Buy a future paycheck today: pay now, lock the income, and turn it on years later — often at a much higher rate.
Like an immediate annuity, but income starts on a future date you choose (often 5–20+ years out). Because the insurer holds your money longer and you may not live to collect, the eventual payout per dollar is markedly higher.
You get nothing during the deferral, and if you die before (or shortly after) income starts, you may collect little or nothing without a death-benefit rider — which lowers the payout. It is a bet on your own longevity.
Higher income per dollar than a SPIA because of the deferral. Deferring from 60 to 70 can raise the eventual monthly income well over 75% — but you collect nothing in between.
Like a SPIA, no explicit fee; costs are embedded in the payout rate.
Very low. Most DIAs cannot be surrendered for cash; some offer limited liquidity riders that reduce the payout.
Same exclusion-ratio treatment as a SPIA for non-qualified money; fully taxable for qualified money. A DIA inside an IRA that defers required distributions is a QLAC (see separate entry).
Educational explainer, not individualized financial advice. Figures are typical industry ranges as of 2026 and vary by insurer, product, and state. Sources: SEC/FINRA investor bulletins, IRS Pub 575/939, NAIC model regulations, SECURE 2.0 Act. We’re independent and don’t sell annuities.