How To Buy An Annuity With These 5 Transaction Steps


Many investors wonder about the exact process of buying an annuity. This article goes in details as of the process you have to go through prior to sign your annuity contract. You may also read more about who can sell annuities or how an annuity contract looks like.


step 1

The very first step to buy an annuity is to buy with an agent or broker who will discuss your financial need. In an ideal world, the agent or broker will gather your personal information and build with you a retirement plan. The point is to help you through graphics and different scenario to choose the best product for you.


You can expect at least two meetings with your broker. The first meeting will happen to collect the information about your personal situation. An annuity is not something you buy in a heartbeat and should be part of a sound process. The second meeting will happen when the agent has run different scenarios and will offer you the proper annuity combination for your retirement needs.

step 2

Once you are comfortable with the concept of the annuity and you have selected the right product for your needs, you will complete an annuity application with your broker. At this stage, you sign to receive an annuity contract. It doesn’t mean that you need to buy it.


The annuity application is sent by the agent to the contract issuer for approval. This is often a Life Insurance Company who will analyze your information and offer you a contract.

 step 3

Once you have completed and sign your annuity application, the broker sends it for approval. The Life Insurance Company may take a few days or a few weeks to analyze your application. Since the amount of the annuity will be based considering your life expectancy, further examination may apply. This is where it could take a few weeks for the contract issuer to generate the annuity contract.

 step 4

Once everything is approved, your agent or broker will meet with you again to present the annuity contract. At this stage, if you still want the annuity, you will issue your check and enter in the contract.


This is the moment where the contract between the investor and the Life Insurance Company is valid. However, you still have 10 to 30 days to reconsider your choice and cancel the annuity contract. If it’s the case, you simply have to send the contract back to the issuer and reclaim a refund.

 step 5

At this stage, you have paid for the annuity and you are now the owner of the contract. It is recommended you keep your contract in a safe place. A safe-deposit box at the ban or with your will and other important paperwork in a lawyer office are mostly recommended. It doesn’t prevent you to keep it under your bed though!


If you are ready to start Step #1 and wish to speak with a broker but don’t have any, you can speak with an advisor for free here.