Selling annuities to the elderly: appropriate or not?Blog added by Lauren McNitt on March 5, 2012
Lauren McNitt

Lauren McNitt

Denver, CO

Joined: September 08, 2010

My Company

The site heated up at the end of last week when contributor Roccy Defrancesco posted an op-ed about a case where an agent was found guilty of felony theft for selling an annuity to an 83-year-old woman. Roccy sympathized with the agent saying the case saddened him and that “the story simply speaks to the unprofessionalism of the attorney who decided to prosecute this case. It makes all attorneys look bad and shows us how abusive the legal process can be (and how helpless a defendant can be).”

But not all of our readers agreed with Roccy. For instance, one reader said, “[An] annuity is a long term saving vehicle and is not recommended for clients in their 80s and 90s who depend on dipping into their savings before dying. Furthermore, locking the client into a 10-year early withdrawal penalty is criminal.”

Another reader said selling an annuity to an 83-year-old is inappropriate, but that the agent should not be going to jail.

The comments on Roccy’s article brought up the following issues:

Is selling an annuity to an elderly person unethical? What if, like my grandfather, that elderly person is as sharp as a person of a much younger age?

In this case the woman was showing signs of dementia (the agent said he was unaware of this). What can agents who sell annuities to seniors do to protect themselves against facing similar criminal charges?

If you are of the opinion that selling an annuity to an elderly person is unethical, does the fact that the woman profited from the annuity make it less so?

Will this case negatively or positively affect the senior community? In other words, it could make it harder for seniors to access these products. But it could also help protect seniors against agents who are just concerned about getting a hefty commission. What do you think?

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