Do Annuity Policies Require Funding Before Issuance?

Short Answer

Yes. Annuity policies must be funded before they are issued, but consumers are protected by specimen policy review options and free look periods.

What Is Policy Funding?

Policy funding refers to sending money to the insurance carrier so that an annuity policy can be issued in the buyer’s name.

How Policy Funding Works

To issue an annuity policy, the carrier must receive the funds first. Once funded, the policy is issued and delivered to the buyer.

How Policy Funding Works Under Current Conditions

After funding, the policy is issued and sent to the buyer. A state-specific free look period begins once the policy is received.

When Policy Funding May Be Required

Policy funding is required when the buyer wants the annuity policy formally issued rather than reviewing a specimen policy.

When Policy Funding May Not Be Required

Policy funding may not be required if the buyer is only reviewing a specimen policy without issuing the contract.

Common Misunderstandings About Policy Funding

A common misunderstanding is that funding a policy prevents cancellation. The free look period allows cancellation for a full refund.

Key Considerations for Policy Funding

Free look periods vary by state, but most allow approximately 30 days to review the policy and request a full refund.

Bottom Line

Annuity policies require funding before issuance, with consumer protections provided through specimen policies and free look provisions.

FAQ

Do annuity policies have to be funded before issuance?

Yes. Funding is required before issuance.‍

Can a policy be reviewed before funding?

‍Yes. A specimen policy can be reviewed.

Can the policy be canceled after funding?

‍Yes. The policy can be canceled during the free look period for a full refund.

How long is the free look period?

‍It varies by state, but most are around 30 days.