Class Action: Allianz Annuity Defrauds Customers of Their Full Investment

Allianz Life Insurance Co. of North America was recently sued in an annuity haircut class action lawsuit in California state court and is now facing breach of contract claims regarding alleged hidden costs and penalties of Allianz’s two-tiered annuity products.

Background on Allianz

Allianz has reportedly cornered the market on deferred annuity policies and has made a lucrative profit off their unique and unusual “two-tier” annuity.

According to reports and Allianz annuity lawsuits, Allianz makes promises to policyholders about the alleged gains and values of these two-tier Allianz life insurance deferred annuity plans only to line the company’s pockets while denying policyholders their due compensation.

According to plaintiff Diana V. Sanchez, the company makes billions of dollars each year in sales by convincing consumers that they will gain higher returns and increased value if these policyholders choose to defer annuitization for at least five years as well as accepting annuity payments for at least 10 years.

However, according to the Allianz class action lawsuit, the company allegedly applied secret “haircuts” to the annuity funds when a consumer took out annuity payments during the five to 10 advertised contract years.

This is not the first time Allianz has been accused of breach of contract regarding their annuity policies; back in 2011, the company settled a $100 million Allianz class action lawsuit about an annuity scheme that targeted 65 years and older policyholders.

Similarly, this latest Allianz annuity haircut class action lawsuit seeks to represent current policyholders under the age of 65 as well as those over the age of 65 who allegedly bought Allianz annuity policies after the termination of the previous settlement’s Class Period.

Allianz Class Action Lawsuit

Sanchez’s complaint alleges Allianz makes billions of dollars in sales through their annuity products by employing steep penalties on policyholders who do not follow the terms of the annuity product.

For example, a policyholder that annuitizes or withdraws money from the annuity account during the first five years of the policy or over less than 10 years of the annuity will have some of their paid premiums and gained values of the annuity accounts taken away.

The plaintiff states that a typical deferred annuity policy applies surrender charges to policyholders at about 10 percent or less and tend to decrease to zero over a 10 year period.

However, an Allianz annuity policy starts with large surrender charges and ever-increasing penalties, sometimes totaling more than 50 percent of a consumer’s annuity policy value.

Sanchez has asked the court for several forms of relief for Allianz’s alleged misconduct, including restitution of improperly collected/withheld funds, injunction on future violations by the company, special damages, as well as attorney’s fees.

The Allianz Annuity Fraud Class Action Lawsuit is Diane V. Sanchez v. Allianz Life Insurance Co. of North America, Case No. BC594715, in the Superior Court of the State of California, County of Los Angeles.

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If you or your loved one purchased a bonus annuity, life insurance policy or Medicaid qualified annuity and it did not turn out as promised, you may need to have an investment fraud lawyer review the policy, the payments, and the potential benefits. You may be surprised at what they find, and you may even qualify for financial compensation beyond what the policy promised.

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