Vol. 9, Issue 4, April 20, 2015 Fixed Annuity Revisit Lincoln New Directions Fixed Indexed Annuity for Wealth Preservation and Growth Protection Lincoln New Directions fixed indexed annuity offers a stable return with the Fixed Account, and the potential for additional earnings with the indexed interest accounts. Clients can allocate their premium to the Fixed Account bucket earning a guaranteed interest rate for a set period of time (six or eight years initially), and/or to the Performance Triggered Indexed Account bucket or the 2- Year Point-to-Point Indexed Account bucket with the potential for earnings tied to an outside index. Clients can be comfortable knowing their principal will be preserved while having growth potential. Explore Lincoln New Directions fixed indexed annuity with your clients using the updated Wealth Preservation and Growth Protection flier. Headlines Revisit Lincoln New Directions QLAC Status Available with Lincoln Deferred Income Solutions SM Annuity QLAC At-A-Glance Lincoln Lifetime Income SM Edge in Puerto Rico Competitive Intelligence Corner: 4Q14 Sales Disclosure Statements Updated May 2015 Forms Release IRA Contribution Reporting Click Here to view the flier or order it from the Lincoln Fulfillment Center. Order code: FA-NDBK-FLI001 ACORD Form for IRA Rollovers Top 5 NIGOs Reg 60 Guide Updated Updated Buyer s Guide Requirements: CO, GA, HI, NV, NC, SC and TX State Insurance Licensing and Training Requirements Product and indexed accounts subject to state availability. The Lincoln Leader contains product and business implementation information for Lincoln fixed annuities. Products and features subject to state availability. Certain products are only available in select distribution channels. Check your selling agreement for availability. For Agent/Broker Use Only Not To Be Used With The General Public. Page 1 of 8
QLAC Status Available with Lincoln Deferred Income Solutions SM Annuity As previously announced, Lincoln Deferred Income Solutions SM Annuity is available as a Qualifying Longevity Annuity Contract (QLAC) for IRA Rollovers, as defined under Q&A-17 of section 1.401(a)(9)-6 of the Income Tax Regulations. An updated Q&A is available for QLAC business and is available from producer websites and from the Lincoln Annuity Sales Desk. The Q&A addresses such topics as: Death benefit offered Inflation protection Option to change the Income Start Date Forms required when electing QLAC status Additional premium requirements Lincoln Deferred Income Solutions SM Annuity QLAC At-A-Glance Issue Ages Ages 18 80 Deferral Period Payment Option Premium Information Illustrations Required with Application Electronic Business Minimum of 13 months up to a maximum of 40 years or to age 85 Single Life Annuity with Cash Refund Minimum initial premium: $10,000 Maximum premium: the lesser of $125,000 or 25% of all traditional IRA account balances QLAC status is available with illustrations from both the ForeSight Annuity Illustration System and CANNEX. NOTE: CANNEX firms must request QLAC status. Premium Requirement Verification Statement (Form AN10910) Illustration Firms that submit business via an electronic order entry system can generate the application and the Premium Requirement Verification Statement for QLAC with these choices elected and the total expected premium amount less than or equal to $125,000: Product = DIA Plan Type = Traditional IRA Payment Option = Life w/cash Refund Beginning May 18, 2015: The QLAC election field is scheduled to be added to the Annuity Order Entry System in the Rider section. QLAC should be selected in the Rider section in addition to completing the fields shown above. For Agent/Broker Use Only Not To Be Used With The General Public. Page 2 of 8
Lincoln Lifetime Income SM Edge Rider Changes Puerto Rico Effective April 22, 2015 The following changes will be made to new elections of Lincoln Lifetime Income SM Edge Rider available with Lincoln fixed indexed annuities offered in Puerto Rico: Joint Life Income Factors will be increased by.25% for all age bands; Single Life Income Factors have not changed. The Nursing Home Income Factor provisions have been updated. The maximum Rider Charge will be increased from 1.00% to 1.50%. The current cost of the Rider has not changed and is still 0.95%. The stand-alone Income Calculator is available to illustrate the GLWB Rider; the ForeSight Annuity Illustration System will reflect the new Rider beginning May 1, 2015. Note: this version of the Rider was made available in the majority of states in January 2015. Transition Guidelines: Paper applications, electronic business order entry tickets, and post-issue election forms must be signed (as applicable), dated, and received at Lincoln on or before 4:00 p.m. E.T. on Tuesday, April 21, 2015 to receive the prior version of Lincoln Lifetime Income SM Edge. Eligible applications must be in good order and fully funded within the applicable rate hold period or the business will be returned. For example: - Pending 1035s and transfers (including qualified trustee-to-trustee transfers and clientinitiated transfers from pension plans such as 401(k)s, 403(b)s, etc.) received on Tuesday, April 21, 2015 will have until Tuesday, April 28, 2015 to be funded. If not funded by the deadline, a call will be made to the representative to determine if the application should be issued as the new version or be returned. - Cash with application business (including cash, client/agent-initiated transfers that are not from qualified employer plans, or transfers of noninsurance accounts submitted through the ACORD form) received on Tuesday, April 21, 2015 will have until Monday, June 22, 2015 to be in good order and fully funded. If not funded by the deadline, a call will be made to the representative to determine if the application should be issued as the new version or be returned. Paper applications, electronic business order entry tickets, and post-issue election forms received after 4:00 p.m. E.T. on Tuesday, April 21, 2015, regardless of the application signed date or electronic business transmission date, will receive the new version of Lincoln Lifetime Income SM Edge. For Agent/Broker Use Only Not To Be Used With The General Public. Page 3 of 8
Competitive Intelligence Corner Competitive Intelligence Update: A review of industry fixed annuity sales for fourth quarter (4Q) 2014. Total fixed annuity sales for 4Q 2014 were $23.9 billion, up 6% from third quarter 2014. Year-to-date (YTD) sales were $95.7 billion, up 13% from 4Q 2013 YTD. Overall annuity sales (including variable, fixed, fixed indexed and income annuities) are up 3% YTD, with fixed annuity sales being the driver of annuity sales growth in 2014. Fixed index annuity sales hit a new record at $48.2 billion for 2014 up 23% from 2013. Sales in the fourth quarter were $12.2 billion, and up 4% from third quarter. The Independent Agent channel still makes up the largest portion of fixed indexed annuity (FIA) sales by channel. The Independent Broker/Dealer and Full Service National Broker/Dealer channels are the fastest growing channels of FIA sales. Income annuity sales were strong in 2014. Deferred Income Annuity (DIA) sales continue to grow but at a slower rate than the past two years. Growth continuing in the Independent Agent, Bank, and Independent Broker/Dealer channels. The majority of DIA sales are still coming from the Career and Full Service National Broker /Dealer channels where growth is slowing. DIA sales increased 22% year over year with a record $2.7 billion in sales for 2014. Single Premium Immediate Annuity (SPIA) sales were level in 4Q 2014 compared to the previous quarter but are up 17% year over year. Source: LIMRA s U.S. Individual Annuity Sales Survey Participant's Report for Q4 2014. The Lincoln Market Research & Analysis Annuities Unit provides general information on a competitor s annuity products to help producers understand product differences, and should be viewed as informational only. Information is current as of April 2014. This information is from public sources deemed reliable from peer group companies. Although every attempt has been made to ensure accuracy of the information provided, it cannot be guaranteed. Please note that this information does not include all product details. For information regarding all of the contract charges and fees, including applicable surrender charges, contract fees and other details, refer to the company s product information and disclosure. For Agent/Broker Use Only Not To Be Used With The General Public. Page 4 of 8
Disclosure Statements Updated May 2015 Forms Release All fixed indexed annuity product Disclosure Statements have been enhanced as part of the upcoming May Forms Release. These enhancements include: Added a table of contents Reduced the total number of pages included in the Disclosure Statement The indexed account examples were moved to the appendix Reduced the number of state variations Removed all client or agent elections from the Disclosure Statement (these elections will be included on the application supplements) Note: Returning the completed Disclosure Statement Signature Page is still required with paper applications. The following forms have been updated and will be available from the Lincoln Forms Tool on May 18, 2015 (unless noted otherwise). The standard 60-day transition period applies. Form Number Description Rev Date Comments Application Supplements (and state variations) AN07263 Fixed/Indexed Deferred Annuity Supplement 02/15 AN10915-DFNY Fixed/Indexed Deferred Annuity Supplement - NY 02/15 AN07265 Lincoln Insured Income SM Supplement 02/15 AN10915-SPNY Lincoln Insured Income SM Supplement - NY 03/15 AN10013 Lincoln Long-Term Care SM Supplement 02/15 AN10246 Lincoln Deferred Income Solutions SM Supplement 03/15 AN10915-ND Lincoln New Directions Fixed Indexed Supplement 02/15 AN10915-OC Lincoln OptiChoice SM Fixed Indexed Supplement 02/15 AN10915-OP Lincoln OptiPoint Fixed Indexed Supplement 02/15 Added client or agent elections from applicable Disclosure Statements and created product-specific Application Supplements. Product Disclosures (and state variations) FA-03459 Lincoln New Directions Disclosure Statement 03/15 Added table of contents and reduced the total FA-03877 Lincoln OptiPoint Disclosure Statement number of pages. Moved indexed account examples 03/15 to appendix. Combined several state variations. AN10112 Lincoln OptiChoice SM Disclosure Statement 03/15 Removed all client or agent elections. Other (Currently available) BJ-05540 Deferred Annuity Exception Request Questionnaire 03/15 Updated language regarding the use of information in review of suitability and purchase of the annuity BJ-05541 Income Annuity: Exception Request Questionnaire 03/15 Updated maximum premium to $2 Million. AN10910 Premium Requirement Verification Statement QLAC 03/15 Updated post-issue information. Post Issue Customer Service AN07097 Substantially Equal Periodic Payment 03/15 Added the following disclosure: "Important Note Regarding IRA Rollovers. The one-rollover-per-year AN07099 Systematic Withdrawal Service Election 03/15 limitation will be applied on an aggregate basis to all AN07301 Annuity Distribution Request 03/15 IRAs you own. You cannot make a tax-free IRA-to-IRA rollover if you have made such a rollover involving AN10100 Lincoln Lifetime Income SM Distribution Request Form 03/15 any of your IRAs in the current tax year. This AN10224 Systematic Employer Markets Distribution Request 04/15 limitation does not apply to direct trustee-to-trustee transfers." Added New Jersey tax language. AN07119 RMD Withdrawal Form 03/15 Added New Jersey tax language. For Agent/Broker Use Only Not To Be Used With The General Public. Page 5 of 8
IRA Contribution Information: Form 5498 Tax Reporting Form 5498 is used to report regular and rollover contributions to IRAs, including Traditional IRAs and Roth IRAs, and is for informational purposes only. It does not need to be filed with the client s tax return. Per IRS regulations, Lincoln must mail the Form 5498 no later than May 31 st of the year following the contribution year. Since clients can make an IRA contribution until the IRS tax filing deadline (April 15, 2015) for the previous tax year, Lincoln does not send out the 2014 Form 5498s until May 2015. Note: Trustee-to-Trustee transfers are not reported via a Form 1099R or a Form 5498. Reminder: ACORD 951 Form Must Be Submitted for IRA Rollover Client- Initiated Transfers The ACORD 951 Form must be submitted to Lincoln for client-initiated transfers of qualified employer funds rolling over to an IRA. Complete the Special Instructions section of the application, and indicate that the client has initiated the transfer request. This is the proper way to indicate that Lincoln should not initiate the transfer of the funds. TOP 5 NIGOs The delays experienced in issuing annuity contracts are often caused by applications received not in good order (NIGO). Here are the most recent top five NIGO issues: Replacement form needed Reason for replacement not indicated Additional suitability information needed Additional beneficiary information needed Answers to replacement questions do not match For help in completing new business paperwork, contact the Annuity Sales Desk. For Agent/Broker Use Only Not To Be Used With The General Public. Page 6 of 8
Updated How To Guide New York Reg 60 Forms An updated version of the How to Complete the New York Regulation 60 Paperwork Agent Guide is now available from Lincoln producer websites on the Life and Annuity Compliance Guidelines page. This latest revision reflects some minor updates and a reminder regarding the licensing requirements. For more information please contact your Lincoln representative. Updated Buyer s Guide Requirement for Colorado, Georgia, Hawaii, Nevada, North Carolina, South Carolina and Texas (reprint) The new version of the Buyer s Guide (Buyer's Guide to Deferred Fixed Annuities, Form AN10712) should be presented to the client at the time of solicitation of fixed and fixed indexed annuities in these states: Colorado, Georgia, Hawaii, Nevada, North Carolina, South Carolina, and Texas. The update Buyer s Guide will be implemented as follows: Hawaii, Nevada, North Carolina, South Carolina and Texas: The updated Buyer s Guide is now available in sales kits and can be downloaded from the Lincoln Forms Tool. Colorado and Georgia: The updated Buyer s Guide is already available. Colorado illustrations have been updated to include a reminder to provide the product disclosure or prospectus to the client at solicitation. State Insurance Licensing and Training Requirements Annuities and LTC Annuities: The NAIC Suitability in Annuity Transactions Model Regulation mandates general annuity and product-specific training requirements. States may have modified these requirements or have additional state-specific training requirements. Refer to the Lincoln Individual Annuity Products State Insurance Licensing and Training Requirements chart ( Annuity Requirement chart ) for information on requirements, key deadlines and any reciprocal agreements with other states. Long-Term Care (LTC): Lincoln Long-Term Care SM Fixed Annuity can only be sold by representatives who are licensed and appointed to sell long-term care insurance and annuities. Certain states require additional training for representatives selling LTC policies. Refer to the Lincoln Long-Term Care Hybrid Products State Insurance Licensing and Training Requirements chart for information on state-specific requirements and key deadlines. These charts are available online from the Life and Annuity Compliance page of Lincoln producer websites, and represent Lincoln s interpretation of the current state law. For Agent/Broker Use Only Not To Be Used With The General Public. Page 7 of 8
Looking for an Article? The Index of Articles for past issues of the Fixed Annuity Lincoln Leader can be found on the Lincoln Leader archive page of producer websites. Not a deposit Not FDIC-insured Not insured by any federal government agency Not guaranteed by any bank or savings association May go down in value Products and features subject to state availability. Click Here to view the State Availability Chart. Click Here to view the Bank State Availability Chart. Fixed Annuity Contact Information (updated December 2014) Sales Desk Product questions/ Sales ideas/ Illustrations/ Website training Operating hours: 8:00AM 7:00PM ET Partner Solutions Appointments/ Contracting/ Compensation Operating hours: 8:00AM 6:00PM ET Annuity Sales Desk Agent Use Only Sales Desk: 888-895-4830, Option 2 FixedAnnuitySales@LFD.com Appointments/Contracting Call Center: 800-238-6252, Option 1, Option 2 New Contracting Paperwork Submission: Contracting@LFG.com Fax: 603-226-5311 NAIC Training Questions: AskAnnuityNAIC@LFG.com Appointment Status Updates: LicensingStatus@LFG.com Compensation Call Center: 800-238-6252, Option 1, Option 1 Commissions@LFG.com Some of these products are only available in select distribution channels. Check your selling agreement for availability. Lincoln fixed, fixed indexed and income annuities are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. The "contract" may be referred to as a policy or "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 subject to the claims-paying ability of The Lincoln National Life Insurance Company. Contracts sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY. The contractual obligations are subject to the claims-paying ability of Lincoln Life & Annuity Company of New York. LCN-1174961-041515 New Business and Post-Issue Operating hours: 8:30AM 5:15PM ET Contact Centers For agent/client use Operating hours: 8:00AM 7:00PM ET (8:00AM 5:30PM ET Fridays) FAX Numbers New business: 260-455-0271 (fax) Post-Issue: 260-455-0263 (fax) Pre-Issue Good Order (GO) Team Telephone number: 888-468-3474 Forms Submission: AnnuityForms@LFG.com Overnight Servicing Address Lincoln Financial Group Individual Annuity Operations 1300 South Clinton Street Fort Wayne, IN 46802-3506 Servicing Address Lincoln Financial Group P.O. Box 2348 Fort Wayne, IN 46801-2348 Fixed and Fixed Indexed Annuity: 888-916-4900 Lincoln Insured Income, Lincoln Deferred Income Solutions, Lincoln SmartIncome and annuitization: 800-487-1485 x8529 Lincoln Long-Term Care: 877-534-4636 Newsletter compiled by Lincoln Insurance and Retirement Solutions, Product and Distribution Support. Please send any comments or suggestions regarding the Fixed Annuity Lincoln Leader newsletter to: Ellen.Hollis@LFG.com 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. 2015 The Lincoln National Life Insurance Company, Fort Wayne, IN 46801 For Agent/Broker Use Only Not To Be Used With The General Public. Page 8 of 8