https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AQualified_longevity_annuity_contract_%28QLAC%29 2026-06-14T00:30:51Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Qualified_longevity_annuity_contract_(QLAC)&diff=15964&oldid=prev 2026-03-15T04:26:36Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>🕰️ &#039;&#039;&#039;Qualified longevity annuity contract (QLAC)&#039;&#039;&#039; is a type of [[Definition:Deferred income annuity | deferred income annuity]] purchased within a qualified retirement account — such as an IRA or 401(k) — that begins paying income at an advanced age, typically no later than age 85. Created under U.S. tax regulations, the QLAC allows retirees to set aside a portion of their retirement savings to fund guaranteed income that kicks in later in life, addressing the risk of outliving one&#039;s assets. For [[Definition:Life insurance | life insurers]] and [[Definition:Annuity | annuity]] providers, QLACs represent a focused product category at the intersection of retirement planning and [[Definition:Longevity risk | longevity risk]] management, governed by specific Internal Revenue Service rules that cap the amount an individual may allocate to such contracts.<br /> <br /> ⚙️ When a policyholder purchases a QLAC, the premium is excluded from the account balance used to calculate [[Definition:Required minimum distribution (RMD) | required minimum distributions]], effectively reducing the amount the retiree must withdraw — and pay taxes on — each year before the annuity&#039;s income start date. The insurer invests the premium and assumes the [[Definition:Longevity risk | longevity risk]], promising a stream of guaranteed payments beginning at the contractually specified age. Because the deferral period is long, the insurer can offer a relatively high payout rate per dollar of premium compared to an [[Definition:Immediate annuity | immediate annuity]]. Product design typically includes options such as a return-of-premium death benefit or a cash refund feature, though adding these riders reduces the eventual income stream. Insurers must file QLAC forms with the IRS and report contract details annually, adding a compliance layer that distinguishes these products from standard deferred annuities.<br /> <br /> 💡 The growing population of retirees facing decades of post-employment life has made longevity protection a strategic priority for U.S. life insurers. QLACs give carriers a way to serve this need within the tax-advantaged retirement system, attracting assets that might otherwise flow into mutual funds or other non-insurance vehicles. Regulatory changes — including the SECURE 2.0 Act of 2022, which raised the QLAC premium limit and removed certain age-based restrictions — have expanded the addressable market and renewed carrier interest in product development. For the broader [[Definition:Annuity market | annuity market]], QLACs reinforce the unique value proposition that only insurers can offer: the pooling and transfer of [[Definition:Longevity risk | longevity risk]] through contractually guaranteed lifetime income. While QLACs are specific to the U.S. tax code, analogous longevity-focused annuity structures exist in other markets, such as advanced-life deferred annuities discussed in the UK and Australian retirement policy contexts.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Deferred income annuity]]<br /> * [[Definition:Longevity risk]]<br /> * [[Definition:Required minimum distribution (RMD)]]<br /> * [[Definition:Annuity]]<br /> * [[Definition:Life insurance]]<br /> * [[Definition:Retirement income product]]<br /> {{Div col end}}</div>

PlumBot