, PLC
Susan Pollack served as Chairperson of the Falls Church Senior Citizens Commission from 1997 to 2011 and was on the Executive Board of the Falls Church Education Foundation. She has also served on the Board of Directors of the Alzheimer’s Association of the National Capital Area and is a member of the Arlington B...