Single Premium Immediate Annuity Procedure Manual

Transcription

1 Single Premium Immediate Annuity Procedure Manual Page 1 of 10

2 GCU Option B Single Premium Immediate Annuities For many retirees, a major fear is out-living their savings. Whether annuitizing an existing GCU annuity or dealing with a client who has a lump sum, the GCU Option B can provide an income stream for them. GCU Option B Annuities can be settled in a number of ways: Lifetime Income Lifetime Income with Period Certain Joint and Survivor Lifetime Income Period Certain Amount Certain Your GCU Home Office will be able to work with you to determine the client s monthly income based on the Settlement Option chosen, the client s date of birth, sex, and amount of deposit. Or, we can tell you how much deposit would be required to provide a specific monthly benefit. Monthly income amounts for Single Life, Lifetime Income, and Fixed Period certain cases can be obtained by calling our Home Office and speaking with any of our Call Center Representatives. By , please send your requests to SLuster@gcuusa.com, and cc TDowlin@gcuusa.com. Cases involving a Joint and Survivor Life Income option must go to our actuaries for calculation, and you should those requests, along with all pertinent information regarding the case to the addresses listed above. Existing GCU Deferred Annuities do NOT require a SPIA application to annuitize the contract. In those cases, only an Election of Settlement Option Form would be required. Clients may open a SPIA with the proceeds from another deferred annuity currently held by another company, and either 1035 or Transfer the funds to GCU. However, an existing SPIA with another company may NOT be 1035 d or Transferred to a GCU SPIA. Page 2 of 10

3 SPIA Annuity Application (Form ImmAnu-2010) To be used for Option B, Single Premium Immediate Annuities Only All of these contracts require: 1. Immediate Annuity Application (Form ImmAnu-2010) 2. Agent s Report 3. Agent s Interrogatory 4. Election of Settlement Option Form 5. W-4P 6. Authorization for Direct Deposit 7. Replacement forms (if replacing an existing contract with another insurance company) On the Application: Front Page Is the Proposed Annuitant a member of the GCU? We do NOT have a separate application for membership, nor are there any annual membership fees. If your client is NOT currently a GCU member, just check No. We will assign them to their appropriate lodge when we receive the application. 1. Full Name of Proposed Annuitant/Co-Annuitant a. Must be a person i. Unlike GCU Deferred Annuities, the Option B, Single Premium Immediate Annuity MAY have co-annuitants. A Co-Annuitant would only apply if the settlement option was for a Joint and Survivor Life Income Option. ii. Keep in mind that you CAN have Co-owners. SEE ASSIGNMENT OF CERTIFICATE. 1. A sole annuitant can assign ownership. Keep in mind that the owner of the contract is responsible for the tax ramifications of the distributions. 2. Co-Annuitants on a Joint and Survivor Life Income Option are coowners by default. a. It s EXTREMELY important, in these cases, that the beneficiary NOT be one of the co-annuitants. Page 3 of 10

4 2. Beneficiaries a. In the case of a Joint and Survivor Life Option, be sure to name someone other than the co-annuitants as a beneficiary. b. Primary beneficiaries: every attempt should be made to get their full, legal name, address, phone and SSN c. Beneficiaries under the age of 18 may not receive the proceeds of a contract until they become of age. If it occurs, GCU will hold the funds in our St. Nicholas Trust, until they turn 18. d. IMPORTANT: If a Trust is named as a beneficiary, a copy of the trust MUST accompany the application. 3. Replacement Questions a. If yes, all appropriate replacement forms MUST be completed. b. When applicable c. Partial 1035 s, etc. Be aware of the potential tax ramifications involved in a partial 1035 should the annuitant wish to begin taking withdrawals. 4. Item 5: Single Premium Immediate Annuity a. Amount Paid with application. Write in one of the following: i. Amount of check(s) being sent with the application. ii. 1035, if the funds are being sent from another non-qualified annuity. iii. Transfer, if the funds are being sent from a qualified account. b. Select whether this will be a One Life or Joint and Survivor case. c. Benefits to be paid: i. Life 1. Life - No refund 2. Life - Period Certain ii. Period Certain 1. Account balance is zero at the end of the period. iii. Amount Certain 1. A fixed amount for x number of years. Be aware that we will compute a figure as close to the one that the client wants that results in a payout over a number of years. For example, if the client s request would result in 21 months of payments, we will Page 4 of 10

5 lower the monthly amount and provide a 24 month (2 year) payout. d. Guaranteed period: years. i. If Life Income Option or straight Period Certain. e. Qualified Annuity Plan i. Where applicable, check the appropriate box. ii. Traditional IRA s require a signed Traditional IRA disclosure form. SEE TRADITIONAL IRA DISCLOSURE. iii. Roth IRA s also require a special disclosure form to be signed by the annuitant. SEE ROTH IRA DISCLOSURE. On the Application: Back/Second Page Dated at: The city and state where you are completing the application. Agent Signature Agent to LEGIBLY print their name License number: At this time, only required for Florida agents GCU Agent number: You will be assigned an agent number to be used on all of your GCU applications and correspondence upon submission of your first contract application. It is essential that you write this number on all applications and correspondence. We can provide your number to you if you ve forgotten it. Please Tom Dowlin if you need us to send you your GCU agent number. TDowlin@gcuusa.com. Page 5 of 10

6 Agent s Report You will need to complete all of the 6 questions, date and sign the form. The Conditional Receipt may be given to the client if you are taking cash with the application Agent s Interrogatory Complete the 3 questions, agent information, date and sign the form. Page 6 of 10

7 Election of Settlement Option This form is required for: 1. Option A Accounts 2. Opening a Single Premium Immediate Annuity 3. Annuitizing an existing GCU deferred annuity Write in the insured/annuitant s name. The payee for the payments provided by the option elected shall be: 1. Annuitant and owner are the same: write in the annuitant s name. 2. If the ownership has been assigned (See Assignment of Certificate), you ll write in the new owner s name. 3. If it s a husband/wife that own the contract, you ll write in both names and elect either and or or. a. Should a check ever need to be issued, and means both would have to endorse the check. Or, allows for one signature. OPTION A: 1. You will complete section 1, Interest Income. a. Amount to be applied = their deposit. (See Option A minimum and maximum deposits). b. Next you will select the frequency of their interest distributions. Once they elect a distribution mode, it may not be changed until the next contract year. c. Rate of interest: Our current new issue rates for Option A accounts. d. Beneficiaries: DO NOT write same as on Application. You MUST complete the beneficiary section. e. Client signs, and includes SSN, DOB, Phone, and date. For Single Premium Immediate Annuities (SPIA): 1. Which section (II. Or III.) will depend on the type of settlement that your client is looking for: a. Period Certain b. Amount Certain c. Life Income 2. Your GCU Home Office will be able to get these figures for you based on your client s gender and D.O.B., and we can help you complete the form. Page 7 of 10

8 Direct Deposit Authorization A safer, more convenient way of getting your client s regular distributions to them! GCU mandates that ALL SPIA accounts agree to direct deposit of their interest, systematic withdrawal, or settlement amounts on SPIA accounts, regardless of whether they are requesting monthly, quarterly, semi, or annual distributions. On all other annuities (where withdrawals are permitted) clients may elect to have systematic withdrawals on an Interest Only or Stated Amount basis. In all of these cases, whether the client wants monthly, quarterly, semi, or annual systematic distributions, they MUST complete a direct deposit authorization along with the Request for Systematic Withdrawals form. Checks will NOT be issued for systematic withdrawals or Option A interest distributions. Page 8 of 10

9 Replacement of Existing Annuity and Life Contracts GCU Replacement Form REPL-2-09 Any time you are replacing an existing Life Insurance or Annuity contract with a new contract, you must complete the appropriate Replacement Forms. At this time, GCU does NOT require Replacement Forms on any internal 1035 of a GCU contract moving to another GCU contract. However, given the current regulatory environment, we see this potentially changing at some point down the road. It is extremely important from a regulatory standpoint that an agent have a thorough understanding of whether or not replacement of an existing contract is happening. This would include, but not be limited to, understanding: 1. If the client is considering discontinuing making premium payments, surrendering, forfeiting, assigning to the insurer, or otherwise terminating an existing policy or contract. 2. If the client is considering using funds from an existing policy(s) or contract(s) to pay premiums due on the new policy or contract. Page 9 of 10

10 W-4P Department of the Treasury, Internal Revenue Service Form W-4P A W-4P must be completed: 1. With ALL applications for the GCU Option A Annuity 2. When filing a death claim on an Annuity contract Complete the bottom portion of the W-4P. The client MUST indicate if they do not wish to have any federal income tax withheld from the distribution(s). 1. Check Item 1 at the bottom of the form. 2. If they choose no withholding, you won t need to complete items 2 and 3. If the client wishes to have withholding from each distribution, they ll need to complete items 2 and 3. If the client does NOT fill in either item 1, 2, or 3, we WILL withhold from their distributions, and another W-4P would need to be completed and sent to us to correct. Once we have taken withholding and sent it on to the IRS, the money is NOT refundable to the client. GCU MUST withhold the mandatory percentages as set forth by Internal Revenue Service regulations. Page 10 of 10