013: How the Annuity Buying Process Works with The Annuity Man

0:04
welcome to

0:05
fun with annuities with your host me

0:07
stan

0:08
the annuity man america's annuity agent

0:11
can annuities be fun

0:12
can contractual guarantees be fun

0:14
absolutely they can find out the brutal

0:17
facts about annuities

0:19
with no sales pitches or high pressure

0:21
nonsense

0:22
just the brutal and factual annuity

0:25
truth which is all you need to hear

0:27
let's have some fun with annuities and

0:29
let's have that fun start

0:31
right now

0:37
hey this is stan the annuity man and

0:39
welcome to fun

0:40
with annuities today's topic is very

0:43
important

0:44
how the annuity buying process works i

0:46
get this question all the time

0:48
from people that are interested in

0:50
annuities and they have absolutely no

0:52
clue

0:53
on how the process works so that's what

0:55
this podcast is going to be all about

0:57
remember

0:58
our goal is to make annuities simple you

1:00
know because annuities are math they're

1:01
contracts

1:02
and you own them for what they will do

1:04
not what they might do the will do part

1:05
is the contractual guaranteed part

1:08
of the contract never make a decision to

1:10
buy an annuity on potentials

1:12
hypotheticals theoreticals back

1:13
tested return scenarios hopeful agent

1:15
return scenarios

1:17
buy them for the contractual guarantees

1:18
because that's what they are contracts

1:20
so what we're going to go through today

1:23
is if you purchase an

1:24
annuity through standing new demand the

1:26
annuity man how does that work

1:28
with us and so we're going to go through

1:30
the details fully

1:31
transparent on how this works you know

1:34
the time frames

1:35
you know how to lock in the quotes if we

1:37
can do that the actual information

1:39
that's needed

1:40
etc and all the exceptions we're going

1:42
to go through it all so

1:44
hang in there with me i think this is

1:46
very important for you to understand

1:48
so there'll be no surprises if you go

1:50
through the process with us okay

1:52
so dealing with stan the annuity man the

1:54
only way that i'm going to call you

1:56
ever is if you set an appointment for me

2:00
to call

2:01
okay or if you're a client and i need to

2:03
get a hold of you about a specific

2:04
contract but if you're not a client

2:07
yet i'm never going to call you unless

2:10
you

2:10
set an appointment for me to call and

2:12
there's places on my email

2:13
and on the website for you to do that so

2:16
a lot of times

2:18
you know i never talk to you because

2:19
you're not ready to go that's fine

2:21
that's the process that we use which is

2:23
i respect you

2:24
i treat you as a professional i want you

2:26
to have all the information needed i

2:28
want you to have the best quotes

2:29
available

2:30
and i want you to make your decision

2:32
your buying decision

2:33
on your time frame and you're the only

2:35
one that knows that so there will be no

2:37
pesky phone calls or persistency and

2:39
that type of stuff you'll get some

2:40
emails from us that's about it

2:42
so you set the appointment to talk with

2:44
me we talked on the phone

2:46
one numerous times however much it takes

2:48
for you to feel comfortable with the

2:49
decision

2:50
and you say i want to move forward with

2:51
this specific quote

2:53
with this specific carrier now from that

2:56
when i hear that from you say okay

2:58
that's great

2:59
we've gone through the limitations and

3:00
benefits i've answered all your

3:02
questions i'll say okay after i hang up

3:03
this

3:04
phone with you what i'm going to do is

3:06
send you an email

3:08
so that you can set an appointment with

3:09
my administrative team

3:11
it's the same process of setting an

3:12
appointment with me you just go through

3:14
you look at their online schedule and

3:16
you set an appointment for an

3:17
appointment that works for both of you

3:19
so you set an appointment with them and

3:22
you get on the phone and they go through

3:23
all of the questions

3:25
and fill out the paperwork

3:27
confidentially they're just going to ask

3:29
you all the questions

3:30
if the carrier offers an e-app an online

3:33
application we will use that

3:35
and so the signatures and all of that

3:36
will be online

3:38
but if they do not and a lot of them do

3:40
not we will

3:42
use the paper application and so the

3:44
administrative team will fill out all

3:45
the information

3:47
that you tell them and then they will

3:49
overnight

3:51
that paperwork to you so that you can

3:54
review it

3:55
for accuracy and then sign and date it

3:58
now inside of that overnight that we

3:59
send you with the application

4:02
there's also a prepaid ups overnight

4:04
that you're going to send back to

4:06
us after you sign and date everything

4:08
okay

4:10
once i receive the paperwork for you my

4:12
team receives that

4:14
then i will review the application

4:16
personally

4:17
and then i will sign and date it and

4:20
then i will overnight it to the annuity

4:22
company

4:23
that's how the process works so the

4:25
annuity company gets it we will send you

4:27
an email

4:28
telling you that we received the

4:29
paperwork we've overnighted it to the

4:30
carrier

4:31
then after the carrier receives it from

4:33
us my administrative team

4:35
in about three to four days after that

4:37
we'll start following up with them

4:39
and we will keep you updated on the

4:41
process

4:42
ongoing via email so you'll be getting

4:45
emails

4:46
here's where the process stands you know

4:48
if we're going to need some help from

4:49
you

4:49
to either get on the phone or call we'll

4:51
tell you but

4:52
you'll be in the loop from start to

4:55
finish from my administrative team via

4:58
email

4:59
so a couple key paperwork points based

5:01
upon the kind of

5:04
account that you're using so let's just

5:06
say it's an ira transfer first thing you

5:08
have to understand this is very

5:09
important

5:10
when it's an ira transfer it is a

5:13
non-taxable event

5:14
it will not trigger taxes it's going to

5:16
transfer from one ira

5:18
to the other okay if it is a

5:22
non-qualified account or a non-ira

5:24
account you're going to write a check

5:27
made payable to the annuity company

5:32
so that's how that's going to work if it

5:34
is a

5:35
1035 exchange in 1035 refers to the irs

5:38
code that addresses annuity to annuity

5:41
transfer so if you're transferring from

5:42
one annuity

5:43
to another that's a 1035 transfer once

5:46
again

5:47
a non-taxable event does not trigger

5:51
any taxes now if you're transferring

5:53
from one annuity to another

5:55
and this is very important the annuity

5:57
that you're transferring to

5:59
has to be mathematically better and in

6:02
your favor it has to be better for you

6:04
not just the agent okay so we have to do

6:07
a side by side comparison by law

6:10
that proves mathematically that the

6:12
annuity that you're transferring to

6:15
is better than the one that you're

6:16
transferring from and we have to be very

6:18
upfront about any type of benefits

6:20
that you might be leaving on the table

6:23
from your other annuity

6:24
and a lot of times these companies

6:27
design annuities especially if you put

6:29
writers on the annuities like an income

6:31
rider on a variable or indexed annuity

6:33
they're almost untransferable because

6:37
you're going to leave that benefit on

6:38
the table only that accumulation value

6:40
transfers and never allow an agent or

6:43
advisor to say

6:45
transfer this because the

6:49
upfront bonus which is monopoly money

6:52
you need to know that as well

6:53
overcomes any surrender charges do not

6:57
transfer an annuity if it has surrender

6:59
charges so it has to be out of surrender

7:01
charges

7:02
and the new annuity has to be better for

7:04
you mathematically than the one you're

7:06
leaving

7:07
also understand that once you start the

7:09
transfer process

7:11
an agent or advisor cannot stop it

7:14
they can't get in the way of it once you

7:16
sign the paperwork that gives

7:18
legal authorization for that transfer

7:20
they cannot get in the way

7:22
they can call you yell at you be

7:24
unprofessional

7:25
tell you to stop it but they can't stop

7:27
it you're the only one that can stop it

7:29
it's your money

7:30
so also remember the policy is delivered

7:32
to me once this issue is delivered to me

7:34
first and then i overnight it to you

7:36
and then one of the best things i think

7:37
the annuity companies have done in the

7:39
new

7:40
industry as a whole is we have what's

7:42
called a free look

7:44
provision meaning that you can get your

7:46
money back

7:47
after the policies issued every state

7:49
has a different time frame

7:51
that you have to respond by to get your

7:54
money back and typically it's a 10 to 20

7:56
day or maybe 10 to 30 days depending on

7:58
your state

7:59
you can get your money back so i love

8:01
this because it

8:02
thinks sometimes things change in your

8:04
life or sometimes you just feel like

8:06
you know what i made this i don't want

8:07
to do that anymore that's fine we

8:08
respect that

8:10
we won't pester you we'll just say okay

8:12
and we'll facilitate that for you look

8:14
but understand

8:15
once you get the policy in hand the free

8:16
look time period the clock starts

8:18
running

8:18
another thing that we need to cover is

8:20
locking in contractually guaranteed

8:22
quotes so

8:23
when we go through the process and we're

8:25
on the phone and i send you quotes and

8:26
we're looking at the quote we're going

8:28
through the limitations and benefits of

8:29
it

8:30
and all the details that you have to

8:32
know to make a good decision

8:35
with most carriers they will allow you

8:37
to lock in that quote

8:39
and then we get the paperwork process

8:40
started but there are some that don't

8:42
there are some that will not lock in the

8:44
quote and we'll tell you who those are

8:46
if that's the carrier that you choose

8:48
but understand that that paperwork has

8:50
to be

8:51
into that carrier you know the

8:53
application has to be to them within

8:55
five to seven days we got to get rolling

8:57
once we lock it in you just can't lock

8:58
it in and think about it there there is

9:00
no lock in and let me let me think about

9:02
it

9:02
if you're locking in you're moving

9:04
forward but most of them do allow you to

9:06
lock in with immediate annuities for

9:08
income annuities qlikes etc now the

9:10
paperwork and the actual information

9:12
that's needed this is one that i really

9:14
want to make sure that you completely

9:16
understand

9:17
okay it's similar if you've ever opened

9:19
a bank account or a brokerage account

9:22
it is very similar to where they're

9:24
asking you questions about your

9:26
financial history your financial

9:27
information

9:28
all of it's confidential you know the

9:30
the

9:31
information we do not sell we do not

9:33
share but we

9:34
have to ask it by law they're general

9:37
industry

9:38
suitability questions now even before

9:41
you get on the call with

9:42
my administrative team you're going to

9:45
receive an email with a list of all of

9:47
that

9:48
information that you're going to need i

9:50
mean you're going to get it you're going

9:51
to know

9:51
up front now you have to answer

9:55
every single question if the carrier

9:57
wants to know it if it's part of the

9:58
application question

10:00
process you have to answer the question

10:02
there's no exceptions to that

10:04
so don't play games we're not asking any

10:07
additional questions stan the annuity

10:09
man the annuity man is not asking you

10:11
additional questions that we want to

10:13
know we're just going down the list of

10:15
the application that the carrier has

10:17
that they want to know

10:18
so we're not we're not being creative

10:20
we're just asking the questions

10:22
period and that's including breaking

10:24
down your assets and all of that stuff

10:27
again confidential and in this really

10:30
the reason for this number one is to

10:32
protect the consumer you have to

10:34
understand that

10:35
and they want to just make sure that you

10:37
have a healthy cushion of liquid assets

10:38
that you're not putting all your money

10:41
into an annuity now this happened this

10:43
all came about about 15 years ago

10:45
clients

10:46
were putting too much money into

10:47
annuities and then once they realized

10:49
that instead of saying i made a mistake

10:51
they sued

10:52
and then the state sued the carriers and

10:54
this is 15 years ago so about 15 years

10:56
ago

10:57
the carrier said okay we're tired of

10:59
getting sued

11:00
we're going to put in a suitability

11:03
questions in the application process

11:05
that will prevent that

11:07
and that's the reason it's there so

11:10
again we don't sell any information

11:12
etc we don't share it but you have to

11:15
answer it and it's

11:16
it's confidential we don't share it we

11:18
don't tell it

11:19
period but understand you just have to

11:22
be open with us just to make sure that

11:24
you're suitable for the

11:25
annuity you've chosen a couple other

11:27
things people always ask me about trust

11:29
can a trust own

11:30
an annuity yes but there's only one type

11:33
it's a revocable living trust that's the

11:35
only type that can own an annuity

11:37
and we're going to need a copy of that

11:38
trust

11:40
with the application another question i

11:42
get a lot is can companies corporations

11:44
llcs

11:45
own annuities some carriers will allow

11:48
it

11:49
some will not and if they do allow it

11:52
what you're doing if a company owns it

11:55
corporation llc

11:56
you're circumventing and giving up that

11:58
tax deferral

11:59
part so for instance if you go out of my

12:01
fixed rate annuity

12:03
you're going to pay taxes on that

12:04
interest every year it's not tax

12:05
deferred if

12:06
if it's a company corporation llc etc so

12:10
annuities are customizable the

12:12
information that we

12:13
gather is confidential but just be

12:15
upfront with us on how you want to

12:16
structure it we'll tell you if that

12:18
carrier can or cannot do that

12:20
you know we'll be brutally honest about

12:22
the whole thing so

12:23
understand too that all of the paperwork

12:27
processes that we're going to talk about

12:29
is a general overview of of of how it

12:31
works

12:32
you know obviously nothing is you know

12:34
don't don't call me up and say well you

12:36
said three to five days and it's taken

12:37
seven

12:38
you know come on now you know what i'm

12:40
trying to do here i'm trying to give you

12:42
a heads up

12:42
on how this whole thing works so that

12:45
you won't be surprised

12:46
and you'll understand how the process

12:48
works let's specifically talk about

12:50
time frames this is very important

12:52
because

12:53
going into an annuity purchase depending

12:56
on if you write a check

12:57
if you transfer it if it's coming from a

12:59
401k if it's

13:00
trust what are the time frames you know

13:03
what should i expect as a

13:04
as a client of yours stan the annuity

13:07
man

13:08
what's going to happen now understand

13:09
you're going to be in the loop the whole

13:11
way

13:11
getting email updates on where we're at

13:13
in the process but let's go through

13:14
all of it if you write a check with an

13:16
application

13:17
so you're writing a check it's a non-ira

13:20
non-qualified you're writing a check and

13:22
sending an application first of all the

13:23
check is made out to the annuity company

13:26
so once the application with the check

13:29
is received by the carrier

13:31
it takes three to five business days for

13:34
the carrier to

13:35
initially review that application for

13:37
suitability and approval once they

13:39
approve it

13:40
and they have the check in hand it takes

13:42
another two to three business days to

13:43
issue the policy

13:45
all right if it is a transfer and this

13:48
is ira to ira transfer

13:50
if it's you know any any transfers

13:54
that's going from one institution to the

13:55
other

13:57
once again non-taxable event for

13:59
qualified assets

14:01
once the paperwork is received by the

14:02
carrier it takes once again three to

14:05
five business days for them to review

14:07
your application

14:08
for suitability and then upon approval

14:12
the carrier sends a transfer request

14:15
to the institution where your money is

14:17
currently at

14:19
so if it's a brokerage a bank they're

14:21
going to send that transfer

14:22
request to the brokerage and bank

14:24
whoever that is once that institution

14:26
receives the transfer request from the

14:28
annuity company

14:29
it generally takes seven to ten business

14:32
days

14:33
for the funds to then come back to the

14:35
carrier

14:36
so the bank brokerage whoever receives

14:39
the request

14:40
seven to ten business days later the

14:41
money is sent and arrives at the annuity

14:44
company

14:44
that's a general time frame once the the

14:47
money arrives to the annuity company

14:50
it then takes another three to five days

14:53
for the carrier to issue the policy

14:55
okay now with the 401ks and 403 b's and

14:59
those type of thing when you're

15:00
transferring

15:01
assets from those types of plans

15:04
to an annuity of any type please

15:07
understand this

15:08
you will have to be involved with us you

15:10
will have to probably

15:12
not possibly probably most likely get on

15:15
the phone

15:16
with that administrator of that plan

15:20
and give them verbal instructions to

15:22
transfer it or nudge them to

15:23
to go faster no exceptions you're going

15:25
to have to be involved and sometimes

15:27
with ira transfers

15:29
we're going to have to get you involved

15:30
we'll tell you when but with 401ks and

15:33
43bs and all those type of plans

15:35
you will have to be involved understand

15:38
that and that's okay it's just part of

15:39
the process and actually

15:41
it's good because it's your money you

15:44
know you're the only one that can

15:45
control what happens to the money

15:48
right so you're gonna be the one that's

15:49
gonna call on behalf

15:51
of your money now transfers from one

15:54
annuity to another

15:56
the irs calls that in a non-ira setting

15:58
it's a 1035

16:00
transfer that 1035 refers to the irs

16:02
code 1035

16:03
if you're really bored and have no life

16:05
you can pull it up and read it but in

16:06
essence it says

16:07
if you're transferring from one annuity

16:09
to another

16:10
it's a non-taxable event does not

16:13
trigger taxes be very clear upon that

16:15
but as i said in the previous part of

16:17
the podcast

16:19
the annuity that you're transferring to

16:21
has to be mathematically better

16:23
and in your favor compared to the one

16:25
that you're transferring from and we

16:26
have to do a side-by-side comparison

16:28
showing you

16:29
that it is and the annuity company has

16:31
to see that

16:32
in writing before they accept and

16:34
approve it so

16:36
those type of transfers from one annuity

16:37
to another where it's an ira to ira if

16:40
you have an annuity inside of an ira

16:41
type

16:42
structure whether it's an ira or non-ira

16:44
if it's annuity to annuity it takes

16:46
three to five weeks

16:48
and again we might have to get you on

16:49
the phone to nudge them but we'll let

16:51
you know

16:52
when we think that you need to do that

16:54
now if it's a trust

16:56
it's going to add an additional two to

16:58
five days

16:59
to the process that's just all you need

17:01
to know it's just going to add a little

17:02
bit more time

17:03
because remember you're providing a copy

17:06
of the trust

17:07
with the application and the carriers

17:10
just want to make sure all the eyes are

17:11
dot and t's are crossed and you should

17:13
be happy with that so just add

17:15
another two to four days from all of the

17:17
other time frames i gave you

17:19
and all these timelines are general

17:20
outline of what happens

17:22
we will be in contact with you you will

17:25
not be sitting there

17:27
wondering where things are at we'll let

17:28
you know what's going on

17:30
via email throughout the whole process

17:32
and if we need to call you

17:34
we will but if we won't just call you

17:36
unless there needs to be something

17:38
specifically done on your part

17:40
now let's go to citizenship

17:42
qualifications

17:43
i get a lot of calls from people outside

17:45
the u.s

17:46
or people that have moved from the u.s

17:48
to another country

17:50
let's be very clear on what's acceptable

17:54
and what's legal you have to have a

17:57
valid

17:57
social security number okay a valid

18:01
social security number and be a us

18:02
resident in a state

18:04
no exceptions there's no gray area once

18:07
again you have to have a valid social

18:09
security number

18:10
and you have to be a u.s resident in a

18:13
specific

18:14
state and most states will allow you to

18:17
sign

18:18
paperwork outside of your state of

18:20
residence

18:21
most of them will but understand if you

18:23
do that

18:24
then the state that you're signing in

18:28
supersedes everything meaning that the

18:30
state that you're signing in

18:31
the application has to be the paperwork

18:34
for that state and the product you're

18:35
buying has to be approved in that state

18:38
so i'm talking to you vacation homers

18:40
out there and snowbirds and people like

18:42
that

18:43
but understand that not all states allow

18:46
that

18:47
not all do in fact this list is growing

18:50
but

18:50
let me give you as at the time of this

18:52
podcast

18:54
these are the states that do not allow

18:56
that and here they are

18:58
massachusetts minnesota new york

19:01
arkansas idaho mississippi

19:05
utah washington and wisconsin

19:09
they

19:22
and again this available as of today's

19:24
podcast date i'm assuming this is going

19:26
to

19:26
change and and we'll have to add to that

19:29
but as of right now

19:31
massachusetts minnesota new york

19:34
arkansas

19:34
idaho mississippi utah washington and

19:38
wisconsin

19:39
do not allow you to sign paperwork

19:43
outside of those resident states

19:45
so remember all fixed annuities are

19:47
regulated at the state

19:49
level so i see this trend kind of

19:52
growing a little bit

19:53
i'm assuming it's it's some tax revenue

19:56
play right

19:57
it always is all of those decisions seem

19:59
to be that

20:00
let's talk about quickly the state

20:01
residents coverage people always ask me

20:03
about fdic coverage for cds versus

20:07
state guarantee coverages for annuities

20:11
this is very important the state

20:13
guarantee funds

20:14
that whole thing that whole guarantee

20:17
and that whole

20:18
warm fuzzy blanket cannot be used in the

20:20
sales process

20:22
you can't use it as well you should buy

20:24
it because there's a state guarantee

20:25
fund

20:26
fdic is the best coverage on the planet

20:28
period it is what it is

20:31
state guarantee funds you you could go

20:33
to your specific state to see what those

20:34
limitations are per policy per owner

20:37
and that website is n-o-l-h-g-a

20:40
dot com so www anderson nancy o is an

20:43
oscar ellis and larry h's and harry g

20:45
and gary a is in apple n-o-l-h dot com

20:50
and you can find out what your state

20:51
guarantee fund limitations

20:53
are so the reason i bring it up

20:56
is not only because you shouldn't base

20:58
your decision on that at all you should

20:59
based on the claims paying ability of

21:01
the carrier that

21:02
you choose not the state guarantee fund

21:04
but

21:05
the state guarantee fund applies to

21:08
where you're living so for instance if

21:10
you

21:11
purchase the annuity in nebraska and you

21:14
now

21:15
live in florida then the state guarantee

21:17
your residency is in florida

21:20
you've changed residencies the residency

21:22
your current residency is where that

21:23
state guarantee applies

21:25
so you bought it in nebraska state

21:28
guarantee fund applied

21:29
based upon the state of nebraska rules

21:31
you moved to florida

21:32
now the state of florida coverage

21:34
applies at that because you're a

21:35
resident of the state

21:37
of florida so just understand that

21:39
anybody's trying to pitch you

21:40
some type of annuity and mentioning

21:42
state guarantee funds as part of the

21:43
bullet points

21:44
that's illegal buy annuities what they

21:47
will do not what they might do and buy

21:48
annuities

21:50
based on the claims paying ability of

21:52
the carrier that you

21:53
choose now once again just kind of to

21:56
close

21:57
we're going to keep you updated on the

21:59
process via email from start to finish

22:01
very transparent and you can always pick

22:03
up the phone and call us you know that

22:05
you can always just pick up and call us

22:07
on the 800 number or

22:09
set an appointment to talk to us we're

22:11
always available to you

22:13
and if we need you to get involved

22:15
during the process to either speed it up

22:17
or

22:17
you know for the 401ks and the 43bs and

22:20
those type of things that you have to be

22:22
we will let you know but the only thing

22:24
i'm going to ask

22:25
if you decide to do business with us is

22:28
have an open line of communication

22:30
be very honest and transparent just like

22:32
we're going to be

22:33
during the process and i think you'll

22:35
like the contractual guarantee that you

22:37
get

22:37
but in essence that's how the process

22:40
works

22:41
i know there's been a lot of information

22:42
you can always go back and listen to

22:45
you know the podcast replays just to you

22:47
know get all the nuggets that i threw at

22:49
you

22:50
but i think this is a good foundation

22:52
for you to understand how the process

22:53
works and we look forward to hopefully

22:56
working with you in the future

22:57
and hopefully you becoming a client i

23:00
thank you for listening

23:01
my name is stan the annuity man and

23:02
you've been listening to

23:04
fun with annuity see you next time

23:07
thanks for listening to fun with

23:09
annuities please hit the subscribe

23:11
button and make sure to go to my site

23:13
at the annuityman.com where you can run

23:16
your own spea dia

23:17
and culat quotes and see a live feed of

23:20
the best

23:21
mega fix rates in the country and even

23:23
get

23:24
indexed and income rider quotes as well

23:26
you can also

23:27
sign up for my six annuity owner's

23:29
manual books and i'll ship them for free

23:32
and under no

23:32
obligation i also encourage you to

23:35
schedule a

23:36
one-on-one call with me stan the annuity

23:38
man so we can have a full discussion

23:41
of your specific situation it will be

23:43
the best

23:44
brutally factual and truthful advice you

23:47
will ever get and that's one guarantee

23:49
you should definitely take advantage of

23:51
so join me next time for the number one

23:53
annuity podcast

23:55
on the planet fun with annuities

24:08
you