Will the dollar limit of QLAC purchases increase over time and, if so, how?

The QLAC premium limit has increased one time since it was introduced in 2014. Originally, QLAC purchases were limited to $125,000, but effective January 1, 2018, the limit was increased to $130,000. It is likely to increase in the future as well, as the regulation indicates that the limit will increase with inflation. (Inflation from 2014-2016 was low, which explains the lack of increase until 2018.)

Buyers who have previously purchased QLACs under outdated limits would be permitted to buy additional premiums up to the new limit if and when the limit is increased, assuming they have sufficient funds in their account.

In addition, the regulations have language suggesting that the 85 year old cap will increase in order to account for future increases in life expectancy. It is less clear how often this age cap will be adjusted, and what the mechanics of such a change would be.

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Head to the QLAC Guide to learn more about the rules governing QLAC purchases.