Annuity "Game Changer" QLAC's

(MarketWatch)  The annuity industry just had their redefining moment on July 1, but no one seems to have noticed or understands the importance of what just happened — especially the annuity industry.

On July 1 of this year, the Department of the Treasury and the IRS approved the use of Qualified Longevity Annuity Contracts, aka QLACs, within 401(k)s and IRAs. QLACs are also known as Longevity Annuities or Deferred Income Annuities (DIAs) and were introduced around 10 years ago as a simplistic, no-fee way to solve for lifetime income starting at a future date.

The more I thought about this new QLAC ruling the more I am convinced that this is truly the defining moment for the controversial and negatively perceived world of annuities. Right now, the agents pretty much dictate the products sold and created by the carriers. In other words, carriers tend to create and design annuity products, like variable and indexed, that they think agents will sell. I know that sounds crazy and should be a consumer first type thought, but it's a fact that the inmates are running the asylum. That changed forever with the new law governing longevity use in 401(k)s and IRAs.  Read more

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