Funding your annuity
Payment options, typical timelines, rate locks, and what to expect after you move money to the insurance company.
Most shoppers can use one or several funding sources in the same application (for example, part personal check and part IRA rollover). Using multiple sources often adds calendar time, because each institution releases money on its own schedule.
Below is a concise breakdown of each common option, what usually happens after you commit, and practical tips while your application is in motion.
Funding options
1. Check
(Mailing or courier typically required.)
Paying by check means the insurer receives a physical payment, usually after you ship it with a trackable carrier.
How it works
- During your application, you will be told where to send the check and how to label it. Many carriers use FedEx: you can print a prepaid label, bring your check to any FedEx location (they will supply an envelope), or schedule a pickup—request an envelope at pickup if you need one.
- The carrier deposits the check after receipt; issuance generally follows once all other requirements are satisfied and funds clear.
Processing time: often about 2–10 business days after you mail it, depending on mail time and carrier intake.
2. ACH transfer / EFT (checking or savings)
ACH is an electronic debit from the bank account you authorize on the application.
How it works
- You enter account and routing details securely as part of the signed paperwork or carrier portal flow.
- After the application is complete and accepted for processing, the insurer initiates a withdrawal for the premium amount you specified.
Processing time: commonly 1–5 business days after the application is in good order and the carrier is cleared to pull funds.
3. Wire transfer
A wire sends money bank-to-bank, straight to the carrier’s account.
How it works
- After signing, you receive wire instructions from the carrier (or from us on the carrier’s behalf).
- You contact your bank—in branch, by phone, or through online banking—and authorize the outgoing wire using those instructions.
Processing time: often the same business day when initiated early enough for both banks’ cutoffs.
4. Annuity exchange (1035)
A Section 1035 exchange moves cash value from an existing annuity or life insurance policy into a new annuity without triggering a taxable event at the transfer, when done correctly as a direct exchange between companies.
How it works
- You complete carrier-specific transfer and replacement paperwork for each contract you are exchanging.
- The new carrier coordinates with the old carrier to move funds directly; you should not take possession of the money if you intend to preserve tax treatment.
Processing time: commonly about 4–5 weeks, heavily dependent on the surrendering company’s workflow.
5. Transfer of qualified funds (IRA, 401(k), etc.) and non-qualified brokerage assets
This bucket covers rollovers and transfers from retirement plans, IRAs, and many taxable brokerage accounts into an annuity contract the carrier will hold.
How it works
- Transfer forms are completed as part of the application package.
- The insurer (not you, when done correctly) works with your current custodian or broker-dealer to move assets or liquidate and remit premium, per the instructions on the forms.
Processing time: again often roughly 4–5 weeks, depending on the sending firm and whether plan-level approval is required.
Processing times are estimates. They vary by insurer, funding path, and how quickly your bank or prior institution responds.
Things to know
Rate lock period
For multi-year guaranteed annuities (MYGAs) and many fixed indexed annuities, the quoted rate is usually locked once your final application is signed and submitted to the insurer. The lock window depends on funding type: cash-style funding (check, wire, ACH) often carries a shorter window, on the order of about 7–10 days, while exchange and custodial transfers often receive roughly 45–60 days—but always read your carrier’s disclosure; it controls.
For income annuities, quote locks are typically shorter—often on the order of about 7–14 days—because longevity and mortality assumptions refresh quickly.
Status updates
Most carriers email (or portal-notify) you as the case advances: submitted, signed, funded, and issued. We can help interpret those messages, but the insurer’s operations team is the system of record.
Tracking your progress
Keep copies of everything you sign, tracking numbers for checks or overnight packages, and confirmation numbers for wires. If your carrier offers an online policyholder or application portal, that is usually the fastest place to see whether money has been applied to your case.
Compare your options
| Source | How it works | Processing time | Tips |
|---|---|---|---|
| Check | Mail or courier a paper check to the carrier using their instructions (often with a prepaid label). | ~2–10 business days | Ship early so funds arrive inside the rate lock. |
| ACH / EFT | Authorize a bank debit on the application; the carrier pulls premium after the case is in good order. | ~1–5 business days | Watch daily or per-transaction ACH caps at your bank. |
| Wire | You initiate at your bank using instructions the carrier provides after signing. | Often same business day | Fastest cash path for many people; confirm wire fees first. |
| 1035 exchange | Old insurer sends contract proceeds directly to the new insurer after verifying forms. | ~4–5 weeks | Triple-check policy numbers and legal name spelling to avoid rejections. |
| Qualified / brokerage transfer | Custodian-to-carrier paperwork; assets move or liquidate per your elections. | ~4–5 weeks | 401(a)/401(k)/403(b)/457(b) cases may need plan signatures—start early. |
Frequently asked questions
1 Does GetSure or the insurer move my money automatically when I finish the application?
No. Transfers, wires, ACH debits, and carrier-to-custodian movements generally happen only after your paperwork is signed, any required suitability or replacement reviews are complete, and the insurer accepts the case for underwriting and funding. Until then, nothing should leave your account except what you intentionally initiate (for example, a wire you place at your bank after receiving instructions).
2 What is the difference between ACH, wire, and check?
All three can move money from the banking system to the insurer, but the rails differ:
- ACH / EFT: Electronic network debit; convenient for many retail premium amounts; timing is usually a few business days.
- Wire: Same-day bank messaging in many cases; typically the fastest funded path; banks may charge a fee.
- Check: Physical item; dependable but slower because of mail and deposit clearing.
3 What if my premium comes from more than one account?
You can usually split premium across methods (for example, partial wire and partial IRA transfer). Each leg is processed independently, and many carriers will not issue the contract until all committed premium has been received and matched to your application.
4 Can I change how I fund after I submit?
Sometimes. If the carrier has not yet finalized your signed application or begun irreversible money movement, an amendment may be possible. Once processing deepens, changes may be disallowed or may require a new illustration. Tell us or the carrier as soon as your plans change so we can see what is still open.
5 What should I expect for taxes on a fixed annuity?
This is general education, not tax advice—confirm with your CPA or tax attorney.
Qualified money (Traditional IRA, many 401(k) balances rolled in, etc.) generally continues tax-deferred growth inside the annuity, similar to other qualified accounts. Distributions later are usually taxed as ordinary income. Required minimum distributions (RMDs) may apply from age 73 under current IRS rules for tax-deferred retirement money.
Non-qualified money (after-tax dollars) also grows tax-deferred inside the contract during the accumulation phase. When you take money out, you are typically taxed on the earnings portion first, at ordinary income rates, while your contributions are returned as a tax-free recovery of basis until basis is exhausted.
Withdrawals before age 59½ may trigger a 10% federal penalty on the taxable portion of many non-qualified annuity distributions, with limited exceptions. Surrender charges and market-value adjustments from the carrier are separate from tax—they come from the contract.
A proper 1035 exchange from one annuity to another can continue tax deferral on any untaxed gain inside the old contract if the funds move directly between insurers.
6 What should I expect for taxes on an income annuity?
Again, this is general—not personal tax advice.
Qualified income annuities are purchased with pre-tax retirement money in many designs. Once income starts, payments are commonly taxed as ordinary income, and RMD rules may still matter depending on product structure. QLACs are a special case that can defer RMD measurement on the portion of assets used to buy them, within IRS limits.
Non-qualified income annuities use after-tax premium. Each payment is often split into a tax-free return of basis and a taxable income portion using an exclusion ratio the carrier calculates at issue. After the entire basis has been recovered through payments, remaining payments may be fully taxable as ordinary income.
Death benefits and refund features have their own tax character—generally mirroring the same basis-versus-gain logic—which beneficiaries should review with a professional.