What Are Non Qualified Annuities?

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    David RacichPRO
    Fountain Hills, Arizona
    Non-Qualified is a term generally used for non ERISA retirement plans or qualified plans. A life insurance company doesn't manufacture “qualified” products. Annuities, like life insurance, start out as non-qualified product lines not under the jurisdiction of ERISA. Non-qualified annuity payouts distribute basis tax free, whereas qualified annuity payouts are all taxable, even basis.  
     
    Answered on June 9, 2013
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    Peggy Mace
    Most of the U.S.
    Non qualified annuities are one of two types of annuities classified by the IRS. Qualified annuities are usually funded by an employer with pre-tax dollars from an employee's earnings, and possibly with matching funds from the employer. Non qualified annuities are obtained privately, and are funded with after-tax dollars. Non-qualified annuities are not subject to federal laws governing contribution caps and mandatory withdrawals.
    Answered on June 9, 2013
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    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    The term qualified has to do with the tax code.  If the annuity receives special treatment under the tax code it is qualified, if not, it is non-qualified.  Non-qualified annuities are personally purchased plans that accumulate money while deferring taxes and have the amazing ability to provide a steady stream of income for the life of the annuitant.
    Answered on June 13, 2014
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