This article highlights difficulties that some senior citizens have had with annuities.
Arizona seniors lost millions in annuity fees, lawsuits say
Lawsuits highlight risks for elderly of investment choices
by Robert Anglen – Nov. 7, 2011 12:00 AM-The Arizona Republic
Hundreds of Arizona senior citizens cashed in their retirement investments and paid millions of dollars in unnecessary fees, according to lawsuits accusing a Scottsdale-based estate-planning company of taking advantage of vulnerable clients.
Federal and state court lawsuits claim officials with National Future Benefits Unlimited generated large commissions by scaring and misleading elderly clients into bailing out of existing annuities and buying new ones. The moves left the clients paying steep surrender fees to insurance companies and facing potential tax liabilities, according to the lawsuits.
Annuities, sold by insurance companies and meant to serve as long-term investments, are growing ever more popular as companies attempt to tap the burgeoning population of retirees with offers of lucrative interest rates and guaranteed incomes for life.
In one of the lawsuits, an insurance company is accusing National Future Benefits of systematically targeting clients to cash out their annuities; in the other, an elderly Phoenix couple contend they were defrauded out of most of their assets.
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