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How to Apply For an American General Annuity Loan

  • Step 1 – Decide how much you want to borrow from your annuity and how you would like to repay it.
  • Step 2 – Fill out and submit AIG’s “Policy Loan Application”
  • Step 3 – If your application is approved, you will receive your funds.

Loan Application

Application form

AIG Overview

Founded in 1919, American International Group (AIG) is an insurance company based in New York City with offices in over 80 countries and jurisdictions. The company’s three main offerings are: life and retirement, general insurance, and tech (via a separate subsidiary). Some of AIG’s retirement offerings are through its various subsidiaries, including: American General Life Insurance Company (“AGL”), The United States Life Insurance Company in the City of New York, and The Variable Annuity Life Insurance Company (“VALIC”).

AIG Loan Overview

AIG’s “Policy Loan Application” is a fairly straightforward application consisting of four pages. In addition to providing basic personal information, the applicant must also decide how much he/she would like to borrow and how it will be repaid (e.g., monthly, quarterly, or semi-annually).

Important things to know:

Income Tax Withholding

With respect to tax withholding, the application states that if the applicant does not make a choice (or if is required by law), applicable taxes will be withheld according to federal and state requirements.

Federal Election

In this section of the application, the applicant can elect to 1) not have federal income tax withheld from the distribution check, 2) authorize the company withhold the full taxable portion of the distribution check, or 3) specify the amount to be withheld from the distribution check. In the event the estimated tax payments do not cover the amount of tax owed from the loan distribution, there may be penalties under the estimated tax payment rules.

State Election

The same withholding options are available with respect to state income tax. However, some state laws require additional documentation before the applicant is allowed to choose not to have state income tax withheld or designate the amount to be withheld. To be safe, the applicant should research his/her applicable state laws or consult a tax professional.

Signature and Date

In the signature portion of the application, the borrower certifies that the loan is not hindered by any previous agreement, legal obligations, or court/administrative orders. Examples of such hindrances are bankruptcy and divorce proceedings. If the borrower violates any of these certifications and the company would not have issued the loan if those facts were known, then the loan and any interest will have to be immediately repaid to the company. Also, if the company is implicated in any lawsuit connected to a violation of these certifications, then the borrower will indemnify and be obligated to defend the company in those proceedings.

Also, the company states it will provide the borrower and IRS with an informational tax form after the end of the calendar year. Further, there is a notice that if the borrower is taking this loan before he/she is 59 1/2 , then there may be an additional IRS penalty.

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Written by J. Johnson.