Buyer’s Remorse Should Not Become Excuse for Lack of Due Diligence

To expand of the idea that buyers of annuities are always furnished, by law, all the information they need in order to make an informed decision, I wanted to discuss this issue from a slightly different angle. With the purchase of an annuity, the entire process, from application to contract delivery takes at the minimum, two weeks, and usually up to a month or more. Consider that the final decision to make an application to purchase an annuity is probably not reached until after several meetings with the agent. Then, when the policy is issued, up to a month later, and delivered to the client, the buyer has an additional “free look” period that ranges from 10-30 days, depending upon the state, to allow the client time to receive and review the final contract documents before becoming bound by its terms. If for any reason the client decides they do not like any provision of the contract, they simply notify the issuing company, before the expiration of the free look period, and they can return the contract, get all of their money back, and it will be as if the whole thing never happened. This lengthy process, that averages several months, provides more than sufficient time for any potential buyer to check out the credentials of the agent or the company with which they are considering doing business, with their state insurance department, or, to get a second opinion about their consideration from another advisor, attorney, CPA, or family member. Once the “free look” period is over, however, the contract goes into full effect, and both parties are then legally bound by its conditions. If after this time, a buyer changes their mind, or suddenly decides to look into the details of their purchase for the first time, and then finds them not to their liking, it is too late. They signed a contract with full disclosure and with adequate time to do their own investigations before committing to it, but they chose not to. This “Buyer’s Remorse” does not excuse an annuity purchaser for their lack of personal responsibility, nor should it provide them with escapes above and beyond that of the contract to which they agreed, nor should it assume blame to the agent, who HAD to use all the state approved and required disclosure forms, or the policy would have never been issued. With all the safeguards and disclosure requirements surrounding the purchase of fixed annuities, there is NO excuse for anyone holding an annuity contract they do not understand and do not want, except for their own lack of due diligence,or because they simply changed their mind.