Homepage / Money

Some Seniors Taken By Risky Investments

86-Year-Old Donie Sutton Out More Than $10,000 Due To Indexed Annuity

POSTED: 12:08 pm CST November 12, 2008
UPDATED: 7:05 pm CST November 12, 2008

Stocks are falling and people's portfolios are diminishing, which is why indexed annuities are so popular.

Related: Video: Index Annuities Catch Some Seniors

But there's a catch, and some seniors are finding it too late and losing thousands of dollars.

Donie Sutton, 86, said an independent insurance agent made an index annuity sound pretty good. She put her entire life savings in an index annuity.

But afterwards, she said, her family learned a little detail about the annuity: In order to get her money back in full without penalty, she'll have to live to be 95 years old.

"I don't expect to live that long," said Sutton.

With an annuity, your money is tied to the stock market but insured not to lose a dime. It's a long-term investment, usually at least 10 years.

Insurance agents across the country have been criticized for selling these annuities to seniors well into their 70s and 80s.

Warnings have gone out about it -- Minnesota's attorney general even sued insurance companies, claiming deceptive sales practices while selling annuities to seniors.

"I think someone ought to be taken out and horse-whipped for it," said John Sutton, Donie's son.

Fearing she may need her money in a pinch, Donie Sutton ultimately pulled out of her annuity and lost more than $10,000 in penalties.

"I would hope that the agent would look at the suitability of that product," said Rebecca Kelly, of AARP. "And in this case, clearly, it was not a suitable product."

But the agent in Donie Sutton's case won't be held accountable by the state.

Investigators looked into the matter, and the state found no wrongdoing, partially because Sutton signed a statement saying she understood everything.

Her family now wants lawmakers to forbid agents from selling these investments to Tennessee's older citizens.

"I don't think they should be able to sell it to anyone older than 65, at the most," John Sutton said.

The salesman who sold Donie Sutton the annuity would not talk on the record and never responded to requests for an interview. He indicated he did nothing wrong, and that he made everything clear about the possible penalties involved.

Links We Like

Sponsored Content
If you have aspirations of becoming a millionaire, check out these five habits that may be worth emulating. More

To get the most out of your remodel, check out these 10 home updates that have the biggest payoffs when it comes time to sell your home. More

Do you have concerns about the recommended vaccines for your child? Get the facts to clear up any confusion about vaccinations. More

$4,000 scholarships are available to real people just like you! More

Credit Report

560? 675? 720? The average US Credit Score is 692. What is your score? See it online for FREE! More

Best Local Rates On...



LocalNational

30 Yr Fixed Mortgage4.97%5.02%

48 Mo New Car Loan6.48%6.79%

$30k Home Eq Loan7.84%8.33%

6 Month CD1.13%1.13%
Help! I don't understand!
More Rates


Sponsored Links

Stock Quotes

Get a Quote
Enter Symbol


Smart Savings

Do you catch yourself counting every penny these days? Find money-saving ideas big and small in our Smart Savings guide. More


E-Mail News Alerts
Get breaking news and daily headlines.
Browse all e-mail newsletters