Download the Annuity Funding Cheat Sheet


There are a ton of different ways that your clients can fund an annuity. Whether the money is coming from an investment firm, the bank, a 401 (k) or IRA, or another insurance company, you can transfer it into an annuity.

However, the way the money is transferred into the annuity is extremely important! A simple mistake can cause a massive taxable event, so use this handy cheat sheet to make sure you're funding the annuity properly.

Learn From My Annuity Transfer Mistake

Michael Sams here! I want to share a mistake I made a number of years ago so that you can learn from it and use this cheat sheet to make your life easier!

I tried to do a transfer with a client named Mr. Wallas. Legally, the company that holds the money has a certain amount of time that they can hang on to that money before they're required to transfer it. The company was dragging their feet big time, and they wanted the client to jump through all these hoops to do the transfer.

So, to speed things up, we had the client take out the money himself in order to complete the transfer. Well, this was the problem – the company made the check out to Mr. Wallas – not the new financial institution. So, even though we rolled that money into another financial institution immediately, it was technically a withdrawal, and Mr. Wallas was taxed on the entire amount.

Everything that we did was fine, but the issue occurred when the bank made the check out to Mr. Wallas, not the insurance company. 

He wasn’t happy.

So – please make sure that the the check is never made out to the client – make sure that it's made out to the insurance company. Never have a client make a personal withdrawal from their retirement account. Otherwise, they'll be taxed on the amount, which can be avoided. 

New to annuity sales?

Annuity sales are a huge opportunity for independent agents in the senior market. If you want to learn how to sell annuities to seniors, you've come to the right place!

Check out our complete guide here: The Ultimate Guide to Selling Annuities In the Senior Market