Only buy an annuity from a licensed agent or broker: All agents and brokers are licensed through our office. It’s easy to misunderstand or be misled about the benefits and risks of annuities. Follow these tips to protect yourself:
Avoid high-pressure sales: If an agent or broker pressures you to buy an annuity today, don’t give in. Tell them you need more time to make a decision and/or speak to someone you trust about whether this is the right choice for you. The Bureau of Insurance cannot give you advice, but we can help you with identifying what questions to ask and provide you with unbiased information. Contact the Bureau.
Watch out for quick-switch strategies: If an agent who sold you an annuity last year now recommends you replace it with another one, find out why. Make them answer your questions so you clearly understand. There may be fees and other penalties when you surrender your old policy for a new one. If you are told that the new policy offers a benefit that makes up for your losses, make sure you understand exactly how that new policy bonus works: you may be losing more than you are gaining. If you decide to replace your annuity, the agent must give you a replacement notice that tells you the pros and cons of replacing your policy. Remember that the sale of an insurance policy pays a commission, so you want to make sure that your professional’s advice is in your best interest.
Beware of the "free" lunch or dinner seminars: These types of seminars are often run by people who are good at high-pressure sales. They may try to get you to make a one-on-one appointment with them, at which they'll try to sell you something. Free lunch seminars may seem like a win-win situation: you get a free meal with no obligation to purchase. Like most things in life, nothing is free. When you sign up, you are generally providing your personal information to a salesperson who will likely contact you in the future. These seminars also rely on the reciprocity principle: do something for someone and they will do something for you. It is much more difficult to say no to someone who has bought you a free meal, so keep that in mind if you decide to attend a seminar.
If you suspect deceptive sales practices, or you have a specific question and can’t get the answers you need from an agent or the insurer, please contact us.