Fraudulent Sales Practices in the Life Insurance and Annuity Industry
Many consumers have fallen prey to insurance companies and their agents selling life insurance as investments or retirement plans.
Life Settlements have grown in popularity in recent years and many clients are now discovering that these life insurance deals have significant problems. Many elderly clients with substantial net worth have been approached by an agent or broker and encouraged to obtain high-dollar life insurance policies and to finance premium payments through a premium finance company. The agent or broker promises that after the insurance is in place, it will be purchased by a third-party investor. Many clients are now learning that the policies cannot be sold and they are on the hook for the exorbitant costs of the premiums- paid for insurance they did not need or want in the first place.
Equity-indexed universal life policies are growing in popularity for a popular sales scheme in the life insurance market. Agents and brokers are selling these universal life policies as a “bucket” for ‘tax-free’ wealth accumulation. Clients are often misled by insurance agents who use policy illustrations to create an unrealistic expectation of investment performance. In later years, the client realizes that the policy has failed to accumulate earnings as illustrated and that substantial and unexpected premiums are required simply to keep the policy in-force — and the hope of having a college fund or retirement fund is completely gone.
Fraudulent Sales Practices in the Annuity Industry
Many senior citizens have been sold equity-indexed annuities as retirement fund investments. Often promised a “bonus” for moving their money to the equity-indexed annuity, the client later learns that they cannot access their money for many years without paying steep surrender charges, and that the ‘bonus’ is never readily available for withdrawal. Often times, clients are encouraged to replace an older annuity for a new equity-indexed annuity and only after the exchange is made does it become apparent that the older annuity provided greater returns and much more liquidity (access to their money without paying a surrender charge or penalty). Some senior citizens have been sold variable annuities as retirement investments. These investments are often not in the client’s best interests because they carry substantial risks, high costs and fees, and extended surrender charge / penalty phases that restrict access to retirement funds. Annuities can only be legally sold by licensed insurance agents or by stockbrokers who are also insurance agents. Whether you purchased an annuity from an insurance agent or from your broker, if the selling agent failed to deal fairly and honestly with you, you may have valuable legal rights that would permit you to cancel the purchase and, possibly, obtain an award of monetary damages.
Unfair and deceptive business practices are not uncommon in the insurance industry. Lawyers at our law firm represent consumers and small businesses in claims against insurance companies. If your insurance company has treated you unfairly, wrongfully denied your claims, improperly dropped your coverage or increased your premiums to force you to drop coverage, and you would like one of our attorneys to review your potential case, you may contact us to arrange a free consultation.
Common insurance fraud:
- Deceptive insurance sales practices
- Insurance claims denial
- Senior Citizen Investment Fraud
- Life Settlement Scams
- Annuity Fraud / Annuities Fraud
and many more ...