Because the Treasury Department gave approval in 2014 for the use of an annuity called a QLAC (pronounced “Q-lack”), which stands for qualified longevity annuity contract, this insurance product is being heavily marketed to seniors. Basically, it’s a contract that allows a person to put up to 25% or $125,000 (whichever is less) of traditional IRA or 401(k) funds into an annuity without the purchase of the annuity being a taxable event.(Distributions from the QLAC are taxable.) However, what seniors are not being told in this marketing effort is that this annuity may still be a countable resource when making application for Medicaid/TennCare assistance, and the requirement to cash it in may result in significant penalties and surrender charges. Whenever you are considering purchasing a financial product that requires a long-term contract and/or commitment we recommend that you discuss such purchase -and all of its possible consequences - with your elder law attorney.