How to buy a QLAC
1. Select an Agent. Start your shopping with an online agent/broker with multi-carrier quoting. Learn about different carriers, products, and features.
2. Select QLAC Product Features. Return of Premium and Joint & Survivor Benefits are great for heirs and surviving spouses but involve trade-offs in terms of annuity payment size.
3. Select a carrier. Review the pricing of product features for several insurance carriers. Verify their claims-paying abilities with credit agency ratings (e.g., A.M. Best).
4. Request Annuity Purchase Paperwork. Call an Agent or Broker. He or she will review your plan with you, partially complete the carrier’s application questionnaire and send it on to you for signature.
5. Complete and Mail Annuity Application Paperwork. Review and sign your annuity application; sign all the forms including the funds-transfer form; send to the carrier or agent/broker as instructed.
6. Sign Receipt of Policy Delivery Notification. Funds transfer and purchase complete, the carrier prints and mails annuity contract to you. Sign the receipt and return to the carrier.
7. Calculate Your Lower Required Minimum Distributions! After age 72, your RMD will be reduced by the amount of your QLAC purchase. Make sure you withdraw at least the new RMD.
8. Receive Yearly Annuity Account Correspondence. An annual statement from your insurance company typically includes the Income start date and amount of the benefit. Confirm amounts with your application.
9. Decide How Annuity Payments Should Be Made. One to two months before the annuity's income start date, many carriers will send a letter offering to set up a direct deposit.
10. Enjoy Life-long Annuity Benefits Payments. Because of your careful planning, you will receive annuity payments (and a 1099-R) from the insurance company, starting on the inception date and lasting for the rest of your life!