Many people move from colder climates to sunny Florida to enjoy their golden years of retirement. Where else on the East Coast can you have a Christmas celebration by the pool? However, unethical insurance agents and financial advisors take advantage of the large population of elderly people in this state to target for scams. One common scam involves annuities, due to the rising popularity of annuities to supplement pension plans or other estate arrangements.
Recently, an insurance agent convinced senior citizens in Florida to purchase annuities with return rates far too good to be true. The agent collected over $99,000 over four years through fake companies named MBA Capital Group and Trust Preferred Capital Network.
Help your elderly loved ones avoid losing their hard-earned nest egg with these warning signs of an annuities scam:
- Watch out for annuity expiration dates. Scammers use pressure techniques that tell seniors to act now before an annuity expires. Most legitimate annuities do not expire before the person reaches 115 years old. Any deal that is only good for that day most likely is not real.
- Research the license status of any agent selling annuities. Some scammers do have the appropriate license to sell annuities. However, many scammers use titles like “trust adviser” or “senior adult consultant” to avoid scrutiny.
- Do not make payments directly to an agent. A legitimate annuity will require payments to an insurance agency – never to an individual agent. Help your elderly loved one research the insurance company to avoid sending money to a shell or front company. Avoid paying anything directly to a single person.
- Only trade in annuities after consulting with a trusted financial adviser. Trading in an annuity can be a good idea depending on the premiums and payout of the new policy. Yet, many trade-in deals push a large commission for the agent rather than offering any real benefit to you.
Estate planning involves many complex decisions. Do not let a scam disrupt your loved ones’ finances at this vulnerable time.