QLAC-maximum premium equals which amount?

QLAC-maximum premium equals which amount?

• A. 125,000
• B. 25% of aggregate account balance
• C. Lesser of $125,000 or 25% of aggregate account balance
• D. 200,000

Answer: (C)

Premiums for a Qualified Longevity Annuity Contract (QLAC) are capped at the lesser of $125,000 or 25% of the aggregate balance in eligible retirement accounts. This rule ensures you can still keep a substantial portion of retirement assets available for other needs while obtaining the longevity protection a QLAC provides. If your total balances are small, the 25% limit is the binding constraint; if your balances are large, the $125,000 ceiling applies. Hence the maximum premium is the lesser of the two amounts.

Premiums for a Qualified Longevity Annuity Contract (QLAC) are capped at the lesser of $125,000 or 25% of the aggregate balance in eligible retirement accounts. This rule ensures you can still keep a substantial portion of retirement assets available for other needs while obtaining the longevity protection a QLAC provides. If your total balances are small, the 25% limit is the binding constraint; if your balances are large, the $125,000 ceiling applies. Hence the maximum premium is the lesser of the two amounts.