Lincoln New Directions - Life Brokerage Financial Group New Directions SM single premium fixed...
Transcript of Lincoln New Directions - Life Brokerage Financial Group New Directions SM single premium fixed...
Client Guide
Lincoln New Directions SM fixed indexed annuity
The nature of protection takes a new direction
Growth potential with multiple types of interest crediting accounts
Wealth preservation through “locked-in” interest earnings and protection from losses
Income options, including one guaranteed to last a lifetime
Protection of a death benefit
Fixed Indexed Annuities
Lincoln New DirectionsSM single
premium fixed indexed annuity
Available for qualified (IRA and Roth
IRA) and nonqualified money, as well
as TSA transfers1
$10,000 minimum single premium
Maximum premium without prior
home office approval:
$2,000,000 for ages 0 – 65,
$500,000 for ages 65+
Issue ages 0 – 85
Two indexed interest accounts
Fixed Account with initial multi-year
guarantee period
Provides a Guaranteed Minimum
Cash Surrender Value
Nursing home and terminal illness
benefits available
Withdrawals from the contract
(also known as policy) are subject
to surrender charges and a
Market Value Adjustment. See the
current Lincoln New Directions
Facts-At-A-Glance for details.
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1TherearenoTSAloanprovisions.
The nature of retirement and fixed indexed annuities
The concept of retirement is changing. Individuals are living
longer, facing increasing costs, and addressing new challenges.
Today’s retirees are relying less on traditional retirement income
sources than in the past and instead planning and creating their
own retirement savings plan. A fixed indexed annuity can help
address some of the challenges facing retirees by providing greater
potential growth than many types of fixed interest products, yet
with less risk than investment vehicles based on equities. By their
very nature, fixed indexed annuities offer many advantages as a
retirement savings vehicle.
What should you know about fixed indexed annuities?Afixedindexedannuityisintendedforretirementandotherlong-term
financialneeds.It’sdesignedforindividualswhohaveenoughcashor
otherliquidassetstocoverlivingexpensesandunexpectedemergencies,
suchasmedicalexpenses.Sinceafixedindexedannuityisnotaregistered
securityanddoesnotparticipatedirectlyinthestockmarketoranyindex,
itisnotaninvestment.Itisaninsuranceproductdesignedtohelpyou
prepareforyourfuture.
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Growth potential
How can tax deferral help?Lincoln New DirectionsSMisatax-deferredfixedindexedannuity,whichallowsforgreater
growthpotentialthanasimilartaxablefixedproduct.Yourassetsearninterestanddonot
impactyourtaxbilluntiltheyarewithdrawn.Withtaxdeferral:
•Yourprincipalearnsinterest,and
•Allofyourinterestearnsinterest
Theseadvantagesmayhelpyoutoachieveyourretirementgoals.Withdrawalsaresubject
toincometaxand,ifwithdrawnbeforeage59½,maybesubjecttoa10%federal
penaltytax.Withdrawalsduringthesurrenderchargeperiodarealsosubjecttosurrender
chargesandaMarketValueAdjustment.
What are my account choices?Lincoln New Directionsoffersyoumultipleaccountswithdifferentinterestcrediting
methods.Youmaychoosehowyourmoneyisallocatedbetweenthreeinterestaccounts:
•FixedAccount,offeringaninitialfixedinterestrateguaranteeperiod2
•PerformanceTriggeredIndexedAccount3
•2-YearPoint-to-PointIndexedAccount
2 Guaranteesarebackedbytheclaims-payingabilityofTheLincolnNationalLifeInsuranceCompany.3NotavailableforcontractsissuedinthestateofWashington.
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Fixed Account
Can I get predictability and a multi-year guarantee?Lincoln New DirectionsSMfeaturesaFixed
Account.Withinthisaccount:
• Thereisafixedinterestrate,statedinadvance
•Therateremainsfixedformultipleyears2for
predictablegrowth
•Moneyallocatedtothisaccountwillalwaysaccumulate,
regardlessofanyindexperformance
WiththeFixedAccount,fixedinterestiscreditedand
compoundeddaily,givingtheFixedAccountsteady,
predictableaccumulation.Thefixedinterestratewillbe
declaredannuallyattheendoftheinterestrateguarantee
periodandwillnotbelessthantheguaranteedminimum
fixedinterestrateapplicableforthecontractyear.4
4 InterestratesaredeclaredbyTheLincolnNationalLifeInsuranceCompanyatitsdiscretion.Subsequentinterestratesmaybehigherorlowerthantheinitialonesandmaydifferfromthoseusedfornewcontracts.
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Performance Triggered Indexed Account
•Providesthepotentialforgreatergrowththanafixedrate
•Minimizestheimpactofindexfluctuationsonyourcreditedrate
•Offersprincipalprotection
Thishypotheticalexampleassumes:5
•PerformanceTriggeredIndexedAccountwithaspecifiedrateof5%fortheone-yearindexedterm
•A$100,000accountvalueatthebeginningoftheindexedterm
•Beginningindexvalueof1000
Indexedinterestiscreditedattheendoftheindexedtermandiscompoundedannually.Anewspecifiedrateisdeclaredforeachone-yearindexedterm,whichcanneverbelessthan2.5%.6
ThePerformanceTriggeredIndexedAccountisnotavailableforcontractsissuedinthestateofWashington.
1300
1200
1100
1000
900
800Beginningindexvalue Endingindexvalue
Beginningaccountvalue$100,000
Index%change
Indexedcredit%
Endingaccountvalue
10% 5% $105,000
0% 5% $105,000
-10% 0% $100,000
S&P
500
Inde
x va
lue
Growth potential. ThePerformanceTriggeredIndexedAccountcomparesthevalueoftheS&P500Indexatthebeginningandendoftheone-yearindexedterm(alsoreferredtoasindexterm).Ifthepercentagechangeofthosetwovaluesiszeroorpositive,you’llreceiveaspecifiedrateofindexedinterest.
Wealth preservation.Ifthedifferenceisnegative,youraccountiscreditedat0%,protectingyourprincipal.RegardlessofwhathappenstotheS&P500Index,youwillneverreceiveanegativerateonyourmoney.Inaddition,witheachindexedterm,anyinterestearningsare“lockedin.”BecauseyoudonotparticipatedirectlyintheS&P500Index,youraccountvaluewillnotbeerodedbyanysubsequentindexdeclines.Thismeansthatyouwillnotneedtoreboundfrompoorindexperformancebeforeyoucanbenefitfrompositiveindexperformanceduringsubsequentindexedterms.
5 Theseratesarehypotheticalandforillustrationpurposesonly.PastperformanceoftheS&P500IndexisnoguaranteeoffuturechangesintheS&P500IndexoroffutureindexedinterestearningsofLincoln New DirectionsSM.
6 Interestrates,specifiedrates,andindexedinterestcapsaredeclaredbyTheLincolnNationalLifeInsuranceCompanyatitsdiscretion.Subsequentinterest
rates,specifiedrates,andindexedinterestcapsmaybehigherorlowerthantheinitialonesandmaydifferfromthoseusedfornewcontractsorcontractsissuedatdifferenttimes.TheLincolnNationalLifeInsuranceCompanyreservestherightnottooffertheindexedaccountsafterthesurrenderchargeperiod.
One-year S&P 500 Index percentage change
Specified rate is credited
0% is credited
Negative 0+
One-yearindexedterm
Growth potential.Withthe2-YearPoint-to-PointIndexedAccount,thevalueattheendofthetwo-yearindexedtermiscomparedtothevalueatthebeginningoftheindexedterm.Thepercentagechangeofthosetwovaluesdetermineswhattheaccountearns.Ifthepercentagechangeispositive,theaccountwillearnthefullpercentagechange,uptoanindexedinterestcap.
Wealth preservation.If,attheendofthetwo-yearindexedterm,thepercentagechangeisnegative,theaccountiscreditedat0%,protectingyourprincipal.Inaddition,witheachindexedterm,anyinterestearningsare“lockedin.”Becauseyoudon’tparticipatedirectlyintheS&P500Index,youraccountvaluewillnotbeerodedbyanysubsequentindexdeclines.Thismeansthatyouwillnotneedtoreboundfrompoorindexperformancebeforeyoucanbenefitfrompositiveindexperformanceduringsubsequentindexedterms.
Thishypotheticalexampleassumes:5
•2-YearPoint-to-PointIndexedAccountwithanindexedinterestcapof12%forthetwo-yearindexedterm
•A$100,000accountvalueatthebeginningoftheindexedterm
•Beginningindexvalueof1000
Anindexedcreditpercentageof12%and10%isequivalenttoanannualeffectiveinterestrateof5.83%and4.88%,respectively,compoundedovertwoyears.
Indexedinterestiscreditedattheendoftheindexedtermandcompoundedeverytwoyears.Anewindexedinterestcapisdeclaredforeachtwo-yearindexedtermandwillneverbelessthan7%.6
Indexed interest capRange of possible earnings
0% credited
0%
+
_
Two-year S&P 500 Index percentage change
20% 12% $112,000 (capped)
10% 10% $110,000
-10% 0% $100,000
1300
1200
1100
1000
900
800Beginningindexvalue Endingindexvalue
Beginningaccountvalue$100,000
S&P
500
Inde
x va
lue
2-Year Point-to-Point Indexed Account
•Providesupsidegrowthpotential,uptoacap
•Protectsprincipal
•Hasthegreatestgrowthpotential,andthegreatestpotentialoftheothertwoaccounts
forcreditingalowerrate
5 Theseratesarehypotheticalandforillustrationpurposesonly.PastperformanceoftheS&P500IndexisnoguaranteeoffuturechangesintheS&P500IndexoroffutureindexedinterestearningsofLincoln New DirectionsSM.
6 Interestrates,specifiedrates,andindexedinterestcapsaredeclaredbyTheLincolnNationalLifeInsuranceCompanyatitsdiscretion.Subsequentinterest
rates,specifiedrates,andindexedinterestcapsmaybehigherorlowerthantheinitialonesandmaydifferfromthoseusedfornewcontractsorcontractsissuedatdifferenttimes.TheLincolnNationalLifeInsuranceCompanyreservestherightnottooffertheindexedaccountsafterthesurrenderchargeperiod.
Index%change
Indexedcredit%
Endingaccountvalue
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Two-yearindexedterm
Is there opportunity for growth if the indexed accounts repeatedly earn 0%?
TheGuaranteedMinimumCashSurrenderValue(GMCSV)isadditionalprotectionwhenyouhaveminimalornogainsinyourcontractvalue(alsoknownasaccumulationvalue).Ifyousurrenderyourcontract,youwillreceivethegreaterofyouractualcontractvalue,lessanyapplicablesurrenderchargeandMarketValueAdjustment,ortheGMCSV.WithdrawalsandsurrenderchargeswillaffecttheGMCSVandcanresultintheGMCSVbeinglessthanyourpremium.TheGMCSVisbasedonaguaranteedminimumfixedinterestrate,whichrangesfrom1%–3%andvariesbycontractyear.Soaslongasyouleaveyourmoneyinthecontractuntiltheendofthesurrenderchargeperiod,youareguaranteedtoreceivenolessthanyourpremium7withinterestattheguaranteedminimumfixedinterestrate,eveniftheindexedaccountsrepeatedlyearn0%.
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7Reducedbyanyapplicablepremiumtax.
Income options
What if I need to access my money?Lincoln New DirectionsSMoffersawithdrawalprovisionintheeventthatyouneedaccesstoyourmoney:
•10%ofyourcontractvalueisavailabletoyoueachcontractyearduringthesurrenderchargeperiod,withoutincurringcharges.Thisisreferredtoasthe10%annualfreewithdrawal.
•Ifyouareconsideringtakingyour10%annualfreewithdrawal,youshouldplacethatportionofyourmoneyintheFixedAccount.Amountswithdrawnfromanindexedaccountbeforetheendofatermwillnotreceiveanyinterestforthatterm.
• Anywithdrawalsinexcessofthe10%annualfreewithdrawalwillbesubjecttoapplicablesurrenderchargesandaMarketValueAdjustment.Withdrawalsaresubjecttoincometaxesand,ifwithdrawnbeforeage59½,a10%federalpenaltytaxmayapply.
What if I decide I need regular income?ThereareseveraloptionsforyoutotakeincomefromyourLincoln New Directions contract.
Systematic withdrawals Youhavetheoptionoftakingsystematicwithdrawalseitherannually,semiannually,quarterly,ormonthly.AnysystematicwithdrawalsmustbetakenfromtheFixedAccount.
Annuitization YoucanannuitizeyourLincoln New Directionscontractafterthesecondcontractyear,convertingittoanincomestreambackedbyTheLincolnNationalLifeInsuranceCompany.YoucanannuitizeacontractpurchasedinFloridaafterthefirstcontractyear.Thereareseveralannuitizationoptionsavailable,includingoneprovidingincomeforyourlifetime.
Market Value Adjustment
What is it and when does it apply?Ifyouaccessmorethanthe10%annualfreewithdrawalbeforetheendofthesurrenderchargeperiod,itmaybesubjecttosurrenderchargesandaMarketValueAdjustment(MVA).TheMVAisapositiveornegativeadjustment,basedonthecurrentinterestrateenvironmentatthetimeofthesurrender.TheMVAdoesnotapplyto:withdrawalsafterthesurrenderchargeperiod,10%annualfreewithdrawals,thedeathbenefit,annuitizedcontracts,andcontractsissuedinthestateofMinnesota.
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Protection
Does Lincoln New Directions SM offer death benefit protection?Yes.Lincoln New Directionsoffersadeathbenefit,availablebeforethecontractisannuitized.Uponthedeathofacontractownerorannuitant,beneficiariesmayreceivethegreaterofthe:
•Contractvalue,or
•Premiumpaid,minusanypriorsurrendersandsurrendercharges,accumulatedattheguaranteedminimumfixedinterestrate.ThisisalsoknownastheGuaranteedMinimumNon-SurrenderValue.
Thedeathbenefitispayabledirectlytothecontractbeneficiaries,whichavoidsthepossibledelaysofprobate.Thedeathbenefitissubjecttoanyapplicabletaxes.
Can I access my money if my health becomes a concern?Yes.Lincoln New Directionsfeaturesnursinghomeandterminalillnessbenefits(providedthroughriders).Thesebenefitsofferaccesstoyourmoneywithoutchargesafterthefirstcontractyear,ifacontractownermeetsoneofthefollowingconditions:
•Firstdiagnosedwithaterminalillnessafterthecontractissuedate;or
•Confinedtoanursinghomeorhospitalforatleast30consecutivedays,beginningafterthefirstcontractanniversary.
SeetheDisclosureStatementfornecessaryrequirementsandadditionaldetails.ThenursinghomebenefitisnotavailableforcontractsissuedinthestateofMassachusetts.
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Other Lincoln New DirectionsSM information
Contractissue:Lincoln New Directionsfixedindexedannuityisissuedfourtimesamonth.Interestiscalculatedandcreditedfromthedatethecontractisissued.Nointerestiscreditedbetweenthedatethepremiumisreceivedandthedatethecontractisissued.
Allocations:WhenyoupurchaseLincoln New Directionsyoucandecidewhatwholepercentagesofyourmoneytoplaceineachaccount.Eachyear,afterthecontractanniversarydate,duringthe25-dayreallocationperiod,youwillbesentaReallocationNoticealongwithyourannualStatementofAccount.YourReallocationNoticewillincludethefixedinterestrate,specifiedrate,andcapforeachoftheaccountsavailableduringtheyear.Whenyoureceiveyournotice,aftertheendoftheindexedterm,youmaymoveyourmoneybetweentheavailableaccountspriortotheendofthe25-dayreallocationperiod.Thereallocationwillbeeffectiveasofthecontractanniversarydate.
Withdrawals:Whenyouaccessmoney,withdrawalsandanychargesaredeductedfirstfromtheFixedAccount.AnywithdrawalstakenfromtheFixedAccountwillreducetheactualamountofinterestcredited.AftertheFixedAccountisexhausted,withdrawalsandanychargesaredeductedpro-ratafromtheindexedinterestaccounts.Ifwithdrawalsaretakenfromanindexedinterestaccount,theamountwithdrawnwillnotreceiveanyindexedinterestforthatterm.
Righttocancel:Youhavearighttocancelyour Lincoln New Directions annuitycontractwithin20daysafteryoureceiveyourcontract(statevariationsapply).Tocancelyourcontract,sendawrittenrequestforcancellationtoTheLincolnNationalLifeInsuranceCompany’shomeoffice.Wewillreturnyourpremiumpaiduponreceiptofyourwrittenrequest.Cancelingyourcontractvoidsitfromthebeginning.Ifyoucancelyourcontract,youwillnotbepermittedtopurchaseanotherLincolnfixedannuityproductforaperiodofsixmonths.
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Important disclosures. Please read.
ThereisnoadditionaltaxdeferralbenefitforannuitycontractspurchasedinanIRAorothertax-qualifiedplan,sincethesearealreadyaffordedtax-deferredstatus.Therefore,anannuityshouldonlybepurchasedinanIRAorqualifiedplaniftheclientvaluessomeoftheotherfeaturesoftheannuity.
LincolnNewDirectionsSMsinglepremiumdeferredannuity(contractform94-523,orstatevariation)isafixedindexedannuityissuedbyTheLincolnNationalLifeInsuranceCompanyandmaynotbeavailableinallstates(maybereferredtoas“equityindexedannuity”incertainstates).ThecontractmaybesubjecttoaMarketValueAdjustment.Contractmaybereferredtoas
“certificate”incertainstates.ThecertificateisagroupannuitycertificateissuedunderagroupannuitycontractissuedbyTheLincolnNationalLifeInsuranceCompanytoagroupannuitytrust.
WaiverofSurrenderChargesforNursingHomeConfinementRiderandWaiverofSurrenderChargesforTerminalIllnessRider(formAE-119andformAE-170,respectively,orstatevariation)maynotbeavailableinallstates.
Theexacttermsoftheannuityarecontainedinthecontractsandanyattachedriders,whichwillcontrolTheLincolnNationalLifeInsuranceCompany’scontractualobligations.Forcompleteinformationabouttheannuity,pleasealsoreadtheDisclosureStatementandFacts-At-A-Glance,orcontactyourLincolnNationalLifeInsuranceCompanyrepresentative.
“Standard&Poor’s®”and“S&P500®”aretrademarksofTheMcGraw-HillCompanies,Inc.andhavebeenlicensedforusebyTheLincolnNationalLifeInsuranceCompany.TheLincolnNewDirectionsannuityisnotsponsored,endorsed,sold,orpromotedbyStandard&Poor’s,andStandard&Poor’smakesnorepresentationregardingtheadvisabilityofpurchasingthisAnnuity.
TheS&P500Indexisapriceindexanddoesnotreflectdividendspaidontheunderlyingstocks.
This material was prepared to support the promotion and marketing of an insurance product. Neither the insurance company, its distributors nor their respective employees and representatives 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. Clients should consult their own independent advisor as to any tax, accounting, or legal statements made herein.
www.LFG.com
©2007LincolnNationalCorporation
LincolnFinancialGroupisthemarketingnameforLincolnNationalCorporationanditsaffiliates.Affiliatesareresponsiblefortheirownfinancialandcontractualobligations.
LFD0612-2680FAX-0114-06RP02/07Order FA-CORE-NEW
A century of integrityAtLincolnFinancialGroup,wehavea100-year-oldheritageofhelpingpeoplefindsolutionstotheirfinancialchallenges.Asoneofthelargestfinancialservicescompaniesinthenation,weareaprovenindustryleaderinidentifyinganddeliveringsophisticatedfinancialstrategiesandproductsolutionsforthecreation,protection,andenjoymentofwealth.Wearecommittedtohelpingclientsredefinetheirretirementbecausewedon’tbelieveretirementisanend—it’sanopportunityforeveryonetostartdoingwhattheyweremeantforallalong.
The stability of The Lincoln National Life Insurance Company Acompany’spromisesareonlyasstrongasitsreputation,integrity,andfinancialstrength.TheLincolnNationalLifeInsuranceCompanyhasconsistentlyreceivedhighmarksfromindependentevaluatorsincludingA.M.Best,Fitch,Moody’s,andStandard&Poor’s.Theseratingsapplytotheclaims-payingabilityoftheinsurancecompany.
RatingsareasofApril2006.
Not a deposit
May go down in value
Not FDIC-insured Not insured by any federal government agency
Not guaranteed by any bank or savings association
A.M. Best A+(2ndhighestof16)
“Excellentfinancialstrength...strongabilitytomeettheirongoingobligationstopolicyholders.”
Fitch AA(3rdhighestof24)
“...reflectsthecompany’slong-standingcompetitiveposition.”
Moody’s Aa3(4thhighestof21)
“...offersexcellentfinancialsecurity.”
Standard & Poor’s
AA-(4thhighestof21)
“...arecognizedleaderinthehighincomemarket.”