Understanding How Annuity Policies Are Issued, Funded, and Reviewed

This is one of the most common questions I get, and I understand why people ask it.

You’re basically saying, “Stan, I want to see exactly what I’m buying before I send money to the insurance company.”

That’s a reasonable concern, so let me explain how annuity policy issuance actually works.

Seeing the Policy Before You Commit

If you want to review the policy language before any money moves, we can do that.

It’s called a specimen policy.

A specimen policy shows you the exact contract language, just without your personal information and without the dollar amount filled in. You can read it line by line and see exactly what the carrier will issue.

That part is not a problem at all.

Why Funding Comes Before Issuance

If you want the carrier to issue the policy in your name, the money does have to be sent to the carrier first.

That’s simply how annuity contracts work.

The policy is not issued until it’s funded. There’s no way around that part of the process.

But that does not mean you’re locked in the moment you send the money.

How the Free Look Period Works

Once the policy is issued and sent to you, the free look period begins.

Every state is different, but most states give you around 30 days to review the policy once you receive it.

During that time, the policy is in force, but you’re not committed.

You can review it, ask questions, and decide if it does exactly what you expected it to do.

What Happens If You Change Your Mind

If you decide you don’t want the policy during the free look period, you can cancel it for any reason.

You don’t have to explain why.
You don’t have to fill out a justification form.

You simply take advantage of the free look provision, and the carrier sends your money back in full.

That’s one of the things that sets annuities apart from other financial products.

After the Free Look Period Ends

Once the free look period is over, the policy is locked in.

That’s why I always encourage people to actually use that review window. Read the contract. Make sure it matches what you wanted.

My Bottom Line

Yes, annuity policies are funded before they’re issued.

But you’re not doing it blindly.

You can review a specimen policy beforehand, and you still have a free look period after issuance where you can walk away with a full refund.

That’s a strong consumer protection, and it’s one of the positives of how annuities work.