How to Buy an Annuity: How Does the Paperwork Process Work

Hi there. Stan The Annuity Man, America's Annuity Agent® licensed in all 50 states continuing our how-to buy an Annuity series, which people are going crazy over. They loved it because no one's ever talked about this before. Today's topic is how the paperwork process works. How that all application paperwork stuff works from start to finish.  

Understanding Annuity Basics

Here's how the paperwork process works with The Annuity Man® if you're using my team and me. Typically, you've already gone through, got my books for free, you've gone through the calculators on my site, you've watched the videos, you’ve listened to the podcasts, and you've talked with me one-on-one.

That might be one or two or three times, whatever it takes for you to feel comfortable, no pressure, none at all. You have to make the decision on your terms and on your time frame. I do respect that, and I will treat you like a professional; I promise you that. But let's just say you make the decision. Hey, I want to move forward with this annuity type and lock in this contractual guarantee. At that point, I'm going to say, "great, let me pull up my team's phone schedule, and let's set that paperwork appointment right now." Now, by the way, that initial appointment is going to be a Zoom call with you.

We're going to set that time, and they're going to call right on the money whatever day or time and time zone you're in; they’re going to call precisely at that time. Now, what they're going to do, is they're going to go through all of the application questions that we are required to ask. We're not going to ask any additional questions. We're only going to ask what the carrier requires us to ask, and those answers are not shared at all. They're confidential. Now, that application, my team is going to either send that to you electronically, or they're going to send that to you overnight UPS or FedEx. Either way, you're going to get that application; you will review that application for accuracy. It will be accurate because they will just put in what you told them to put in.  

Then you're going to sign and date it, and then you're going to send it back to my team. Whether that's electronic, send it back. By the way, that's all encrypted. Or if it's a challenging paper-type application. By the way, COVID has moved the carriers forward with going more toward online sending! It's encrypted, it's safe, period.  

You've written a check, or you've wired the money to them; you’ve locked in that guarantee.]]My team gets the application, reviews for accuracy, etc., and then I come in and review it and sign it. Then it's sent to the carrier. The carrier receives that app, looks at it from a suitability standpoint, and then once they deem it suitable and appropriate, they will assign a policy number. Once that policy number is assigned, and that typically happens quickly in most cases, they're going to assign that policy number. Once they assign the policy number that's unique to you and this contractual guarantee, that guarantee is locked in.  

The Time Frames

Now let's talk about the time-frames of how long it will take from start to finish. When I say start, start happens when the policy number is assigned. Up until that point is the application process, but at that point, that's the start. Once that policy number's assigned, once that contractual guarantee that you decided to buy is locked in, then that's the start. With an IRA or 401(k) type asset, that transfer will typically happen within a 3-6 week time period. You say, "Wait a minute, Stan The Annuity Man®, 3-6 weeks, isn't that a broad range?" Well, remember I'm working with all carriers. They're not all the same. They don't have the same back-office administration.

You've written a check, or you've wired the money to them; you’ve locked in that guarantee.

Some are faster than the others, etc., doesn't make them good or bad. It is what it is. But just look at three to six weeks, but don't worry about any of that because the contractual guarantee is locked in because the policy number has been issued and assigned to you. That's IRA and 401(k) type assets, three to six weeks. Now, if you're just writing a check or having money wired from a checking account or a money market account to the carrier, the process goes from start to finish again. Once again, you got to go through the application, and the policy number is assigned.

Once that policy number's assigned, contractual guarantees are locked in and start to finish starting within two weeks. Start to finish—one exception. Currently, there are a lot of multi-year guarantee annuity purchases because the rates are a lot better than CDs at this time. People like the simplicity of multi-year guarantee annuities, which is the annuity industry version of a CD. When carriers come out with a rate that's high rate, they get inundated with applications, they're just overwhelmed with business, now they're going to get through it, you shouldn't worry. You've written a check, or you've wired the money to them; you’ve locked in that guarantee. Remember the policy negotiation issue; you locked in that guarantee. People always ask, what happens in that interim? From the time they receive your money, you're earning interest. Now, you might not have the policy, but they're not just taking the money and then not paying interest when they're catching up with all of the demand to issue the policy.

You're going to earn interest when they receive and deposit that check, so don't worry. You've locked in the rate; it’s a competitive rate that will probably not be there forever. It's going to take a little bit more time than the typical two weeks, to issue the policy. Again, the annuity companies are on your side. They're not going to take advantage of you.  

They Work for You

The companies are on your side at the end of the day. I mean, they are working for you. We are working for you, and at any point in the process, you can call my staff or me and ask any questions you have. Let's just say we get to the end of the line, and they issue the policy. Typically, that policy is sent to me for review. I'm going to review it for accuracy with my team, and then we're going to second-day air it to you.  

Once you receive that policy, many companies, not all, will require what's called a delivery receipt, which means you sign and date, and we'll put a postage-paid envelope in there to send that back to us showing that you did receive the policy. But here's one of the best things that the annuity industry has done: they have a free look provision. A free look provision means that the money is at the carrier, the policies in force, and you just received the policy.

Free Look Period

It's in force, the contractual guarantee is in place, but every state has what's called a free look period, which means that you can get your money back during that free look period if something's changed or you don't want to do it anymore, etc. You only have to give it a reason. You say, "Hey, Stan, I want to free-look the policy.” No problem, we'll take care of it, we'll get the forms in place, and get you your money back. There's not another financial product on the planet that lets you test drive the product. Or once the policy is in force, you can get your money back, and you don't have to give them a reason. You just say I want my money back on the free look provision. Each state is different in its free look provision period, and the clock starts ticking when you receive the policy. In some states, it's ten days from the day you receive the policy; sometimes, it's 30 days from the day you receive it. We can help you with that and tell you, and typically, within the policy, there's a sheet of paper that gives us time-frames for your specific state of residence.

But even after going through all of that, the annuity company is still pro-customer, pro-consumer, and giving you an out if you need an out if something's changed or you just don't want to do the annuity strategy anymore. You've just changed your mind, and that's okay. The bottom line with all the processes that we just talked about is an open line of communication. Don't be afraid to contact us. Don't be afraid to get the policy and call the company. If you don't want to talk to us, you can call the company. There's an 800 number there; call them. Some non-sales people are going to answer the phone.

They're going to pull up your policy in front of them on the screen, and they're going to read off precisely what the guarantees are and ask if you have any questions. And of course, you can call us, and you should feel comfortable doing that and asking us any question.

Never forget to live in reality, not the dream®, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.