Immediate Annuities? FINRA Cautions Seniors on Immediate Annuity Fraud.
Although immediate annuities are oftentimes sold as a simple,
straightforward, guaranteed investment, they can be packaged with many different forms and
features. For example, Immediate annuities such as variable annuities are hybrid products, given
their dual characteristics of being both insurance products and securities products.
Immediate annuities and immediate annuity products packaged in a variable
annuity format typically include sub-account holdings with investments in the stock market, thereby
constituting securities products. Most importantly, their value can decline with a drop in the
stock market, with possibly devastating consequences.
Seniors and retirees are often sold immediate annuities, to provide income
payments immediately after purchase. This is in contrast to deferred annuities, which generally
are structured to provide for payments and/or withdrawals to be made at a later date.
A number of large insurance companies, such as AXA Equitable, Nationwide,
Thrivent, ING Financial, American Family, Prudential, and Jackson Life, market immediate annuity
products as a way to turn retirement assets into regular periodic or monthly payments, either for the
rest of the investor’s life, or for a specified period of time. Such retirement account assets may
include distributions from defined contribution plans, 401(k)’s or IRA accounts to fund an immediate
If you feel you have been victimized by an improper sale or transaction
involving an immediate annuity or immediate variable annuity, we offer a free initial consultation to
assess the merits of your claim.
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