An annuity scam is when an unethical insurance agent uses fraudulent tactics to sell compromised financial tools to profit illegally from unsuspecting clients, according to Annuity.org. The targets of such scams are commonly seniors in deteriorating physical and mental health.Continue Reading
Some agents sometimes target older seniors who are suffering from terminal illnesses and convince them to invest in annuities in which the funds are locked in for over a decade, reports Annuity.org. They set up the contract so that if the policyholder dies, whatever money is left goes to the agents or insurance companies. In other scams, agents set up deals to convince seniors who are not as mentally agile as younger clients that their funds are not well-invested and won't last them through retirement, eventually getting the victims to cede over control of their finances.
Seniors are not the only victims of annuity scams, says Annuity.org. Fast-talking agents use tools such as signing bonuses and limited-time offers to lure clients into buying unsuitable annuities that are of no benefit to them. They can also create convoluted contracts that are difficult to understand and are written with some benefit for the agent an insurance company but little advantages for the client. Such contracts also often fail to disclose withdrawal and maintenance fees clearly.Learn more about Insurance