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Guarding Your Wealth for Senior Citizens
Equity-Indexed Annuities: Seeking Legal Recourse
When Promises Fall Short
Tens of thousand of senior citizens fall prey to
these sales pitches
By Jeffrey D. Voudrie, CFP
 Oct. 19, 2007 - 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
SeniorJournal.com (click) or on
www.guardingyourwealth.com.)
Unfortunately, tens of thousand of 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.
If you have a specific question or would like more
information, give me a call toll-free at 1-877-827-1463 or you can also reach me by email at
jeff@guardingyourwealth.com.
I will answer your financial question FREE.
About Guarding Your Wealth:
“Guarding Your Wealth” is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive that may not have appeared in
SeniorJournal.com.
Guarding Your Wealth for Seniors, on
SeniorJournal.com, is
a collection of columns by Voudrie that deal with issues of particular
interest to senior citizens.
Click here
for all columns.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to select
private clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For bookings, email
jeff@guardingyourwealth.com.
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