The Palm Beach Post.com has an article which describes a recent trend in Annuities in which scammers sell and churn an insurance policy sold as an annuity in which there are very high surrender fees and limited access to the money for 10 or more years. These policies are being sold to 85 year old individuals as investments when they cannot touch the money for more than 10 years and have very high surrender fees if they do.
Most reputable annuity policies, they say, allow access to the money after just 90 days and require no more than a 5 percent surrender fee, and nothing after five years.
Senate Bill 2520 and House Bill 141 seek to protect Floridians who are 65 and over from annuity scam artists by easing access to the assets and decreasing excessive withdrawal payments. The legislation says that “senior consumers diagnosed as having a terminal illness that will result in death within two years after the diagnosis” could “withdraw all purchase payments from an annuity contract prior to the expiration of the surrender charge period without penalty.”
Recently we have begun seeing a trend in these types of annuities being marketed towards lawyers, doctors and other professionals as “safe investments” Given the high commission paid and the tendency of the agents to churn the assets into other annuities, it would be nice if this bill would do something to protect others from these life insurance investments.