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Annuity Horror Story...Again
Old 06-04-2004, 12:27 PM   #1
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Annuity Horror Story...Again

Jun 4, 2004


By DAVID SOMMER
dsommer@tampatrib.com

CLEARWATER - An 81-year- old woman who says she was tricked into wasting part of her life savings is suing a South Dakota insurance company and the local agent who sold her an annuity.

Fern Wakulich saw her income from an approximately $138,000 nest egg fall from $1,142 a month to $794 a month after a New Port Richey-based insurance agent convinced her to invest in an annuity offered by Midland National Life Insurance Co., according to the lawsuit filed this week in Pasco-Pinellas Circuit Court.

Wakulich would not currently be receiving any monthly income if she had not taken further losses to get immediate payments on the annuity, said her Fort Lauderdale-based attorneys, John Hargrove and Cristina Pierson. Monthly annuity payments were not scheduled to begin until 2015, when Wakulich would be 92 years old, the lawyers said.

The money was invested in another annuity that paid Wakulich $1,142 a month before the Clearwater woman contacted insurance agent Bijan Razdar of American Independent Financial Services Inc., Pierson said.

Wakulich heard Razdar's sales pitch on a weekly ``sponsored radio program'' on WGUL, the lawsuit says.

Razdar, who could not be reached for comment Thursday, persuaded Wakulich to pay about $9,000 to get out of her old investment before its term expired, Pierson said.

Then, in February 2001, Razdar sold her a Midland National annuity, collecting a commission of about 13 percent to 15 percent, the lawsuit says.

The new annuity, into which she deposited $129,271, required a wait of 14 years before monthly payouts would begin, according to the lawsuit.

``From the very start, Wakulich explained to Razdar that she had a fixed income and needed immediate access to her retirement savings in order to meet her living expenses,'' the lawsuit says. ``Midland, Razdar and American Independent failed to inform Wakulich of the disadvantages of the equity index annuity product, or that she would pay new and significant commission charges.''

Once Wakulich realized what she had done, she complained to Midland, Razdar and the state Department of Insurance, but received no satisfaction, Pierson said.

Calls to Midland's executive office in Sioux Falls, S.D., and to American Independent were not returned Thursday afternoon.

In 1996, a Pinellas County woman who ran a $7.7 million pyramid scheme targeting retired couples who listened to her weekly paid radio program was sentenced to 24 years in prison on charges including wire and mail fraud. Jan Weeks-Katona and her son Jason Weeks were also convicted of money laundering and conspiracy to murder a federal judge.



Looks like the agent got a commission of about $17,000. *I'll bet this was not the first time that he tried this.
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Re: Annuity Horror Story...Again
Old 09-27-2006, 10:46 AM   #2
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Re: Annuity Horror Story...Again

Found this old topic..................man that's total crap. That dude should be hung upside down so people can spit on him.................
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Re: Annuity Horror Story...Again
Old 09-27-2006, 03:37 PM   #3
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Re: Annuity Horror Story...Again

Quote:
That dude should be hung upside down so people can spit on him..
... but close enough to the ground so people could ...
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Re: Annuity Horror Story...Again
Old 09-27-2006, 09:57 PM   #4
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Re: Annuity Horror Story...Again

When my grandpa died at 85, he had several terrible annuities that banks talked him into. Before that he just had CDs.

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Re: Annuity Horror Story...Again
Old 09-28-2006, 03:11 AM   #5
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Re: Annuity Horror Story...Again

Never ever buy anything from a bank but a cd.

Before i met my wife she had no investing knowledege. A part time mutual fund salesman at north fork bank talked her into going 100% into tech funds before the big bubble burst.
Can you imagine sticking a widow in that? She probley had good recourse to sue for losses but didnt pursue it.
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Re: Annuity Horror Story...Again
Old 09-28-2006, 09:31 AM   #6
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Re: Annuity Horror Story...Again

Quote:
Originally Posted by mathjak107
Never ever buy anything from a bank but a cd.

Before i met my wife she had no investing knowledege.* A part time mutual fund salesman at north fork bank talked her into going 100% into tech funds before the big bubble burst.
* Can you imagine sticking a widow in that?* *She probley had good recourse to sue for losses but didnt pursue it.
I'd amend your comment to say don't buy ANYTHING from a bank, not even a CD. I could show you some comparisons of 1-2 year CD rates to Treasuries or short term high quality bonds that would make you cringe at CD's.............

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Re: Annuity Horror Story...Again
Old 09-28-2006, 09:57 AM   #7
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Re: Annuity Horror Story...Again

Of the 3 main type of financial institutions that most of us deal with in a lifetime, banks, mutual fund companies and insurance companies, most of them have questionable marketing practices. Many folks spend a lifetime trying to find the best fit for them in each catagory. They often die before locating the best combination for themselves.

The thing of it is, it really is not difficult to ferrit out the best bank, mutual fund family or insurance company, but it does require one to become educated in the ways of the world of finance. Few of my fellow citizens care to do this and are left with a big mess is many instances.
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