RICHMOND — Seniors beware – especially if you encounter individuals claiming to have special senior credentials and peddling insurance products that sound too good to be true. You may receive unsolicited telephone calls or e-mails about these products or invitations to “free lunch” seminars purportedly designed to help you make the most of your money.
Armed with a lifetime of savings, individuals ages 55 and older are the fastest growing segment of investors and have become the focus of many insurers’ and insurance agents’ marketing and sales efforts. Increasingly seniors are being approached by individuals claiming to have special expertise and training in helping them determine the best place to invest their money. While some of these “senior specialists” are legitimate, others may have little or no training, according to the State Corporation Commission’s (SCC) Bureau of Insurance. In some cases, a designation such as “senior specialist” or “senior advisor” is simply a marketing device and does not represent meaningful training or expertise.
“What you see is not always what you get when it comes to ‘senior experts,’ ” warned Virginia Insurance Commissioner Alfred W. Gross. He and other insurance regulators are concerned that these “senior specialist” designations may provide a false sense of security to older investors. Although some organizations require members to complete rigorous training and pass extensive examinations to receive senior designations, others require little or no training to use them.
Commissioner Gross urges seniors to carefully check the credentials of individuals who claim to be senior specialists. “Even if someone has a lot of letters or designations behind his or her name, that doesn’t always mean he or she is qualified to tell you what to do with your hard-earned money,” he said.
He cautions seniors about “free lunch” seminars that often use high pressure or scare tactics to get attendees to invest in insurance or financial products that may not be right for them, and to carefully evaluate insurance products and the people selling them. “Don’t simply rely on ‘expert’ advice given over the phone, by e-mail or at a seminar. Do your homework before you follow someone’s recommendation to transfer your existing savings and investments into insurance products. Make sure you understand their features, benefits and costs, as well as their vulnerability to stock market ups and downs,” Gross said.
Although many sophisticated and complex insurance products are legitimate products, they are not suitable for everyone. Complex products such as equity indexed annuities and variable annuities often have high surrender charges, and agents often earn steep sales commissions for moving investors into them. “Don’t let someone pressure you into making a snap decision about an insurance product that you don’t fully understand. Make sure the product meets your personal needs and investment objectives,” Gross said.
In Virginia, insurance companies and agents are required to follow certain guidelines and make specific disclosures when presenting annuity products to consumers. They are prohibited from knowingly recommending unsuitable products to a customer. The same holds true for securities broker-dealers and investment advisors and their agents and representatives.
Gross urges Virginians to make sure that insurance products and the individuals promoting them are licensed and approved by the Bureau of Insurance. For more information, contact the Bureau in Richmond at (804) 371-9741 or toll-free (nationwide) at 1-877-310-6560 or visit http://www.scc.virginia.gov/division/boi/index.htm. The Bureau can also help with questions or complaints regarding insurance companies, agencies, and other insurance products.
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