Filed Under:Annuities, Fixed Indexed

Regulators warn on unsuitable annuity sales to senior vets

The World War II Memorial in Washington, D.C. AP Photo/Lawrence Jackson
The World War II Memorial in Washington, D.C. AP Photo/Lawrence Jackson

The National Association of Insurance Commissioners (NAIC) recently issued a consumer alert on the unsuitable sale of deferred annuities to military veterans applying for VA benefits. The NAIC based its warning on a May report from the GAO that researched unsavory practices associated with helping veterans obtain payments from the Department of Veteran’s Affairs pension program.

Eligible vets must be age 65 or older and have a disability unrelated to their military service. Surviving spouses and dependent children also qualify. Applicants are required to meet certain income and asset criteria before they can receive the pension.

The GAO report found that some organizations, financial planners and insurance agents are promoting products that may not be suitable for a veteran in an effort to quality the individual for the VA pension. While the VA accredits financial planners and lawyers to aid veterans in the application process, it does not endorse any particular product to help pay for long-term care.

Specifically, some firms are trying to sell deferred annuities to aged veterans. In one instance, an organization presented a financial plan to 86-year-old veteran that included the purchase of both an immediate and deferred annuity “that would generate payments only after the veteran’s life expectancy,” the GAO stated.

Deferred annuities, the GAO and NAIC pointed out, may not be appropriate for elderly veterans since the product could tie up funds needed for future expenses. Moreover, funds may not be available to the veteran during his or her lifetime or may not be accessed without incurring high withdrawal fees. “An annuity is not an investment product to help reach a short-term financial goal,” the NAIC Consumer Alert wrote.

See also:

Featured Video

Most Recent Videos

Behind the scenes with Vicki Gunvalson [VIDEO]


In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI


Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's


An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Protesters Disrupt WellPoint Annual Meeting


Hecklers call for more disclosures of information about political contributions.

Related resources

More Resources


Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.