How Qualified Annuity Longevity Contracts (QLACs) Work

Qualified Annuity Longevity Contracts (QLACs) provide people with another form of guaranteed income protection that can go along with lifetime income from fixed, indexed and variable annuities. Consumers will need to develop a strong understanding of how this asset protection vehicle works so that they can correctly position it within their retirement plan and benefit from the substantial income protection that QLACs provide. Essentially QLACs can be classified as a type of “term” annuity that can provide pure income protection with no tangible contract value. These types of annuity contracts have recently started to make a big impression on the financial marketplace. “Consumers who are concerned with outliving their income can insure themselves against the risk of superannuation with these products and Congress recently allowed them to be used inside individual retirement accounts (IRAs) and other retirement plans.”

See Mark. P. Cussen, Qualified Annuity Longevity Contrats: How QLACs Work, Investopedia, January 1, 2016.