| The Elderly Victims of Variable Annuity Sales Fraud |
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| Written by Kurt Reichenbach |
| Wednesday, 20 April 2011 11:57 |
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It is often the case that many insurance companies come under scrutiny for the methods used to market their products. There is good reason for this. While many practices engaged in by the insurance companies are at best questionable, fraud involved with the sales of variable annuities has recently come to the foreground.
It is often the case that many insurance companies come under scrutiny for the methods used to market their products. There is good reason for this. While many practices engaged in by the insurance companies are at best questionable, fraud involved with the sales of variable annuities has recently come to the foreground. Many of these companies have deliberately fostered a culture in which the agents are encouraged to push the sales of products strictly for the sake of commission. In particular, sales of variable annuities have been pushed on to people for whom they are really not suitable. With variable annuities, you surrender a large sum of cash to the insurance company, in return for a specific income. However, with a variable annuity, you don't start receiving that income for several years, usually ranging from 5 to 20, with 7 years being the average. These products aren't sold by insurance agents because they are good products. They are heavily promoted because the insurance agent earns a huge commission on their sale - and thus is acting in his or her own interests, and not in the interests of the client. Thus, an inherent conflict on interest exists for the insurance agent - he or she stands to make a great deal of money on pushing variable annuities products onto people who don't need them. The longer the variable, i.e., the number of years that elapse before the customer begins seeing an income from the annuity - the higher the commission for the sales agent. For a twenty year annuity, the agent would earn a 20% commission. This is a major reason that variable annuity fraud litigation has sprung up all over the nation. Major insurance firms and their agents have especially targeted seniors for these products. A person who can expect to live another 10 to 15 years is often sold an annuity from which he or she won't see an income from until they have passed on. This constitutes both fraud and theft, and is a blight upon our nations elderly. Hence, the practice has accurately come to be known as variable annuity sales fraud. Several legal actions have been initiated against the insurance companies that have engaged in this criminal behavior. Across the nation, lawsuits are being filed on behalf of the elderly victims of this pernicious fraud. The hope is both that monies will be recovered for the victims or their families, and that this evil practice will finally be put to an end by hitting insurance companies where it hurts them the most - the bottom line. In the legislature, reform proposals are being considered which will once and for all pass laws against this unfortunate practice. Laws are being considered which will protect our nation's seniors and the elderly from the shark like behavior of insurance agents and companies that promote this unethical practice. With the growing public awareness of these foul deeds, it is finally beginning to look like appropriate regulation will be put into place to ensure that variable annuity sales fraud will become a scam whose time has passed. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. To learn more about Variable annuity fraud lawyers and elder annuity fraud, visit http://www.elderbankfraud.com/elder-financial-abuse.html today. |