Transcript My Presentation - Wholesale Fixed Annuity Brokerage

Lincoln Living
IncomeSM Advantage
Lincoln fixed indexed annuities
with the Lincoln Living IncomeSM
Advantage
Presenter Name
Title
Date
©2007 Lincoln National Corporation
For agent or broker use only. Not for use with the public.
LCN0708-2006690 (FAX-0365-07) 8/07
Agenda items
• Meeting retirement challenges with fixed
indexed annuities
• Income planning with your clients
• Key advantages of the Lincoln Living IncomeSM
Advantage
• How does it work?
• Considerations and references
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Retirement challenges
Challenge:
• Market volatility
• Maintaining current lifestyle
Lincoln fixed indexed annuities offer
• Locked in interest earnings
• The power of zero
• Fixed and indexed account options
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Retirement challenges
Challenge:
• Income
Lincoln fixed indexed annuities offer
• Annuitization options
• Lincoln Living IncomeSM Advantage
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Income planning
• Retirement may last longer than expected
• Do your clients want flexibility and control over
income?
• How much will Social Security and other
traditional income sources provide?
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Who is the client?
Clients:
• Focused on retirement planning
and future income needs
• Who think or know they will need
retirement income
• Who want a level of certainty about
their income
• Wanting additional flexibility to
start, stop, or adjust their
payments based on their income
needs
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Why Lincoln Living IncomeSM
Advantage?
Key Benefits
• Provides guaranteed income payments for life1 if
certain requirements are met
• Clients retain control over payments and contract
• Have the flexibility to start, stop, and skip payments
• Early planning can result in higher payment
amounts
1Guarantees
are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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How does Lincoln Living IncomeSM
Advantage work?
•
Lifetime Benefit Amount = Guaranteed
payment amount
•
Lifetime Benefit Factor = Payment percentage
•
Lifetime Benefit Base = Income base
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How does Lincoln Living IncomeSM
Advantage work?
Guaranteed payment amount =
Payment percentage x Income base
• Guaranteed, even if contract value is depleted to $0,
assuming no other withdrawals are made
• Can begin taking payments any time during the year,
after the 12-month waiting period
• Not subject to any surrender charge or Market
Value Adjustment
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Lincoln Living IncomeSM Advantage
Guaranteed payment amount =
Payment percentage x Income base
• Based on the attained age of the covered life* at time of
first payment, and
• Number of complete years between rider effective date
and beginning of income payments
• Once client takes a withdrawal after the waiting period,
the payment percentage is locked in.
*In the case of joint contractowners, the payment percentage is based on the age of the
younger covered life.
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Lincoln Living IncomeSM Advantage
Guaranteed payment amount =
Payment percentage x Income base
• Withdrawals during the waiting period reduce the
income base
• Recalculated on each contract anniversary
• Greater of the current contract value and the previously
calculated income base
• Any withdrawal over the guaranteed payment amount is
considered an additional withdrawal
• Additional withdrawals will reduce the income base, and
therefore, subsequent guaranteed payment amounts
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Other withdrawals
Contract’s annual free withdrawal
• Up to 10% of your contract value
• Your Lincoln Living Income Advantage payments count
towards this 10% annual free withdrawal
Additional Lincoln Living Income Advantage withdrawals
• Any amount over the annual guaranteed payment amount
• Withdrawals in excess of the guaranteed payment amount will
significantly reduce future payments. The income base and the
guaranteed payment amount are reduced on a pro rata basis.
• Amounts over the 10% may be subject to surrender charges
and Market Value Adjustment
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Retirement income planning
opportunity
1. Determine future income needs
2. Consider age at that time and determine Lincoln
Living IncomeSM Advantage payment percentage
3. Estimate accumulation needed with assumptions for
future crediting rates
4. Work backwards to determine savings amount
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Retirement income planning
opportunity
Number of years between electing Lincoln Living
IncomeSM Advantage and when payments begin
Age when income
payments begin
Less than
5 years
5 – 10
years
More than
10 years
50 – 54
4.0%
5.0%
6.0%
55 – 59
4.5%
5.5%
6.5%
60 – 64
5.0%
6.0%
6.5%
65 – 69
5.5%
6.5%
7.0%
70 – 74
6.0%
7.0%
7.5%
75 – 79
6.5%
7.5%
8.0%
80 – 84
7.0%
8.0%
8.5%
85 – 89
7.5%
8.5%
9.5%
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Considerations
Cost is 0.40% annually
• After the surrender charge period, the fee may vary annually but will
never exceed 1.0%
• Assessed against the contract value, beginning with the first
rider anniversary, after interest is credited (charge may exceed
amount of interest credited)
• Taken from Fixed Account.
• When no money is in the Fixed Account, then taken pro rata from the
indexed accounts where money is allocated
• Assessed every year, regardless of one-year or two-year indexed term
Add at issue or on contract anniversary, subject to age
limitations and state availability
Not commissionable
Withdrawals during waiting period are subject to
contract terms and will reduce the income base
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Considerations
Issue ages: 50 – 85
Covers single or joint lives
• If a single life, that person must be the contractowner
and annuitant
• If the contractowner is non-living (i.e. a trust), the covered life
must be the annuitant
Joint covered lives must be spouses at issue
• The covered life must be the contractowner and annuitant
• The joint covered life must be the joint contractowner or
primary beneficiary
Covered lives cannot be changed after issue. Change
of ownership terminates the rider
Contractowner can cancel the rider, but only after it’s
been in force for at least five years
For agent or broker use only. Not for use with the public. LCN0708-2006690
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The death benefit
Upon the death of the individual contractowner or
joint contractowners, any remaining contract value
will be paid out according to contract provisions.
A spousal beneficiary who is a covered life may also
continue the contract along with the rider benefits.
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Where to find information and forms
Visit www.lfd.com
• Marketing materials and product specs
• Order forms
Application (BJF-05650, plus state variations)
Rider election form, or state variations
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Important information
This material was prepared to support the promotion and
marketing of fixed indexed annuity products. Lincoln
Financial Group® affiliates, their distributors, and their
respective employees, representatives, and/or insurance
agents do not provide tax, accounting, or legal advice. Any
tax statements contained herein were not intended or written
to be used, and cannot be used for the purpose of avoiding
U.S. federal, state, or local tax penalties. Please consult your
own independent advisor as to any tax, accounting, or legal
statements made herein.
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Important disclosure
A fixed indexed annuity is intended for retirement or other long-term needs. It is
intended for a person who has sufficient cash or other liquid assets for living expenses
and other unexpected emergencies, such as medical expenses.
Lincoln New DirectionsSM single premium deferred annuity (contract form 94-523, or
state variation) is a fixed indexed annuity issued by The Lincoln National Life
Insurance Company and may not be available in all states (may be referred to as
“equity indexed annuity” in certain states). Lincoln OptiChoiceSM flexible premium
deferred annuity (contract form 05-606, or state variation) is a fixed indexed annuity
issued by The Lincoln National Life Insurance Company and may not be available in
all states (may be referred to as “equity indexed annuity” in certain states). The
Lincoln National Life Insurance Company is not authorized nor does it solicit
business in the state of New York. Contracts may be subject to a Market Value
Adjustment. Contract may be referred to as “certificate” in certain states. The
certificate is a group annuity certificate issued under a group annuity contract issued
by The Lincoln National Life Insurance Company to a group annuity trust. Guarantees
are backed by the claims-paying ability of The Lincoln National Life Insurance
Company. The Lincoln Living IncomeSM Advantage Guaranteed Lifetime Withdrawal
Benefit (GLWB) rider (form AE-217 or state variation) is sold in conjunction with Lincoln
New Directions and Lincoln OptiChoice fixed indexed annuities and may not be
available in all states.
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Important disclosure
Withdrawals of taxable amounts from an annuity are subject to income tax, and
withdrawals prior to age 59½ may be subject to a 10% federal penalty tax.
Purchase of the contract through a qualified plan does not provide any additional tax
deferral benefits beyond those already provided through the plan. If your client is
purchasing the contract through a qualified plan, they should consider purchasing it
for its death benefit, annuity options, and other non-tax related benefits.
Lincoln Financial Group is the marketing name for Lincoln National Corporation and
its affiliates.
Affiliates are separately responsible for their own financial and contractual
obligations.
For agent or broker use only. Not for use with the public. LCN0708-2006690
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Questions?
For agent or broker use only. Not for use with the public. LCN0708-2006690
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