Annuities Have Always Had Complete and Full Disclosure

In an online Washington Post article by Michelle Singletary, on February 2, 2006, entitled, Annuities Should Gain Transparency, she is attempting to discuss the recommendations of the NAIC to extend the requirement for Senior Protection in Annuity Transactions model regulation to purchasers of all ages. But as most journalist who attempt to write on this topic, Michelle has fallen prey to the practice of including insinuations that are not based in truth or fact. In her article, Michelle authoritatively asserts that “many seniors didn’t understand or weren’t adequately informed of the details in their annuity contracts.” She further states that “they didn’t know, for example, they could be assessed a ‘surrender charge’ if they needed to withdraw money from an annuity too early. They didn’t know that the interest rate paid on their money could change.” I wonder how long these accusations of the stupidity of our seniors will continue before someone finally speaks up on their behalf and defends them as responsible, intelligent, and business savvy adults. After all, our seniors know how to purchase real estate on their own, buy cars, invest in stocks, bonds, and mutual funds, buy CD’s, and figure out the complexity of their insurance and Medicare. Since ALL annuities have forms that are required to be signed by anyone purchasing one, that fully disclose surrender charges and the details about any interest rate guarantees or potential changes, all of the important and necessary information regarding an annuity they are considering is ALREADY being given to them. Additionally, every annuity contract, when issued, contains full disclosure of this critical information. If that is still not enough, then each new annuity owner has a state mandated “free look” period from 10 days up to one month, in which to read and make sure they fully understand the contract to their satisfaction before they are bound by its terms. To suggest that our seniors are not capable of reading, asking questions, or raising concerns BEFORE they buy an annuity, is an insult to their intelligence. Our seniors are some of the wisest members of society. With all the required disclosures that are mandated by use of state approved forms, the buyer, regardless of their age, has to be held responsible for making sure they understand what they are buying. The agent can only offer the information. The responsibility with the purchase of annuities, as it has always been with any product we buy in a free society, lies with the consumer, who needs to pick the information provided apart, as much as necessary, in order to make their choices appropriately. But, unless fraud is proven, once the buyer makes their decision, we have to assume they did so willingly and fully aware of everything that was important to them.