Seniors at Heightened Risk for Annuity Fraud

As reports of annuity fraud grows, seniors should be aware of any red flags when working with a financial adviser.

Variable annuities can often seem like they have a lot of upside for investors, since they are pegged to standards like the S&P 500 that can increase rapidly during bull markets. Yet in the overwhelming number of cases, senior fraud lawyers and journalists say they simply are not worth the hassle and costs.

To start, many financial advisers who take a commission make themselves and their bosses up to 8 percent of the amount older Americans invest, or in plain terms nearly one dollar out of every 10 put into a variable annuity. Making that money back would require significant gains that are usually not possible with a product offering modest returns.

More importantly for seniors, including many who have now filed annuity fraud lawsuits, contractual language can mask the fees that fund managers can charge for choosing stocks and other tools to meet guaranteed rates of returns. The tax benefits that younger investors might find attractive are much less so for those who have retired.

Yet part of the problem for seniors is that the paperwork for any of these types of investments include line after line of fine print. Potential clients rely on financial advisers who have a vested interest in every sale they make. Moreover, banks and other investment firms often include onerous contract terms that require earlier withdrawals that can limit the benefit of survivor benefits that used to be a strong selling point for the products.

Of course, variable annuities are just one instance in which complicated financial options can be problematic for older Americans. Life insurance fraud is also a common concern whether by misrepresenting the terms and conditions or by overestimating a person’s net worth so it is impossible to keep up with the necessary premiums. The complaints in annuities fraud lawsuits and ones involving life insurance fraud have increased in number in Florida and throughout the country.

If you believe you or a loved one have been the victim of a senior financial scam, you may have legal options available to you. Learn more by visiting the Life Insurance, Annuities Fraud Class Action Lawsuit Investigation now. You can fill out the short form there for a free consultation with one of our partner senior fraud lawyers. Life on a fixed income can be very nerve-wracking, but any financial award or settlement could offset some of your losses. Start today and learn what your legal options are.