What is Deferred Income Annuity (DIA)?
A deferred income annuity (DIA) is a contract that converts a current premium into guaranteed lifetime income beginning at a future date – typically 5 to 30 years after purchase. Unlike a SPIA which begins payments immediately, a DIA defers income to a chosen start date in exchange for substantially higher payments when income begins.
How DIAs Work
You pay a single premium today (or contribute over time with a flexible premium structure) and select an income start date. The carrier locks in your future payment amount based on your age, gender (in most states), current interest rates, and the deferral period. The longer the deferral, the larger the future payment – because the carrier has more time to invest your premium and because mortality credits build up over the deferral years.
DIA vs QLAC vs Longevity Insurance
A DIA designed to start at age 80 or 85 is sometimes called longevity insurance because its main purpose is hedging against outliving your savings. A QLAC is a specific type of DIA purchased inside a qualified retirement account that lets you defer required minimum distributions on the QLAC premium until age 85.
When DIAs Make Sense
DIAs work best when you have a long pre-retirement window and want to lock in future income at today’s rates without giving up access to other assets. Pre-retirees in their 50s buying a DIA to start at 65 or 70 capture mortality credits that boost the payout substantially compared to buying a SPIA later.
Frequently Asked Questions
What is a deferred income annuity (DIA)?
A deferred income annuity (DIA) is a contract that converts a current premium into guaranteed lifetime income beginning at a future date – typically 5 to 30 years after purchase.
What's the difference between a DIA and a QLAC?
A DIA designed to start at age 80 or 85 is sometimes called longevity insurance because its main purpose is hedging against outliving your savings. A QLAC is a specific type of DIA purchased inside a qualified retirement account that lets you defer required minimum distributions on the QLAC premium until age 85.
When do DIAs make sense?
DIAs work best when you have a long pre-retirement window and want to lock in future income at today's rates without giving up access to other assets.
