Deferred Income Annuities and QLACs

This course provides a clear overview of two unique retirement planning tools now available to insurance producers: deferred income annuities (DIAs) and qualified longevity annuity contracts, or QLACs. The course fully explores DIAs: what they are, how they are designed, and how they work. Features that are commonly available with these products are examined as are the limitations and requirements they impose on buyers. The second part of the course explains the QLAC rules and how deferred income annuities can be used to generate a guaranteed income stream for IRA, 401(k) and 403(b) participants, exempting the funds used to purchase the QLAC from the age 70½ minimum distribution calculation. The course concludes with a discussion of annuity placement and suitability issues, explaining how deferred income annuities and guaranteed income can be positioned as part of a balanced retirement income plan.

The course covers the following topics:

  • purpose of deferred income annuities
  • how DIAs work and common DIA features
  • RMD requirements and QLACs
  • QLAC requirements
  • using DIAs in a balanced retirement income plan  
  • annuity suitability requirements

This is an intermediate-level course. Upon completion, students will be able to:

  • demonstrate an understanding of deferred income annuities: their purpose, design and function
  • cite features and limitations that are common to today’s DIAs
  • show an understanding of DIA payout structures
  • explain the rules that allow QLACs to be purchased with funds in an IRA or a defined contribution plan
  • show how QLACs can lower required distributions and generate a guaranteed income stream