Lincoln Insured Income Immediate Annuity

Transcription

1 Fixed Annuities Lincoln Insured Income Immediate Annuity single premium immediate annuity Income is just the beginning Payment options to fit your needs Guaranteed income No market risk Client Guide

2 Lincoln Insured Income Immediate Annuity is a single premium immediate annuity (SPIA). SPIA Impaired Risk SPIA Issue Ages Life payment options years years Period certain only payment options 0 95 years N/A Premium minimum Life payment options $25,000 $100,000 Period certain only payment options $10,000 N/A Payment Options Life only Life with period certain Life with installment refund Joint and survivor life Joint and % to survivor life Contingent joint and % to survivor life Joint and survivor life with period certain Period certain only N/A Payment Frequency Monthly Quarterly Semiannual Annual

3 Prepare for the trip Americans are living longer than ever before. Advances in the technology and healthcare industries are helping an average 65-year old husband and wife to have a 50% chance of one person living to age If you are approaching or already enjoying retirement, ask yourself some of the following questions: Are you financially prepared for the long haul? Have you engineered your retirement plan for the possibility that you may be retired for longer than those in previous generations? Will you have enough retirement income to provide for your necessities and live your current lifestyle? Having enough assets saved may not suffice if they are not being distributed to you as income to meet your needs. Those same advances in healthcare also mean increased medical costs for many retirees. News of skyrocketing medical costs for older Americans is everywhere. Anticipating and managing retirement expenses can be difficult, but having a dependable income stream can help. You may be looking for a product to meet your retirement income needs. Lincoln Insured Income Immediate Annuity may be a solution. It offers guaranteed income for as long as you live, or a specific number of years, depending on which payment option you choose. The income provided by Lincoln Insured Income Immediate Annuity may help you to cover your expenses, supplement your other income, or meet a variety of other retirement income needs. 1 Source: Annuity 2000 Mortality Table Two separate companies issue Lincoln fixed annuities and single premium immediate annuities. New York contracts are issued by Lincoln Life & Annuity Company of New York. For all other states, contracts are issued by The Lincoln National Life Insurance Company. These companies are separately responsible for satisfying their own financial and contractual obligations. Guarantees are backed by the claims-paying ability of the issuing insurance company.

4 What is an immediate annuity? You may be familiar with other types of retirement savings products which can help you accumulate money. An immediate annuity is a fixed annuity designed for the distribution of income. Lincoln Insured Income Immediate Annuity is an income contract (also known as policy) purchased with a single premium payment. The insurance company will make regular payments to you for a specified period of time you choose. These payments consist of a portion of your premium paid and earned interest. There are many different payment options available to choose from, from a fixed number of payments to several which guarantee income payments for the rest of your life. The purpose of the contract is to provide guaranteed, predictable income based on your needs. Part of your plan You may be wondering how you will manage your expenses during retirement. You may wonder if you ll have enough money to meet your everyday living expenses. But keep in mind your hidden expenses, those you may not think of because you don t incur them every day and they are somewhat intangible. Taxes, insurance costs, long-term care, and unexpected or emergency expenses can be significant during retirement. Many people depend on retirement income from Social Security and company-sponsored retirement plans. If these plans do not provide enough income for your everyday living expenses, or escalating healthcare expenses during retirement, a SPIA can supplement that income.

5 Insuring your income Lincoln Insured Income Immediate Annuity offers several advantages, in addition to providing income: Guarantees: If you choose a lifetime income option, you are guaranteed to receive income for the rest of your life. This allows you to focus on living your retirement, instead of worrying about outliving your income. Confidence: A SPIA is backed by the strength and stability of the insurance company, so be sure to consider your options carefully. It s important to choose an insurance company with experience and integrity. Think of it as insuring your retirement income as you would your other valuable assets, such as your home. Protection: Your SPIA is not subject to market volatility and, therefore, your income is protected from any market losses. Regardless of what happens within the financial markets, your SPIA income is guaranteed for the time period you choose, backed by the financial strength of the issuing insurance company. 5

6 Considering your heirs Even if you have enough retirement income to meet your everyday needs, Lincoln Insured Income Immediate Annuity can be a useful tool for you as well. You may be considering the importance of a life insurance policy to help provide for your loved ones. Life insurance can offer a death benefit that passes income tax-free to your beneficiaries. Lincoln Insured Income Immediate Annuity can provide income payments which can be used to fund a life insurance policy. Here s how it works: You purchase Lincoln Insured Income Immediate Annuity Income payments are made to you You pay premiums to life insurance company for a life insurance policy Upon your death, life insurance policy pays a death benefit Your beneficiaries receive the death benefit income tax-free If you are interested in creating your legacy and providing for your loved ones through life insurance, consider using your Lincoln Insured Income Immediate Annuity to help. 6

7 More than just income Lincoln Insured Income Immediate Annuity offers other benefits and can help you enjoy your retirement more. Receiving your money as an income stream, spread out over time, allows you to spread your tax liability out as well. Each payment consists of your premium paid and earned interest. Fully taxable payments If you purchased Lincoln Insured Income Immediate Annuity with qualified money, such as assets from a qualified retirement plan or an IRA, your income payments are entirely taxable for the year you receive them since no taxes have been paid on this money. Partially taxable payments If you purchased Lincoln Insured Income Immediate Annuity with after-tax dollars, only the interest portion of each income payment is taxable as a gain. This can leave you with more spendable income from each payment. A world of options When you purchase Lincoln Insured Income Immediate Annuity, you ll need to select the payment timeframe that is best for you based on your goals. If outliving your income is a concern, there are many lifetime income options to choose from. Of the life options, the life only option offers the highest payment amount. You can choose to have your income mailed to you, or directly deposited into your checking or savings account. Lincoln Insured Income Immediate Annuity provides guaranteed income that is also convenient.

8 Guaranteed income that is also convenient Income for one Period certain Get income for a defined period of time, ranging from five to 20 years. If the annuitant dies before the guaranteed payments are made, the beneficiary will receive the remaining guaranteed payments. Income for two Joint and survivor life Receive a guaranteed income for the life of both the primary annuitant as well as the secondary annuitant. If either dies, payments will continue for the life of the surviving annuitant. Payments stop upon the death of the second annuitant. Life only You might be worried about outliving your retirement income. This option answers the need for lifetime income. Annuity payments are made on their scheduled date, for the life of the contract annuitant. Payments stop when the annuitant dies. Joint and % to survivor life Receive income while both the primary and secondary annuitant are living. If either dies, payments are reduced and a percentage is paid to the surviving annuitant for the rest of their life. Payments stop when both annuitants have died. Life with period certain Get a lifetime income with a built-in guarantee. Annuity payments are made for the life of the annuitant, or a guaranteed period of time ranging from five to 20 years, whichever is longer. If the annuitant dies before the guaranteed payments are made, the beneficiary will receive annuity payments for the remainder of the guaranteed time period. Payments then stop. If the annuitant lives longer than the guaranteed period of time, annuity payments will continue until the death of the annuitant. At that time, payments will stop. Contingent joint and % to survivor life Secure annuity payments for the lives of both the primary and secondary annuitant. If the primary annuitant dies first, payments are reduced and a percentage is paid to the surviving annuitant for the rest of their life. If the secondary annuitant dies first, payments continue without reduction until the primary annuitant s death. Payments stop when both annuitants have died. Life with installment refund Receive income with a return of premium. Annuity payments are made for the life of the Annuitant. If the annuitant dies before the sum of the payments made equals the original purchase premium, the beneficiary will continue to receive payments as scheduled, until the sum paid has reached the premium amount. At that point, payments stop. Joint and survivor life with period certain Get income for the lives of two annuitants with a guarantee period. Payments are made for the life of both the primary and the secondary annuitants, or a guaranteed period of time from 5 to 20 years, whichever is longer. If both annuitants die before receiving the guaranteed payments, the beneficiary receives the remaining guaranteed payments. Payments stop at the end of the guaranteed period of time.

9 Hypothetical example This example uses hypothetical rates to demonstrate sample payouts. Your representative can provide you with an illustration based on current rates. Client: Age: Sam and Lauren Howard Both are 65 years old Situation: Sam and Lauren both recently retired. They have several monthly expenses to consider during their retirement and they also need additional income to pay for a life insurance policy. They have $100,000 to use for income and are considering their SPIA payment options: Period certain* If Sam and Lauren choose a 10-year period certain, they would receive monthly income payments of $ for a period of 10 years. If they both were to die during that 10-year period, their beneficiary would receive the remaining payments until the end of the 10-year period. Life only* For Sam and Lauren to consider:* Premium of: $100, year period certain: Life only: (Sam) Life with 10-year period certain: (Sam) Joint and survivor life: $996.63/month $641.25/month $617.27/month $533.61/month The joint and survivor life option would allow for both Sam and Lauren to continue receiving the retirement income they need to cover their expenses and fund their life insurance policy. If they purchase Lincoln Insured Income Immediate Annuity based on just Sam s life, they would receive $ a month for the rest of Sam s life. However, when Sam dies, all annuity payments stop. Life with period certain* If Sam and Lauren purchase a life with 10-year period certain based on just Sam s life, they would receive $ a month for the rest of Sam s life, or for 10 years, whichever is longer. If Sam dies within those 10 years, Lauren would continue to receive annuity payments until the end of the 10-year period. This would ensure that Lauren would have some income if Sam were to die in the near future. Joint and survivor life* By basing their income payment on both Sam and Lauren s lives, their monthly payment would be $ and it would continue for both of their lives. This means that if either Sam or Lauren were to die, monthly payments would continue to the surviving spouse until their death. *This example and rates are hypothetical for illustrative purposes only. Actual rates will vary. 9

10 Contract provisions and cancellation Lincoln Insured Income Immediate Annuity is a long-term contract designed for guaranteed income with no provisions for unscheduled withdrawals or surrenders. You can cancel your Lincoln Insured Income Immediate Annuity within 20 days after purchase (state variations apply) by sending a written request to Lincoln. We will return your premium upon receipt of your request. Cancelling your contract voids it from the beginning. Also, you should be aware that if you cancel your contract, you may not purchase another Lincoln Insured Income Immediate Annuity during the next six months. Guaranteed income is just the beginning Lincoln Insured Income Immediate Annuity can play an important role in your retirement income portfolio. Whether you need income to fund life insurance, to meet your lifestyle needs, or you want to spread your tax liability out over time, Lincoln Insured Income Immediate Annuity can help. It provides Guaranteed income stream to fit your needs No market risk Tax-advantaged income payments on non-qualified (after tax) money Strength and stability of the issuing insurance company 10

11 Impaired Risk SPIA Do you have a medical condition impacting your life expectancy? If so, you may qualify for an Impaired Risk SPIA. A condition that could disqualify you from life insurance, or result in larger premiums, may actually allow you to be eligible for a larger SPIA income payment. Through a review of your current health or medical conditions, we will determine if you qualify for an Impaired Risk SPIA. No new medical exams are required. If you qualify, you will receive a larger income payment than someone who does not qualify for an Impaired Risk SPIA. You can choose any payment option for your Impaired Risk SPIA except period certain, as this does not rely on life expectancy as a payment factor. To help you determine if you should apply for an Impaired Risk SPIA, consider this question: Have you had, or do you currently have, one of the following conditions? Alzheimer s ALS (Lou Gehrig s Disease) Angioplasty or heart surgery Diabetes with complications Cancer Congestive Heart Failure Emphysema Heart attack or Angina Heart disease Leukemia Liver disease Lymphoma Multiple Sclerosis Muscular Dystrophy Parkinson s disease Stroke Vascular disease Applying for an Impaired Risk SPIA When applying for an Impaired Risk SPIA, you should first discuss your medical conditions with your representative. Then, gather reliable sources of your medical history information (see below) and submit it to your representative. If the insurance company determines you are eligible, your representative will give you a SPIA illustration outlining the specific payment options and income amounts available to you. Review this carefully. Reliable sources of medical history information: Most recent medical examination report by your physician Medical examination report at the time of your diagnosis, particularly within the past five years Medical report reflecting significant conditions preceding the primary condition Medical report reflecting significant hospitalizations, surgeries, or rehabilitations Any relevant test and/or evaluation reports Any psychological evaluation reports Activities of Daily Living (ADLs) or Instrumental Activities of Daily Living (IADLs) Hospital discharge summaries, particularly within the past five years Providing an Attending Physician s Statement (APS) and/or a copy of your full medical file provides the most complete medical information. This list is not all inclusive. Any condition that reduces your life expectancy may allow you to qualify for an Impaired Risk SPIA. 11

12 A tradition of integrity At Lincoln Financial Group, we have a 100-year-old heritage of helping people find solutions to their financial challenges. As one of the largest financial services companies in the nation, we are a proven industry leader in identifying and delivering sophisticated financial strategies and product solutions for the creation, protection, and enjoyment of wealth. We are committed to helping clients redefine their retirement because we don t believe retirement is an end it s an opportunity for everyone to start doing what they were meant for all along. The strength of The Lincoln Financial Group affiliates A company s promises are only as strong as its reputation, integrity, and financial strength. Lincoln Financial Group affiliates have consistently received high marks from independent evaluators including: A.M. Best, Fitch, Moody s, and Standard & Poor s The Lincoln National Life Insurance Company Lincoln Life & Annuity Company of New York A.M. Best A+ (2nd highest of 16) A+ (2nd highest of 16) Fitch AA (3rd highest of 24) AA (3rd highest of 24) Moody s Aa3 (4th highest of 21) Aa3 (4th highest of 21) Standard & Poor s AA- (4th highest of 21) AA- (4th highest of 21) These ratings apply only to the company s claims-paying ability. Ratings as of April Individual issuing companies are separately responsible for satisfying their own financial and contractual obligations Lincoln National Corporation Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are responsible for their own financial and contractual obligations. LFD FAX RP 02/07 Order FA-CORE-SPIA Important Disclosures. Please Read. Income payments and the rates used to determine the payments in this material are hypothetical, for illustrative purposes only, and not representative of any actual contract. Lincoln Insured Income Immediate Annuity single premium immediate annuity is issued on contract form , or state variation by The Lincoln National Life Insurance Company, Fort Wayne, IN. The Lincoln National Life Insurance Company is not authorized nor does it solicit business in the state of New York. 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. Contractual obligations are backed by the claims-paying ability of the Lincoln National Life Insurance Company. Lincoln Insured Income Immediate Annuity single premium immediate annuity contracts sold in New York on contract form NY are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY. Contractual obligations are backed by the claims-paying ability of Lincoln Life & Annuity Company of New York. Product features subject to state availability. The exact terms of the annuity are contained in the contracts and any attached riders, which will control the issuer s contractual obligations. For additional information about the annuity, reference the illustration used or contact your representative. 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. Not a deposit Not FDIC-insured Not guaranteed by any bank or savings association Not insured by any federal government agency May go down in value