IRS Addresses Treatment of Longevity Insurance as Annuity Contract

Recent letter rulings illustrate that, new and innovative products that provide a desired risk protection, can be structured to function within the existing tax guidelines. These longevity insurance products offer mortality/longevity protection in a varied and innovative format. The IRS's logical and well reasoned conclusions along with its willingness to address these new and innovative products should serve as encouragement to those who develop the life and annuity products necessary to meet ever changing consumer demands and needs. Letter Rulings 200949007 and 201001016 are both addressed to individuals establishing the investment accounts in question. IRS Letter Ruling 200949036 is addressed to an insurance company guaranteeing the benefits associated with this type of investment account.