An AmerUs Group spokesman, Marty Ketelaar, said the company had "strong defenses" against the suit but declined to comment further.
Hazel Hauswedell, 73, said the man who sold her two annuities was plenty charming — at first.
Hauswedell, a retired sales manager for a music store, said she met Barry Baricza in December 1999 while waiting for her Ford Taurus to be serviced at a repair shop.
Baricza dropped by her trailer home near Palm Springs. He treated her to lunch. When she talked about the difficulty of living on a fixed income, he said he had the answer: an annuity that could grow in value and provide steady payouts.
Hauswedell, a widow whose husband had handled the family finances, put $70,000 of her savings into an annuity, according to a suit she filed against the agent and the insurer, Conseco Inc. When Baricza returned weeks later and urged her to buy another, she resisted.
"I decided, 'I don't better put all my eggs in one basket,' " Hauswedell said. "He got very upset."
She said Baricza picked up her phone, asked for the number of her bank and dialed it. When a bank employee answered, she said, he handed her the phone and she reluctantly ordered a $67,000 transfer to buy the second annuity.
Hauswedell said she felt pressured to make the investment and did not understand its restrictions, including penalties of up to 20% for early withdrawals. She received no immediate income from the annuity and later had to draw down her principal to make ends meet, she said.
Conseco, based in Carmel, Ind., and Baricza denied the allegations before reaching settlements with Hauswedell last year. Baricza said the agreement barred him from discussing the matter.
Hauswedell, who now lives in Bakersfield, described her dealings with Baricza in interviews conducted before she entered into the settlement.
"I thought he was my friend and he was advising me right," she said. "I found out later he was just in it for the commissions."
A $50,000 Exit Fee
Nancy Clark was 83 when she bought a $125,000 annuity from National Western Life Insurance Co. in 2002. Her son, James, said she was in the early stages of dementia and mistakenly believed she would have access to all of her money if she had to enter a nursing home.
In fact, she would have to pay surrender fees of 25% if she took out more than 10% of her savings in any year during the first six years of the contract.
James Clark, a retired building inspector from San Bernardino, said his mother told him about the annuity not long after she purchased it. Clark said he was alarmed by the withdrawal charges and called the salesman, Ezra Chapman, to find out more.
The first conversation was "fairly mellow," said Clark, 58, who is suing Chapman and the insurance firm. But a follow-up call turned ugly.
"He became very irate on the phone, very vulgar, threatening, said I was crazy," Clark testified in a deposition.
By the time his mother died in 2004, the annuity had grown to $198,000. But Clark didn't get that amount; he had to pay a $50,000 surrender fee.