The Wall Street Journal reported that a California insurance agent, who sold an equity indexed annuity to an 83-year old woman with dementia, has been convicted of felony theft and ordered to serve 90 days in jail. Glenn Neasham, who once enjoyed an annual income of $500,000 from selling such products, now seeks donations to pay his legal fees.
An equity indexed annuity is a complex, illiquid financial product that most experts agree is unsuitable for an 83 year old. Should the policy holder need to access her invested principal in the first few years of the policy, to meet medical expenses for instance, she would be hit with surrender charges ? 12.5% of the principal amount during the first year, according to Allianz, the issuer of the policy.