If you're considering purchasing or transferring annuities, be aware of the risks. A new class action lawsuit was launched against Allianz Life Insurance Company of North America (NYSE: AZ). The complaint alleges that the company enticed people to purchase its annuities using false advertising. The buyers of the annuities say they never received a bonus Allianz promised them.
In some cases, Allianz told clients that they would get a 10 percent bonus if they transferred their current annuity over to Allianz. Most annuities charge heavy fees for withdrawing early, so people who switched from one plan to another were relying on the bonus just to cover the cost of switching. The annuities involved include Master Dex 10 Annuity, 10% Bonus PowerDex Elite Annuity, and the Bonus Dex Elite Annuity.
Annuities Q&A
What's an annuity? It's a special kind of investment offered by life insurance companies that promises to pay out a regular amount of money after you pay in for a certain amount of time.
Who else is offering "bonuses annuities"? Pioneer Investments, American Skandia, Ing, Ohio National, Extra-GE, Manulife Financial, AXA Equitable, Pacific Life, The Hartford.
Are there charges for annuities? Yes - sometimes a lot of them. Make sure you have all costs explained to you, and don't pay for things you don't need.
How do I know who to trust? The California Department of Insurance tells consumers considering an annuity - or any kind of insurance - to check the company's ratings: "Five major insurance rating companies grade insurers on their financial health and ability to pay claims. These companies are:
A. M. Best
Standard and Poor's
Moody's Investor Service
Duff & Phelps, and
Weiss Research"
What if I think my insurance company is over-charging me? The fine print can be tricky sometimes. If there's a chance you've been cheated, it may be time to seek legal advice.
Shady financial deals are nothing new to consumers, but annuity fraud seems to be on the rise again. Be sure to learn as much as you can about a company if you're giving them your money. And if you think you've been duped, get legal advice.
If you feel you qualify for damages or remedies that might be awarded in a possible annuities fraud class action or lawsuit, please [file your annutities fraud ] complaint.