CLIENT STATES FA RECOMMENDED SHE SWITCH FROM HER OLD HARTFORD ANNUITY TO A NEW LINCOLN LIFE ANNUITY. CLIENT INDICATES FA INFORMED HER HE WOULD KEEP $2,000 IN THE HARTFORD POLICY TO KEEP THE $17,000 DEATH BENEFIT. CLIENT STATES SEVERAL DAYS LATER SHE GOT A LETTER FROM HARTFORD SAYING THE ANNUITY WAS ONLY WORTH $449.00 AND THE POLICY WAS BEING CANCELLED. CLIENT FREE LOOKED THE LINCOLN CONTRACT BUT HARTFORD WILL NOT REINSTATE THE POLICY. CLIENT WANTS THIS MONEY TO STAY TAX DEFERRED. CLIENT MAY NOW SUFFER NEGATIVE TAX CONSEQUENCES AND SHE HAS LOST THE DEATH BENEFIT. CLIENT IS REQUESTING REIMBURSEMENT OF BOTH. FILING REQUIRED, DEATH BENEFIT ALONE EXCEEDS $5,000.

$17,000.00

$6,500.00

BASED ON OUR REVIEW, WE ARE OFFERING A SETTLEMENT OF $6,500.00 TO RESOLVE THIS MATTER. THE SETTLEMENT OFFER WAS CALCULATED BY TAKING THE PRESENT VALUE OF THE APPROXIMATE $17,000.00 DEATH BENEFIT LOST, WHICH WOULD HAVE BEEN RECEIVED BY THE BENEFICIARY AT THE TIME OF THE CLIENT'S DEATH. IT DOES APPEAR THE INTENT WAS TO MAINTAIN A SMALL BALANCE IN THE HARTFORD LIFE ANNUITY TO KEEP THE CONTRACT IN FORCE. UNFORTUNATELY, AT THE TIME THE 1035 WAS PROCESSED THE VALUE OF THE ANNUITY HAD DECLINED BELOW THE MINIMUM BALANCE NEEDED TO KEEP THE POLICY AND THE ANNUITY WAS LIQUIDATED BY HARTFORD LIFE. THE MINIMUM BALANCE REQUIREMENT WOULD HAVE BEEN DISCLOSED BY HARTFORD LIFE AT THE TIME OF PURCHASE AND CLIENT ALSO SIGNED AN ACKNOWLEDGMENT LETTER ON SEPTEMBER 15, 2011, STATING SHE UNDERSTOOD THIS IMPLICATION EXISTED FOR HER ANNUITY CONTRACT. 1/30/12 RECEIVED SIGNED SETTLEMENT OF CLAIM FROM CLIENT.