Widow of NYC man who jumped to his death sues brokers, insurers over annuity sales

Image shows money and a gavel. — Three brokers and five insurance companies sold an elderly man annuities that were unsuitable, his widow claims in a New York lawsuit.

By John Hilton

The widow of a New York City man who committed suicide last summer by jumping off a building is suing brokers and insurers for allegedly selling him improper annuities.

Joan Jacobson claims her late husband Jay suffered from dementia and was preyed on by a trio of brokers. The brokers sold Jay Jacobson $2 million worth of annuities from 2019 and 2023, Joan Jacobson said, with no death benefits.

Jay Jacobson, 79 at the time of the initial annuity purchase, clearly suffered from dementia, his wife said in the lawsuit filed in New York Supreme Court.

“At the times these annuities were sold, [Jay Jacobson] was unlikely – by virtue of his advanced age and dementia – to live more than five years, let alone the near decade necessary to recoup just the muti-million dollar principal outlay,” the lawsuit states. “These annuities were objectively not in [his] best interest and the recommendations to purchase them are unjustifiable.”

On July 27, Jacobson, 84, committed suicide by jumping from a penthouse apartment at the Anagram Columbus Circle at 1 West 60th Street.

Interestingly, the lawsuit ascribes “fiduciary” status to the brokers who sold the annuities. New York adopted Regulation 187 in 2019. It requires insurance producers to act in the "best interest" of their clients when recommending life insurance and annuity products. While similar to a fiduciary duty, the rule does not technically state as much.

“At all times, a fiduciary relationship existed between [Jacobson] and defendants both at common law and statutorily,” the complaint says. Regulation 187 “required defendants to act in [Jacobson’s] best interest, thereby establishing a fiduciary duty.”

The Nov. 15 lawsuit initially named brokers Michael Venable, Ronald Heywood and Michelle Lister, along with USAA Life Insurance Company, New York Life Insurance and Annuity, Charles Schwab, Fidelity and Massachusetts Mutual Life as defendants.

On Friday, Joan Jacobson's attorneys filed a partial voluntary discontinuance dropping Heywood, Lister, and Charles Schwab from the lawsuit.

Among the companies, only Charles Schwab responded to a request for comment.

“While Schwab disputes the allegations in the Complaint, we express our deepest condolences to Mr. Jacobson’s loved ones for their loss,” the company said in a statement.

‘Would perform better’

Jay Jacobson bought his first annuity named in the complaint in 2019, a New York Life product sold through Heywood, a Charles Schwab broker, the lawsuit states.

The broker told Jacobson that the annuity “would perform better for him than a reasonably invested securities portfolio,” the lawsuit says. Those claims were false, Joan Jacobson alleges, because the annuity “had no death benefit and would take nearly a decade to simply recoup [the] principal investment amount back.”

Heywood “knew or should have known that the S&P 500 has historically returned roughly double-digit returns on an annualized basis, and even most conservative certificates of deposit would return several percentage points annually while providing FDIC guaranteed protection of principal.”

The New York Life annuity contract began July 24, 2019, the lawsuit states, and Jacobson was to receive monthly payments of $4,285.06 per month until his death and “nothing thereafter.”

In 2021, Heywood returned to sell Jay Jacobson another annuity, the lawsuit says, this time a MassMutual annuity with similar terms. The $500,000 MassMutual annuity took effect June 21, 2021, and paid Jacobson $4,630.67 per month until his death and nothing thereafter, the lawsuit says.

In 2022, Jacobson bought a $500,000 USAA annuity from Lister, the lawsuit says. It took effect on Aug. 19, 2022 and paid Jacobson $5,427.31 per month until his death and nothing thereafter.

A year later, Jacobson allegedly bought another $500,000 New York Life annuity from Venable. It took effect May 10, 2023 and paid Jacobson 5,413.59 per month until his death and nothing thereafter, the lawsuit states.

Heywood deferred comment to Schwab, but the other brokers could not be reached for comment.

Dramatic suicide

Joan Jacobson was named executor of her husband’s estate after his dramatic suicide.

The New York Post reported that Jacobson, who had run a professional staffing company, landed on a third-floor balcony.

Following his death, attempts were made to reverse the annuity sales, the lawsuit says, but none of the insurers would return any money.

“At the time of his death, [Jay Jacobson] had received little benefit from the $2,000,000 he invested in the Annuities sold to him by Defendants, receiving relatively few payments before his untimely death,” the lawsuit says.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.