A Claremont, Calif., lawyer says life insurers should compare annuity deferral periods with customers’ life expectancies.[@@]
The lawyer, William Shernoff of Shernoff Bidart & Darras L.L.P., has joined with other lawyers to file a suit concerning the deferral period issue in a state court in Los Angeles.
The complaint accuses Midland National Life Insurance Company, West Des Moines, Iowa, of selling annuities with payment schedules calling for payments to start after the end of the purchasers’ projected lifespans.
In the suit, Shernoff identifies one annuitant, John Migliaccio, who was 73 when he paid $43,000 for a Midland National annuity. Migliaccio, who has died, was scheduled to start receiving annuity payments after the end of his expected lifespan, Shernoff says.
Shernoff is seeking court permission to represent a large class of older annuity purchasers who have bought contracts with long deferral periods.
Other lawyers working on the suit include Howard Finkelstein and Stephen Basser.
Robert Phillips Jr., a lawyer for Midland National, says the company does not want to talk about the particulars of the Migliacci case in the press but believes the suit may be based in part on confusion about Midland National annuity contracts.
In general, holders of the type of annuity in question have a right to annuitize 12 months after the annuity takes effect and to make penalty-free withdrawals of 10% of the account assets, Phillips says.