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Money Management & Insurance
New Website Designed to Protect Senior Citizens in
Buying Annuities
Annuity sales training says treat seniors like
'blind 12-year-olds'
By ElderLawAnswers.com
 May 23, 2006 - 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."
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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:
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"Should a senior purchase an annuity? The answer
depends on the person's financial, health and personal situation and
goals. For some, an annuity can be an appropriate part of an overall
financial plan. For others, an annuity can be totally unsuitable," says
AnnuityTruth.org. |
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● 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.
>>> Read updates on this story at
ElderLawAnswers.com -
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