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Variable Annuities

What is a Variable Annuity?

A variable annuity is an annuity whose rate of return will vary with the performance of underlying investments. These investments are sub-accounts which are typically invested in mutual funds.

Why are Variable Annuities not Considered a Good Investment?

Many analysts believe variable annuities are not good investments because after the fees and commissions are subtracted from the amount invested in the variable annuity it becomes clear that purchasing the same mutual funds outside of the annuity provider would provide a far greater return on your investment.

But doesn’t the Variable Annuity Provide a Death Benefit to the Beneficiary?

The death benefit provided by a variable annuity is not a fixed death benefit under a conventional life insurance policy. It disappears if the annuity owner elects to annuitize the policy. If the policy is not annuitized, the death benefit is really just expensive insurance on the performance of the portfolio.

How Much are the Fees and Commissions on Variable Annuities?

The effects of financial abuse can be extremely negative for a senior. In addition to financial losses, victims may also experience:

  • A loss of trust and an increased skepticism of everyone, even trustworthy friends and family members
  • Feelings of depression, fear, shame, anger and other negative emotions
  • Depleted physical health due to stress or the inability to afford proper care or nutrition
  • Alcoholism or other risky and destructive behavior
  • Loss of a residence, car or utilities due to inability to make payments
  • Dependency on government assistance

Variable annuities are one one of the best ways to begin saving for retirement. These financial products make it easy to start saving early. And when you work with a good broker, they can deliver higher returns than other retirement savings strategies.

The only problem is that variable annuities are directly tied to the performance of markets. And when you work with a broker who trades recklessly or manipulates your investment, you can lose huge sums. That puts investors in a very scary and uncertain position because retirement savings are so essential. Luckily, it’s possible to recover from fraud involving variable annuities if you have the right legal assistance.

Have You Been the Victim of Variable Annuities Fraud?

Variable annuities are complicated financial products, making it difficult for investors to determine if they have been deceived or defrauded. Adding to this problem is the fact that variable annuities are one of the most profitable financial products for the brokers who sell them. That creates a powerful incentive to behave irresponsibly.

The most common type of variable annuities fraud involves recommending annuities that are unsuitable for the investor. There are strict regulations detailing suitability, but some brokers are willing to bend or ignore these rules outright. The simple fact is that variable annuities are only a smart investment for a limited number of investors. Brokers are far too eager to push these annuities on people who should invest their money elsewhere.

Another common type of fraud is known as churning. This happens when a broker advises an investor to switch to a different variable annuity after a short period of time. If proper procedures are not followed, the investor receives a huge tax penalty while the broker makes a huge commission. If variable annuities did not produce the returns that you were promised, you may be the victim of fraud.

Where can You Turn for Help?

Proving that you have been the victim of fraud can be a complicated and contentious process. That is why it’s essential to work with a law firm that has specialized expertise in variable annuities. They can spot any and all instance of fraud, calculate what kind of damages you are entitled to, and make sure the irresponsible brokers are brought to justice. Not every securities attorney has the experience with variable annuities that you need, so be sure to vet your options carefully.

Schedule a free consultation with Howard M. Rosenfield, an attorney with over three decades of experience fighting back against variable annuities fraud. Call (860) 677-4334.

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Howard Rosenfield is truly a life saver. After months of working with my financial advisor, I found out he was making risky investments without my knowledge. When I discovered how much money I lost, I thought there was nothing I could do. Howard explained all the difficult terms and what exactly my financial advisor did wrong. If it wasn't for Howard, I would never have recovered my losses and would be under extreme financial distress to this day. J.
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