Please advise/suggest ASAP...

[kamll2]

What is the name of your state (only U.S. law)? SC

I need to know quickly, please. Is my only option to accept his mistake at the cost of $20K+ or is there any other option available? Please read on for details...

(I'm sorry my long story short is not so short, but I could really use some help here )​

Here is the long story short:

My father passed in August 2008. In Sept I found an annuity statement with a stated dollar amount as "Death Benefit." I was still wet behind the ears with all the life insurance and notifications that needed to be done. Most all the life insurances contacted us (my mom or me). Nobody from the annuity investment had contacted us so when I came across the statement and saw the words "Death Benefit" I figured it was something we were supposed to notify them of the death of my father and the proceeds would be forthcoming.

When I called the account rep that my father worked with I asked "Is there paperwork we need to take care of so that this annuity investment death benefit can be processed? Is this like life insurance?" His answer was "No, no, you don't want to take that out. It's an annuity." He also told me at that time that the benefit would be the value as of the date of my father's death. So... my father trusted him, so would I.

When the market fell through the floor, I again called this guy just to confirm that the value of the annuity was safe at the value stated close or near to the statement value (since it was close to the date my father passed), and he assured me that the death benefit was locked in by the date of death.

Well, you probably already know where this is going. Based on the advice and info I was given, I did not feel any pressure to do anything with the annuity at the time. I had a probate deadline to meet for the inventory thing. The week this probate inventory was due the account rep called to ask about the settlement papers he had given me several weeks earlier, however, still after his advice and the market downturn. He said that the home office had contacted him inquiring about them. I advised him that his paperwork was first on my list as soon as I turned in the probate inventory and made some comment about the value being locked.

This was the first I'd heard any different: he said that "no, it's not locked in until the settlement papers are received." So I walked him through our history of how he had told me twice that the value was safe. He said that had been his understanding until this case.

Ok, now I'll make the long story short... bottom line we lost $20K+ as a result of decisions made based his knowledge and advice on his product in his business. This is a reputable company and the advisor has been in the business and with this company for many years. My first thought was that they changed policy after the bubble burst, but he says no, it was just something that he has misinterpreted for years and fortunately it has not effected any of his clients adversely... until now.

Do I have any recourse?

Thanks in advance,
kamll2

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Last edited by kamll2 under "Do I have a case" Close but different...; Today at 11:40 PM. Reason: No replies

 

[anteater]

You don't get an answer any quicker by closing one thread and creating another.

1) You posted on a weekend and there are just not as many people viewing the website on a weekend.

2) This is not a high traffic forum in the first place and posts here are easy to overlook.

Having said that...

I doubt that you would be successful in a court of law. Annuity provisions are contained in a contract. (And there are an almost bewildering array of annuity flavors and options. But locking in the death benefit on the date of death would be a very unusual option.) And my opinion is that the contract terms would prevail rather than information communicated by an "account rep." If you can't find the contract, I would request a copy from the company to confirm the terms.

Nevertheless, you could go over the account rep's head and plead your case. Is the account rep a life insurance agent, a broker, an investment advisor...?

(This should be a warning to those considering purchasing an annuity, particularly a variable or equity-indexed annuity. The people selling these often have only the shakiest grasp of the terms of the contract.)

 

[kamll2]

The advisor has the initials "CRPC" after his name and the title "Financial Advisor" under his name.

Thank you for your input. Your comment "But locking in the death benefit on the date of death would be a very unusual option" makes me feel much better about the whole thing. I am going to look for the contract anyway though. I'm sure my father has it somewhere, I'm just not sure I'll be able to find it. But still, if the idea of the death benefit being controlled by date of death is a "very unusal option" then I feel comfortable that the advisor did infact make the mistake he said he did and that it's probably not any different in the contract.

Thanks much for your input,
kamll2

 

[Dandy Don]

Sorry that you have no recourse--the company can not be held responsible for fluctuations in the shaky stock market. It is possible that the value may increase again in the future.

Main advantage of an annuity is that the survivors can continue to collect quarterly dividend payment checks for years. How much is the "death benefit" amount worth? I'm puzzled as to why the adviser did not inform you that you could cash out/close out the annuity if you wanted to (but most people choose not to do this because they prefer to receive the future payments).

 

[kamll2]

Thanks Dandy Don for your post.

My inquiry was not about holding the company "responsible for fluctuations in the shaky stock market." My question was about holding the company responsible for the erroneous advise I was given by the agent that "the death benefit was locked in at the value on the date of death", which turned out not to be correct. If I had been told differently, then I absolutely would have done something when I called him the second time: "When the market fell through the floor, I again called this guy just to confirm that the value of the annuity was safe at the value stated close or near to the statement value (since it was close to the date my father passed), and he assured me that the death benefit was locked in by the date of death."

I don't know why he didn't advise me that the annuity could start to be drawn. All I know is what he said when I called: "When I called the account rep that my father worked with I asked "Is there paperwork we need to take care of so that this annuity investment death benefit can be processed? Is this like life insurance?" His answer was "No, no, you don't want to take that out. It's an annuity." He also told me at that time that the benefit would be the value as of the date of my father's death. So... my father trusted him, so would I."

Thanks,
Kamll2

 

[Dandy Don]

What he told you may have been his preference, but he has no right to make decisions about YOUR assets. What you need to do is get more information, such as a booklet or the rules and regulations about the particular annuity that you have (the same information that would have been given to the person who purchased the annuity) and get that information mailed to you from someone else at the same company so you can determine whether you want to cash it in or not and perhaps you can even talk to someone else at the company about the death benefit. What is the death benefit worth--a stated exact amount or whatever its value is on a certain date?