"These agents convinced consumers to replace annuities they had previously purchased with new ones, resulting in sometimes large surrender charges
on the original annuities, and the money being tied up for several more years."
Your annuity contract should have its surrender charges
explained in the contract itself.
This loss of value may be in addition to the potentially significant surrender charges
and penalties applied.
Check out Fiduciary Rule Is Squashing Annuity Surrender Charges
Due to these negative consequences, insurers typically include surrender charges
in their VA products to discourage lapsation (Milevsky and Salisbury, 2001).
These products are designed to solve clients' retirement income needs and provide them with a known source of income through a competitive cost option with a wide selection of investment choices and no surrender charges
. Advisers are provided with more fee-based choices and the variable annuities offer the same guaranteed lifetime income riders that are available through the company's core commission-based solutions, Lincoln ChoicePlus Assurance, American Legacy and Lincoln Investor Advantage.
Designed to help advisors solve for their clients' retirement income needs, these products provide savers with a known source of income through a competitive cost option with a broad selection of investment choices, and no surrender charges
Consumers may not understand how the insurers set the crediting rates, or how surrendering contracts early could force them to pay big surrender charges
, officials say.
Twisting is a fraudulent practice that allows agents to generate a new commission by convincing clients to exchange old annuity contracts for new ones without notifying them of surrender charges
. The investigation found that one of Hibbing's clients lost nearly $14,000 for surrendering a policy while he earned a commission of more than $17,000 on the new contract.
From there, clients should be separated into three areas: clients you want to move to fee based, set-aside clients (those folks who have a variable annuity with surrender charges
you don't want to move) and clients that may be better served somewhere else.
, too, are down from as high as 80-90% of fund value in some cases to as low as Rs 6,000-2,000 depending on the year of surrender.
"However, Martin failed to adequately explain the complexity of EIAs or that EIAs are typically long-term investments carrying surrender charges
and withdrawal fees."