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Shapiro Administration Urges Older Adults to Watch for Scams When Purchasing an Annuity

Shapiro Administration Urges Older Adults to Watch for Scams When Purchasing an Annuity

by Pennsylvania Insurance Department

Photo courtesy of Vladimir Solomianyi on Unsplash

Keeping consumer protection a priority and in observance of Elder Abuse Awareness Month this June, the Shapiro Administration reminds older adults to be wary of unfair business practices that can occur when purchasing an annuity.

“An annuity should always be a purchase made in the best interest of the buyer – not the agent,” said Pennsylvania Insurance Commissioner Michael Humphreys. “Older adults are often pressured into purchasing annuities they don’t fully understand. When a consumer purchases an annuity that does not suit their needs, it can result in the loss of income and lack of access to their savings. During Elder Abuse Awareness Month, we’re urging older adults to educate themselves on annuities and remind them to remain vigilant against aggressive or predatory agents.”

An annuity is a contract between a consumer and an insurance company for the payment of money either at once or at some time in the future. These contracts are often used by people who are managing their retirement income.

Inappropriate sales practices can occur when shopping for an annuity. PID encourages older adults to do the following when shopping for an annuity that is in their best interest:   

Consumers should not:

PID addresses inappropriate annuity sales practices. Pennsylvania law, Act 99 of 2021, requires agents to put the needs of clients first and to act in the client’s best interest when recommending an annuity.

Since 2023, PID has helped Pennsylvanians recover over $2 million by assisting with free look period reviews and assuring proper payment of annuity proceeds. In one particularly egregious case, PID was able to get over $130,000 returned to an older Pennsylvanian who was sold an annuity that clearly wasn’t in the consumer’s best interest, and that was sold without the presence of the older Pennsylvanian’s preferred financial advocate.

“Financial exploitation has become the number one type of reported abuse against older adults in Pennsylvania. Because these cases take many forms and are often more complex, investigators are rarely able to get back all the money taken from the older adult, which is why education and prevention are so important,” said Pennsylvania Department of Aging Secretary Jason Kavulich. “Older Pennsylvanians have worked hard and have been active in their communities all their lives. They should live with the dignity and respect that we all deserve, and we all must do what we can to ensure that an older adult’s assets do not fall into the wrong hands.”

Anyone suspecting elder abuse should call the statewide reporting helpline at 1-800-490-8505, which operates 24 hours a day, seven days a week.

Consumers who wish to file a complaint against a producer or agent selling annuities may visit PID’s website or contact PID’s Consumer Services Bureau at 1-877-881-6388.

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