NAFA Member Notification
Milwaukee, WI April 13th, 2008–Dateline NBC’s April 13th report by Chris Hansen made many allegations about sales practices and specific product features regarding indexed intended to dissuade individuals from considering buying indexed annuities. NAFA has been aware of Dateline’s preparation of its April 13th report by Chris Hansen and has sent numerous statements to Dateline providing additional information on the benefits of fixed annuities and warning that an unbalanced story would scare consumers away from considering a fixed annuity as a sound, sensible and prudent part of their retirement plan.
NAFA strongly opposes fraudulent, deceptive and unscrupulous sales tactics used to sell individuals of any age fixed annuities and particularly older Americans who may be more vulnerable. NAFA carrier members represent over 90% of all indexed annuity sales. NAFA and all its members support our Attorney Generals, insurance commissioners and all regulators in defending consumers’ rights and any legal actions they deem necessary to uncover them and prosecute when warranted. NAFA also strongly objects to tactics that misguides consumers and provides incomplete information that leave them with a negative view of all indexed annuities or all sales people.
NAFA has been and continues to be consistent and absolute in its belief that, just like any other financial product,the indexed annuity is not for all individuals nor is it for all of any individual’s savings. Dateline agreed and stated often that “indexed annuities can and do provide protection and guarantees and, like any product, they're not for everyone.”
Dateline was also in agreement with NAFA's opposition to deceptive and misguided sales presentations or disingenuous credentials. NAFA believes that every member can stand in front of a prospect, group or camera and present why and how fixed annuities can be appropriate for individuals concerned with safety of principal and guaranteed income. The association is working aggressively with others in the industry to ensure a safe and informed environment for consumers.
If there is evidence that some sales people have used unacceptable methods and have taken advantage of older consumers to make sales, then NAFA supports any and all legal actions to uncover them and prosecute when warranted.
The show consistently discussed the long surrender periods but failed to explain that these products are designed for individuals who want to defer their access to the money in exchange for protection from market risk. There are a multitude of indexed annuities available that give individuals the ability to defer that decision for little as 3 years or as long as 18. NAFA advises that all annuity sales should match surrender charge periods with the unique financial needs of the individual, to fully disclose those charges during the sales process, and to fully comply with the insurance company and state suitability and disclosure requirements.
NAFAconcurs with the show’s concern with improper use of designations and supports insurance carriers and insurance divisions which have issued regulation and rules banning the use of education or designations to mislead a customer about their ability or to hold themselves out as an expert when they are not. Disappointingly, Dateline did not inform its viewers of the benefits that motivate agents to sell and individuals to buy and hold indexed annuities:
1. No risk to premium and prior earned interest from stock-market losses.
2. Guaranteed return of principal and all earned interest when held to term.
3. Guaranteed minimum interest credited when higher than index interest credited.
4. Guaranteed income you cannot outlive.
5. Improved compounded accumulation by deferring income taxes.
6.Term choices from 3 years to 18 years to match the individual’s unique financial plan.
7. Ability to remove asset from probate to expedite transfer of savings to loved ones or charity.
8. Interest earnings that are not considered income for Social Security benefit determination.
NAFA applauds the hundreds of thousands of agents who do practice a high degree of professionalism so that millions of seniors today reap the security and protection of fixed annuities. NAFA encourages individuals to visitwww.fixedannuityinfo.com to learn more about fixed annuity benefits and limitations as well as information on what information to ask an insurance agent or company and how to check out that information.