Released: December 03, 2011

New financial protection laws to help California seniors

Source: Los Angeles Times

California's elderly are about to get new protections against being victimized by unscrupulous financial product salesmen. On Jan. 1, a new law takes effect to guard unsophisticated senior citizens from purchasing unneeded annuities that are not likely to provide them with promised financial security. Annuities are a form of insurance that provide a guaranteed regular income to policyholders. The law requires insurers to verify that an annuity purchase, replacement or exchange would provide the promised benefits based on a buyer's age, income, liquidity needs, financial goals and other factors. It also mandates that the seller prove that the annuity provides "a tangible net benefit" to its buyer.

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