QLAC death benefits
How are the death benefits of a QLAC treated? Owner dies before starting to receive deferred income. Is it paid back to the IRA and available for stretch by bene, or is it paid directly to bene? How about after beginning to receive the income, any difference in treatment of death benefit?
Permalink Submitted by Alan - IRA critic on Mon, 2015-04-27 19:45
Basically, the options are limited to a life annuity for the beneficiary (IRA annuity) unless a return of premium provision is offered. In that case, the ROP payment is treated as an RMD and not eligible for rollover. There are some other applicable rules, starting on p 12 of these QLAC Regs: https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-15524.pdf