that's tremendously important to all Californians but especially vital to our most
seasoned Californians our seniors The California Department of Insurance
is the number one consumer protection agency in our state. Our highest priority is protecting
California consumers whether they need assistance finding the right insurance
or protecting them from scam artists. Our Department is here to help.
California seniors have contributed much throughout their lives to better our
communities it is therefore alarming that insurance scam artists are praying
on their good nature. The Department of Insurance is
aggressively pursuing agents and companies that illegally target seniors
and we're working to strengthen state laws to prohibit bad behavior and make
annuity products easier to understand.
But the best way to combat this problem
is to work together. Today I want to share some information
with you in case you are approached by a pushy or deceptive insurance agent. Not all agents engage in
high-pressure sales but some do. The tips and information in this video will make
a huge difference in preventing you from being a victim of a potential
scam.
Let's take a look. Deciding when any investment is right
for you as hard enough but annuities can be very complicated
because there's so many kinds of varying terms and different payment plans. At its simplest an annuity is an
investment in the form of an insurance policy issued by an insurance company. You pay money in the form of a premium
to the insurance company in exchange for a guaranteed minimum interest rate to increase the
initial investment.
Then either right away or after a period
of years. The insurance company pays you a monthly
amount either for a set number of years or for the rest of your life. Annuity
policies might sound pretty good but there are things about these
policies that could make them a very bad choice for you, the senior investor. For example, there are often hefty
charges if you want to withdraw some of your money early.
The surrender charges can also apply at
the time of your death and will reduce the amount that your
heirs will inherit. In addition, it often turns out that the
advertised interest-rate applies only in the first year that you put money into
the annuity. Even worse is that sometimes, if the
stock market does badly, you could actually lose money. These insurance policies are very
complicated so you need to be careful that you're
not taken advantage of.
Take a look at the scenes that follow. These are examples of how you can
protect yourself from high-pressure sales tactics. You don't want to end up with an annuity that is wrong for you. At your convenience.
In the comfort of
your own home, of course. With no obligation. We'll give you a call about when we can
set up a time to chat about your particular situation and see what's best for you. So what's wrong with this picture? There's free coffee.
You've learned something that will help
you pass your assets on your children and grandchildren. The fellow seems nice enough. So what's the harm giving him your
phone number? Well let's see another way to handle it. John uh...
I learned a lot today but instead of
me giving you my phone number I would like to get your card so I can find out more information. But if you don't sign the sheet and give
us your phone number I can't call you and you might miss out on something
important. But that's okay John uh... I'll think about it.
I'll talk
to my daughter and uh... I might give you a ring, but
thanks for the food. You're welcome. I know it feels uncomfortable to reveal
to people that you don't trust them.
Even more to the point, this discomfort is what certain
high-pressure sales people and some unscrupulous insurance
companies rely on. But it's ok not to trust everyone. Sometimes we confuse having something
in common with someone as a reason to trust them. We let them in.
And sometimes that's a mistake. See if you can recognize the mistakes
Mrs. Lewinsky is about to make. [Door bell] Why John.
Why John! I wasn't expecting you. I was just
the neighborhood visiting Mrs. Smith around the corner and I thought
I'd stop by and say hello. Did you see her at the living trust seminar? No, I don't believe I know Mrs.
Smith. Oh, she says she sees you walking your dog.
Well hello there fella... What's his name? Her name is Anastasia.
Oh, Anastasia, like the lost Russian princess. Are you Russian? Are you Anastasia? No wonder
you wanted some financial advice.
No I'm not Anastasia. But I do have a fondness for Russian
cookies. Can I offer you some?
Why thank you. Well Mrs.
Lewinsky Now that you're the fourth quarter, so to
speak it would be great to make a touchdown,
wouldn't it? And just pass the ball to your son? John what are you talking about? Oh, it's just a little football metaphor
I noticed the picture of your son and I was thinking that a living trust as part of the
financial plan with good investments would make a great gift for him ultimately. Well, I was thinking about getting my
affairs in order. That's why I went to the seminar. But I don't know what I need.
I don't want to be a burden to my son, he has enough on his plate. So, you're looking for a lifetime income that will keep you independent. Well I was only interested in the
living trust. Of course, we can take care of
that too.
Now I'm going to need some information about your current investments and I'll
take care of everything. So it's all set up now. And I'd be happy to drive you over to the
bank so that you can change your name on all the accounts into the name of the trust. But before we go I'd love some more
of those cookies.
Certainly John You know Mrs. Lewinsky you could be making a lot more money
than you are now with those bank CDs and your stock accounts, too. I know all about an annuity that pays
nine percent guaranteed. I don't know how much longer the
insurance company can afford to operate like that.
I told my own mother she should
jump at it. It's an insurance policy because you
pay in the money and it protects you from the ups and downs of
the market while guaranteeing a hefty return. You know I could save you the trouble of changing all your account names too. So if you'll just sign these papers I
can get started on getting your accounts closed out and into
an annuity right away.
That seemed like a pretty normal get-together
didn't it? Well, what happened? John was picking up on all kinds of
visual cues to make a connection with Mrs. Lewinsky. It's a very common way try to gain trust. Perhaps he was just being a good
salesman.
Or perhaps he was trying to trick her. The Department of Insurance has
investigated cases in which an agent tricked people into emptying their bank
accounts and selling their stocks to pay for an annuity contract. The agent received a substantial
commission and the victims lost money. Mrs.
Lewinsky would have made
more money if she had stayed with her original
investments How could Mrs. Lewinsky protect
yourself against this kind of smooth talker? [Door bell] Oh! John I wasn't expecting you today. Oh I was just in the neighborhood visiting
with Mrs. Smith around the corner and I thought I'd stop by and say hello.
Did you see her at the seminar? I don't believe I know Mrs. Smith. What can I do for you today, John? Uh, can I come in, uh, Mrs. Lewinsky and get you started on your living trust?
Oh, did I mention that you can shelter your assets in an annuity so that you can get on MediCal? We won't be doing that today John.
I need a chance to look over the information
that I picked up from you. I'll call you when my son can be here
while we talk. What does you son do, Mrs. Lewinsky? My son looks after my money and investments
and we won't be talking without him.
Thank you for stopping by, John. So long. Two heads really are better than one. Always have someone you trust with you
when you're discussing your money or investments Even if the sales person is not a
stranger to you investments and insurance are very complicated.
According to California law, a sales person must give you written
notice that they want to meet with you at your home at least twenty four hours in advance. But if you do find yourself with the
sales person in your house don't be fooled into thinking that he's
going to look after your financial interests just because you have something in
common like an interest in football or cookies. It might be tempting for Mrs. Lewinsky
to just sign something to get rid of John.
Never sign anything on the spot with someone standing over your shoulder. Never sign forms that would give the
agent permission to transfer your money and never, ever sign blank forms. If it's a good deal today it'll also be a good deal tomorrow. The best course of action is to not let anyone into your home but if you find yourself in the living
room with John...
John, it's been very nice chatting with
you today but I'm not feeling very well okay ill disfigurement for me to go
through your files to make sure that we Okay it'll just take a minute for me to go
through your files to make sure that we haven't missed anything that should be
liquidated to fund the Pro-Am guaranteed nine percent annuity that way I can drive into the bank later and take care of everything and get it out of the way. I don't want to be impolite, but i'd like you you to leave now. Why don't you just sign these
authorizations and I'll make the transfers for you Mrs. Lewinsky that
way you can make sure that you don't miss locking up this stellar
interest rate.
John, I need more time to look over
this information. So I won't be signing anything today. But I'll call you when I've looked it over..
Why don't I just show you to the door. But there's a thirty day free look
period anyway that means you can cancel at any time and get all your money back so you might as well sign then I don't
have to bother you again you can just cancel if you decide
against the annuity you can just put all your money back and put it into the
mutual funds with no consequences Isn't there a tax problem to selling
mutual funds? Well, I won't be signing anything today.
Goodbye, John. Mrs. Lewinsky, you don't have to be
so rude! Annuities are very complicated investments that may not be right for you because they can't lock your money up
for a long time. You need to make sure you keep enough money
outside of the annuity to take care of unforeseen expenses You also need to know what interest rate
the annuity will pay past the first year You'll also need to look at how much risk you
want to take on and decide between an annuity with a fixed interest rate or one that will vary.
Look closely at the terms of the annuity read the documents ask questions to make sure you
understand them and take notes. Don't be a victim! Always know and understand anything you
sign If an offer seems too good to be true it
probably is too good to be true the salesperson insists that you sign
right away That's a danger sign. If it's a reputable deal it will still
be available next week. If you don't understand something ask questions there are no stupid
questions.
Never allow someone to try to sell you
insurance or an investment without giving you the time to think
about it and without a trusted friend or relative
by your side. You always have the power to say no! After all it's your money. There's no shame in becoming confused
about financial planning and if you do it's okay to end the talk
at any time. Honest sales people understand and will not pressure you further.
Honest salespeople will not insist that they talk to you alone. The law is on your side. And we are on your side. To help you at any time call the California Department of
Insurance Hotline at 1-800-927-HELP.
Today there are more insurance options
for seniors than ever before. With so many choices picking the right one can
seem like a daunting task the California Department of Insurance
is here to help you make those important decisions we want to make sure you feel
equipped to make informed assessments of your insurance needs and
options. If you have any questions about an
insurance product, agent or broker, don't hesitate to call the Department of
Insurance at 1-800-927-HELP. Thanks for joining us today and we look
forward to hearing from you.
[Music].
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