Episode Transcript
[00:00:00] Speaker A: Hello and welcome, everybody, to the Annuity Straight Talk podcast, episode number 174. My name is Brian Anderson, founder and creator of AnnuityStraightTalk.com I have the pleasure of welcoming a very special guest today. Some of you know her, everyone should.
And we're going to cover a topic that she's deeply involved with, and it's something I've covered in the past, but people still ask the questions. It's very simple, technical stuff anyway, from the middle of Montana somewhere. We don't give out personal information.
My dear assistant, Leandra Hill. Say hi to everybody.
[00:00:34] Speaker B: Hi, everybody.
[00:00:35] Speaker A: Okay. And Leander, just tell everybody real quick what you're doing here, what your purpose is and how you're here to help.
[00:00:41] Speaker B: Basically, I am trying to be your right hand for everybody who's listening. I am answering the admin emails. So when you email in also you. You can call me if you need to. But mostly it's if Brian's not available.
[00:00:56] Speaker A: Yeah, and that's one of the big things is like, we're getting busy enough and I do actually have times when I'm gone. You guys have a point of service to ask questions. After you get a contract issued, you become a client. Then it's address changes, beneficiary changes, withdrawals, things like that. Just the technical stuff that we deal with. Going from time to time, I'm usually always here. We're really trying to get everybody to copy Leandra on all the emails. So we'll continue to work on that as well, won't we?
[00:01:21] Speaker B: Yes. And also I try to help make sure we have all the information for filling out applications, getting them submitted, the whole process of the application to issue of contract.
[00:01:33] Speaker A: Yes. So if you hear from her, it's. You're essentially hearing from me. What I'm going to do is I'm going to share my screen. Leander, we're going to go through this. Talked about this last year. You don't know, Lander, this was before you started. We did this whole page about fixed index annuities and a lot of just regular annuities. It applies to just information about it. We're going to talk about how to buy one and what the process is for as far as who owns the contract, how you get the money there. Everybody comes in when they're really interested. Hey, we got a plan. Let's do this. Everybody asks the question. So I'm going to go through the table of contents and I'll go through this newsletter. It's actually not a newsletter. It's this big part of the website that's got, I think it's the best source for index annuity information that you can find. But here it is all you need to know to buy an annuity. I've got the table of contents and I'm going to try to leander just go through this and I'll ask you. And the number one is ownership of the contract is very important. Can you explain to people how that works? And look, go ahead. There's a visual aid here. When we talk about who owns a contract, that's pretty simple, isn't it?
[00:02:40] Speaker B: Absolutely. And the way that I always look at it is who owns it, where is it, where is the money now and and how is it titled? Because it needs to be like for like if we're moving money over or if it's new money and it's non qualified then of course it can change. So it, or it can be however you want it. But most of the time as you can see it doesn't require a lot of thought or research and you've got some easy ways to figure out how you would like the ownership to go.
[00:03:08] Speaker A: Yeah, and that's a good point because if you write a check to buy an annuity, the ownership of the annuity has to match the ownership of the checking account. Simple as that. And if it's a transfer that's coming from if you've got a middle initial on the account at say Schwab, but you don't put a middle initial on the transfer form, then they might reject it, correct?
[00:03:25] Speaker B: Yes, it really does depend. So sometimes they are fine with it, sometimes they reject it. So I always prefer to have a copy of the statement where it's coming from or at least know, have some kind of communication of what does it look like where it's at right now.
[00:03:41] Speaker A: Yep. And so I want to look at just technically speaking a non qualified contract which is after tax money. This is cash. You talk about ownership, it can be single ownership, spousal, primary beneficiary or a joint ownership. And we don't need to talk about beneficiaries or inheritance, that's another one that I could redo just to get the information back up front. But non qualified can be single joint, a corporation can own it, a charity, there could be a trust that owns it. It all depends on what you need it to do. And then if you go to qualified contracts, that's an IRA or 401k, it's going to be titled as an IRA at the insurance company. So if it's from 401k to IRA, it's a rollover. If it's another IRA, it's just a transfer. That's a technicality. That doesn't really matter. But it can only be owned by one individual. So if it's Mr. Smith's IRA, Mr. Smith is the owner. Mrs. Smith would be the primary beneficiary. A lot of people hang up on say, oh, but I want a joint contract. It can't be a joint contract if it's qualified IRA, Roth, 401k, anything like that makes sense.
[00:04:47] Speaker B: Yep, that's exactly right.
[00:04:50] Speaker A: And if we're doing, and if we're doing like a joint life income deal with a qualified contract, then it's contract owner is the owner, spouse is primary beneficiary.
So that's how it works. And a lot of people give me pushback on that. That's not what this guy said. He said, yeah, I don't care.
[00:05:08] Speaker B: Yep. And to reiterate, you can have a single owner on qualified money and choose a joint income stream.
Single owner.
[00:05:19] Speaker A: And so this is how it works. Okay, so non qualified after tax, there are three ways to purchase the annuity. So we do the application, most of it, almost all of them are done online. Right, Leandra? So we just send you a electronic request. Okay.
[00:05:34] Speaker B: Yep.
[00:05:35] Speaker A: We've got a handy dandy intake system now where you just jump onto a link and type in all your information. It's fully encrypted, 100 safe.
So that's been helpful, has it not?
[00:05:47] Speaker B: Oh yeah, it's made a world of difference, I think. There's only one company out there that is not doing the online apps and we prefer the online application.
[00:05:57] Speaker A: It makes it cleaner. And we don't need to send you a 60 page document with stickers on it that fall off in the UPS envelope and all that. Okay. So after the application's done, they review it for suitability. The insurance company says, yeah, this looks like a good deal. They won't take it otherwise. There's three ways to do it. You can write a check. Okay, so this is probably one of the more popular ones. People are starting to get away from it. But you write a check for the premium amount to the insurance company, put the contract number in the memo line, and I usually provide UPS envelope. You can even add a cover letter. Just quick instructions. Hey, this money's meant to fund policy.
1, 2, 3, 4, 5, 6. Okay. Yep, pretty simple. Now some people, not everybody has physical checks these days. You can also send a wire Transfer from a bank or a brokerage company. It might cost you a little bit extra money, but it's quick. It happens within 24 hours. And a lot of times sending large amounts of money. If it's a check, I use UPS overnight. Some people like to use FedEx. But the wire transfers systematic. And so Leander, what happens if they want to send a wire? Then you're going to call the company and get all the information for them, right?
[00:07:10] Speaker B: Yep. And then I'll send a PDF with the details. Some companies also allow an ACH direct electronic transfer. It'll be on the same form usually if that company allows that. And then you can actually take that PDF to, to the bank or your institution, financial institution with you. And then. And I'll get you the pending contract number so you'll have all the information and we'll be here if you have any questions during the process.
[00:07:40] Speaker A: And some people are real comfortable with that, others aren't. It doesn't matter. It's not to tell. You got to do it one way or the other. I know a lot of people we work with Leander. I think they can just do it over the phone and call the bank and say, hey, wire it over here, right?
[00:07:52] Speaker B: Yep. And they just need the information and quick.
[00:07:55] Speaker A: Understand like we're going to talk about brokerage accounts that aren't IRAs. A lot of people have those. You can do a transfer form and just have the brokerage company just send it to the insurance company as well. But you got to remember that the money has to be in a money market fund. So the transfer form itself will not instruct the brokerage company to sell securities. You got to do that separately.
[00:08:18] Speaker B: I think that's a really important point for, for me too. That was one of my learning curves, was not understanding to we have to have that money into a money market or a cash account at the brokerage firm before the transfer form gets there. Before the transfer form gets there.
[00:08:36] Speaker A: Or that we have to do it or we have to do it twice.
[00:08:37] Speaker B: Or we have to do it twice, which does happen.
[00:08:40] Speaker A: And guess who looks bad when that happens? Leandra.
[00:08:43] Speaker B: I think it's me. I don't know.
[00:08:46] Speaker A: No, it's me. It's. Nobody blames you for anything. It's maybe a little bit. I'll never throw you under the bus. Okay. Okay. So buying an annuity with qualified funds. So pre tax retirement accounts. It's also applicable to Roth IRAs. Those are not currently taxable, but still registered. These assets are not under control. It takes Cooperation of the current brokerage company or custodians. Call it Fidelity. Schwab. TD Ameritrade is Schwab. Edward Jones, Merrill Lynch. Merrill lynch is tough to deal with, I think. So most of them operate the same. Several require additional steps. So one thing you have to do is like, it's just like the above. If it's a brokerage account, we're going to do a transfer form as part of the application. We just need the account number and the name of the custodian. So account number is 1, 2, 3, 4, 5. And the custodian is Fidelity. Okay. So every resigning company is differently. And we look at this beginning. But some of them will take the E signature, some will take DocuSign. Others require a physical signature on the transfer form. And so we basically just UPS that to you. You put your signature on it and it includes a UPS label and an envelope and you send it on to the insurance company. We don't handle the money, do we ever?
[00:09:57] Speaker B: No. Nope. It goes directly from your brokerage or advisor account, the money market, and then it goes directly to the insurance company. Yep.
[00:10:08] Speaker A: So one thing that you need to understand a lot of times, like a tsp, like Thrift Savings Plan with the federal government, and there's other ones that will have an internal form. Right. Leandra. Like they. It's like, it's good to call the custodian. Say, is there anything else? Will you accept this transfer? Because they might require you to fill out some internal paperwork, which if you don't know that ahead of time, is just really going to delay the process.
[00:10:32] Speaker B: Yes. And I think it's important for you to understand that company usually will not talk to Brian or myself. We could be on the line helping. But really you should be contacting that company yourself to find out if they have other forms or if you have to do anything before the transfer form shows up.
[00:10:53] Speaker A: Exactly. So it's just. It's a one phone call after you do the paperwork and the intake form, while we're doing the application, just call them real quick. And. And Leander. We also know which companies, if it's somebody we don't deal with a whole lot. That's when it's. If it's Schwab or Fidelity or somebody that we use very frequently, we're going to. We're going to know whether you got to do anything else.
[00:11:12] Speaker B: Yes.
[00:11:14] Speaker A: And realize that a lot of these brokerage companies, if they do have to send you additional requirements, they're going to do it in snail mail. So it could take a while. I learned about TSP the hard way, like 15 years ago where nothing happened. And three weeks later they get a letter in the mail saying you have to do an extra form with us. So you got a TSP then. We already know that, right?
[00:11:35] Speaker B: Yes.
[00:11:35] Speaker A: Sending money. I believe that large sums of money should be treated with respect and tracked closely. Wire transfers or overnight shipping seem the most professional to me, but I don't make the rules. I do provide UPS shipping anytime you need it. I'll send you a label. But the wire transfer might be your responsibility. And you got to understand we. I had one check lost about a year and a half ago and it was. Fidelity lost it and they were, they were good. They stopped payment, reissued. It was a big check. So it showed up about two weeks later, asked the guys like, hey, can you write void on that and send it to me because I want to like frame it. And he said, no, I think I want to frame it. Okay, yeah. Anything else that you think needs to be said Leandra?
[00:12:15] Speaker B: No, not at the moment, but I'm sure we'll come up with something. I think the most important part is that if you have any doubt, feel free to email Brian and I'll let you know where we are in the process. I have the UPS tracking number, so if we have sent a label or anything, I'll know where it's at. And it. Every step does take a little time, but my job is to make sure it goes as quickly as possible and.
[00:12:41] Speaker A: For the most part we get it done. An IRA transfer from the date applications taken is usually done within about two weeks. Is that fair?
[00:12:50] Speaker B: And yeah, I think you told me the fastest anything has ever been approved and issued is what, an hour and a half?
[00:12:58] Speaker A: No, I did one in 12 minutes last year. It was with. And some. And you can speak to this. There's some companies, insurance companies that are really good at being efficient and others that aren't.
[00:13:09] Speaker B: Yes.
[00:13:10] Speaker A: And so everybody said, oh, you like Midland National? Leander will tell you why she likes Midland National.
[00:13:15] Speaker B: Yep, they're amazing in service in the whole process. And it is. The whole thing is electronic and they can do an achievement accessing the funds so they can get the electronic submission, approve the suitability and receive the money within the hour.
[00:13:33] Speaker A: So that's what. Yeah, so it was a non qualified contract and the lady filled out an ACH bank draft form with it to have the money just taken from her bank account. I submitted the application, everything was clean and nine minutes later I got an email saying the contract had been issued. So I called her back real quick. I said, is your checking account light by a couple hundred grand? She's like, I haven't looked at it. And she wouldn't look. She's like, oh my goodness, it's gone. I'm like, yep, you got a contract. And so the next morning she was able to log on to Midland.com and and see that the 200,000 was now in that new account. So just one, just from one account to the other, that's all it is, right?
[00:14:11] Speaker B: Yep. Those are my favorite. And Midland is absolutely incredible. And I love.
[00:14:16] Speaker A: I don't mind, I don't mind if it takes two days. It doesn't have to be done in 10 minutes.
[00:14:20] Speaker B: And they're not all like that. And there are also other good companies where they. It takes longer but Midland has it down for sure.
[00:14:27] Speaker A: We just had one with TIA craft that took about 45 days. Something weird. Yeah, yeah. So anyway, but this is just an idea. Like you guys might think it seems complicated but it's not because there's just one of those little things in however you're going to do it. It's a 10 second explanation of how it works.
[00:14:44] Speaker B: Yep.
[00:14:45] Speaker A: Okay, cool. Leander, thanks so much for doing this and welcome. Welcome to the family. Everybody feel free to say hi to her. I'm not going to give out the email address publicly just because then we get spammers and people sending you all sorts of garbage. Yeah, I tried to scrub it from the website just because people were paying in it and get giving me. I don't know. Anyhow, if you want to make an appointment with me or. And you can even request that Leander be on the call, just write that in the meeting notes. Top right corner of any page on annuitystraighttalk.com been episode 174 the past year. Leander has been fun. We're getting way better at this and we're ready to take care of people. Make sure that you get a professional treatment for anything you need in retirement. Again, thanks for joining us. We'll have Leandra back on something else. I'm sure when she has a good idea or she says I want to do it.
She's a star studded background as a top level a list actress. We'll talk about that some other time. Okay?
[00:15:39] Speaker B: Okay.
[00:15:40] Speaker A: And can you believe she actually. She acts shy when she's doing this.
[00:15:44] Speaker B: When you're performing you have a Persona and this is.
[00:15:47] Speaker A: Oh yeah, I was going to tell you. We could have done the Southern Leandra. We could. Done. Irish Leandra.
All right, well, like I said, I always wanted to have you on the podcast maybe two minutes at a pop, just to say, hey, this is what she's thinking about doing right now, how she's helping people. But great to have you. Thanks for joining us this week, guys. We'll be back next week with episode 175. You all have a great day. Okay, bye.
