financial fraud fin pro hero

Protecting seniors from elder financial abuse and other aging risks

Clients could be unaware of the risks that financial fraud can pose to their retirement security.

As clients reach retirement, they are no doubt excited to achieve that status and enjoy some well-deserved time off. With retirement as their focus, it’s likely that falling victim to elder financial abuse is the last thing they want to think about, although it’s a threat that can deplete their hard-earned savings. As financial professionals, you know this is a real issue for elderly clients, who are at the highest risk of experiencing financial fraud.

However, according to the Allianz Life Retirement Risk Readiness Study,1 less than a quarter (24%) of retirees worry they may become a victim of financial fraud, compared with 42% of pre-retirees and 46% of near-retirees.

The study surveyed three categories of Americans to get different perspectives on retirement: pre-retirees (those 10 years or more from retirement); near-retirees (those within 10 years of retirement); and those who are already retired. Findings show current retirees are actually the least worried of any group about financial risks that can come with aging. This includes not only fraud and scams that target seniors, but also some of the major life changes that accompany aging and can impact finances, like health care risks and cognitive decline.

Heads in the sand?

Despite these major risks, retirees don’t seem to be too worried. Only 40% of retirees indicated concern about needing long term care, and just 41% worry about needing to move to an assisted living facility.

Furthermore, retirees are even less worried about health conditions, such as cognitive decline, that could prevent them from being able to manage finances on their own (42% versus 57% of pre- and near-retirees).

We know these risks are more likely to impact older clients, and it can be difficult for them to face their own aging process and the threat it can pose to their retirement security. As a financial professional, you can help watch out for fraud and scams that your clients may fall prey to.


Red flags can include:


Sudden, excessive preoccupation with policy/contract values


Requesting beneficiary changes without explanation


Liquidating assets in spite of penalties (e.g., cashing out an annuity)


Nervousness or agitation when discussing financial matters


Unusually large, frequent, or urgent requests for withdrawals


Adding a third party (friend or relative) as a co-owner

Beyond fraud, it also means having a financial plan in place to help cover rising health care costs, expenses tied to an unexpected illness or injury, and costs around potential long term care or assisted living expenses. This could mean considering a retirement income solution like an annuity to help cover these costs as part of your clients’ overall portfolio, or perhaps a fixed index universal life insurance policy for death benefit protection2 as well as living benefits with accumulation potential that allows for a loan or withdrawal3 against any available cash value accumulation in the policy to help cover unexpected expenses.  

By taking steps now to help clients understand the financial risks that accompany getting older, and helping them create a plan to help mitigate these risks, you can guide them toward a more enjoyable retirement.

1 Allianz Life conducted an online survey, the 2021 Retirement Risk Readiness Study, in December 2020 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k.

2 The death benefit is generally income-tax-free to clients’ beneficiaries.

3 Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.

• Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF

Products are issued by Allianz Life Insurance Company of North America. Variable annuities are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.

Product and feature availability may vary by state and broker/dealer.