Tell a Fib, Go to Jail
California Department of Insurance Video: Annuities - It's Your Choice
Yolo County District Attorney Jeff W. Reisig believes that every effort should be made to identify, investigate, and prosecute those persons who commit Insurance Fraud.
What Is Life Insurance?
It is a form of insurance that pays a beneficiary in the event of the death of the insured person. When a policy is purchased, a specific death benefit is chosen.
Life insurance is a contract between the policy owner and the insurance company:
- the policy owner (or policy payer) agrees to pay a defined amount called a premium.
- the insurance company agrees to pay a sum of money upon the death of the insured person.
- the beneficiary – the person or persons named by the policy owner – will receive policy proceeds (benefit) upon the death of the insured person.
What Is a Variable Annuity?
A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.
For more information about annuities, go to the Securities & Exchange Commission web site at: http://www.sec.gov/investor/pubs/varannty.htm
Be cautious about these “free lunch seminars” Senior estate-planning seminars aren't new. But they're drawing more regulatory scrutiny because they're increasing in areas with large elderly populations. Typically, the people who attend them need advice about leaving assets to their children, managing income or minimizing taxes in retirement.
Many annuities are complex insurance products whose returns vary with market performance.
Questions to ask:
- Did the speaker talk about any of the following annuities? Yes No
- Variable annuities? Yes No
- Deferred annuities? Yes No
- Equity-indexed annuities? Yes No
- Immediate annuities? Yes No
- Did the speaker discuss the risks associated with these products? Yes No
- Did the speaker disclose the surrender charges and tax penalties if the annuities were cancelled early? Yes No
- Were you encouraged to purchase an annuity? Yes No
“No person may solicit a sale or order for the sale an annuity at the residence of a senior, in person or by telephone, by using any plan, scheme, or ruse that misrepresents the true status or mission of the contact.” ~ California Department of Insurance: What Seniors Need to Know About Annuities
Know What You Are Buying
If you are having trouble understanding all aspects of a proposed investment, seek advise from a trusted tax consultant or lawyer, or you can call the California Department of Insurance help line at 800-927-HELP begin_of_the_skype_highlighting FREE 800-927-HELP end_of_the_skype_highlighting (4357) If the salesman objects to you’re getting a consultation then you should walk away. If you suspect you were lied to, call the Department of Insurance, or the District Attorney’s Office at 666-8180.
Remember: Variable annuities are designed to be long-term investments, to meet retirement and other long-range goals. Variable annuities are not suitable for meeting short-term goals because substantial taxes and insurance company charges may apply if you withdraw your money early. Variable annuities also involve investment risks, just as mutual funds do.
It is important not to confuse investment scams with bad investments. A bad investment is nothing more than a poor choice. An investment scam is a criminal act that was intentionally designed to deceive and manipulate you, the investor, through the use of false claims, lies and /or high pressure sales tactics.
Who should you call? When referring a concern to the District Attorney’s Office, you can call:
Investigator Chris Forsyth at 530/ 666-8205
Lt. Dan Stroski at 530/ 666-8380
Citizens may remain anonymous, but keep in mind, the investigation process is more expeditious when we can verify the reliability of the person making the complaint and how it is they know what they know.
301 Second Street | Woodland, CA 95695 | 530/ 666-8380 Phone | 530/ 666-8423 Fax