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Cancellation of Insurance Annuity

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VirgieLT

Junior Member
What is the name of your state?: Virginia

My mother is 75 years old and got an annuity with Insurance company, I suggested she cancel it, and they are charging her 15% of the money invested. I was not aware of the 10 day automatic cancellation, otherwise it would be 5-years without being charged a surrender fee. I want to know if this is accurate and what can be done about this, she need her money to live on.
 


Dandy Don

Senior Member
Why did you suggest she cancel it? Your advice to do so may have been unwise if it was not justified. And yes, the cancellation fee is legal and allowable.

How much did she put into the annuity and how much would it be paying out?

An annuity is a good way for her to get an monthly/annual income from invested monies IF she doesn't need that total amount of bulk money to live on right away, so why did she get the annuity in the first place?
 

VirgieLT

Junior Member
My mother is 75 years old and this annuity was initiated in December 2004.
This policy matures at age 99, and I know she needs the money now to help with her everyday life.

She cashed in some insurance policies and was encouraged by the insurance representatives to put it in an annuity, amount $4,000; they are charging $600 to cancel. The point is this is the only money she has to live on except for her retirement monthly check.
 
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Dandy Don

Senior Member
She should have not turned the money over if she didn't want the annuity, but this also sounds like high pressure tactics by the insurance salesmen just to make a sale. Too bad that this had to happen but at least she is getting some money back.
 

anteater

Senior Member
15% is an outrageous surrender fee.

Seniors being roped into ludicrous annuity contracts is a hot issue right now.

Try doing a Google search on the insurance company name and something like "annuity abuse" or "annuity suitability."

Involving a lawyer is likely not worth it for this amount of money. However, I suggest that you summon up your best outrage and write a letter to the agent and the insurance company threatening all sorts of mayhem. Copy your state's Insurance Commissioner. Ask that all premiums be returned.
 

anteater

Senior Member
Good luck.

By the way, that 15% surrender fee is probably a pretty accurate indicator of the commission that the insurance agent earned.
 

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