August 2009

Questions & Comments

We’re here to help!

Contact your Lincoln Financial Distributors® representative
with questions or for additional information about Lincoln’s competitive edge.

877 533-0118

Since 1905, Lincoln Financial Group® companies have been helping people find solutions to financial challenges. With a heritage of more than 100 years, we have the experience to perform and deliver.

For the month of August, we’ll be doing a recap on private and traditional premium financing. We will also touch base on Lincoln’s underwriting strengths, our Lincoln LifeElementsSM Level Term life insurance and Lincoln OptiChoiceSM Fixed Indexed Annuity products.

Private premium finance ideas

Take advantage of the current low IRS AFR (the applicable federal rate) with private split dollar
The IRS interest rate for intrafamily loans is near its historic low. Loans for up to three years are 0.82%, and loans from three years to less than nine years must charge a 2.76% rate (July AFR). Clients with limited annual gifting capacity may use split dollar loans and lock in the current interest rate on amounts advanced now for either up to three or nine years, and limit the amount of annual gifts at these low interest rates. A variety of life insurance strategies can take advantage of these low intrafamily loan rates.

Combining the Lincoln LifeReserveSM Indexed UL with traditional premium financing
Some indexed UL loan illustrations show multimillion dollar returns possible by borrowing to make premium payments at 5% while consistently earning an 8% indexed return. But how realistic are these projections? How do you stress test a particular loan scenario? How do you compare alternatives?

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Lincoln LifeElements Level Term life insurance

  • It’s affordable
    – Some of the most competitive rates available
    – Life insurance coverage time periods to suit your clients’ needs — from 10, 15, 20, or even 30 years. Death benefits start at $250,000.
  • It’s flexible
    – Death benefit protection for your clients and those they care about. Additional riders to address client needs in case of terminal illness, total disability, or children who need coverage.
  • It’s convertible to permanent insurance
  • Competitive underwriting
    – Prostate cancer
    – Breast cancer
    – Diabetes
    – Cardiac HX with bypass using LIMA
  • Standard nonsmoker risk classification available to tobacco-using individuals who:
    – Use chewing tobacco, pipe, or cigars
    – May test positive for nicotine by urine sample
    – Meet all the standard criteria and other criteria as described in underwriting guidelines
    – Have not used cigarettes in the past 12 months
“Responsibly aggressive” underwriting philosophy
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Lincoln OptiChoiceSM Fixed Indexed Annuity

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 are 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.

  • Choice of Fixed Account and three indexed accounts for growth opportunities
  • Five-year surrender charge schedule (9%, 8%, 7%, 6%, 5%)
  • Protection of full accumulation value death benefit
  • Nursing home and terminal illness riders
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Here are some of the latest materials you can use to advertise your business and Lincoln products!

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Premium Financing — The Solution of Choice for Select Clients flier

Order code: ADV-LIF-FLI006

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Lincoln LifeElementsSM Level Term Life Insurance flier

Order code: TO-FLI010

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Lincoln Individual and Survivorship Products underwriting guidelines brochure

Order code: LIF-UW-BRC017

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Lincoln OptiChoiceSM with Lincoln Living IncomeSM Advantage flier

Order code: FA-OC5-RST007

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Lincoln OptiChoiceSM Fixed Indexed Annuity client guide

Order code: FA-OC-BRC392

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Important disclosures. Please read.

Lincoln LifeElementsSM Level Term is issued on policy form TRM5065 and state variations by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. Contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company.

Policies sold in New York are issued on policy form TRM5065N by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer. Contractual obligations are backed by the claims-paying ability of Lincoln Life & Annuity Company of New York.

Lincoln LIfeReserveSM Indexed UL is issued on policy form UL5041 and state variations by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. In some states, contract terms are set out and coverage may be provided in the form of certificates issued under a group policy issued by The Lincoln National Life Insurance Company to a group life insurance trust. Contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company. Not available in New York or Pennsylvania.

A fixed indexed annuity is intended for retirement or other long-term needs. It is intended for a person who has enough cash or other liquid assets to pay for living expenses and unexpected emergencies, such as medical bills. A fixed indexed annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments, or index. The index used is a price index and does not reflect dividends paid on the underlying stocks.

Lincoln OptiChoiceSM flexible premium deferred fixed annuity (policy form 05-606, or state variation) is a fixed indexed annuity issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. Contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company.

Product may be referred to as “equity indexed annuity” in certain states. The contract/certificate 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.

The exact terms of the annuity are contained in the contracts and any attached riders, which will control the issuing company’s contractual obligations. For more information about the annuity, please also read the Disclosure, Facts At-A-Glance, or contact your Lincoln representative.

Income taxes are due upon withdrawal and if withdrawn before age 59½, a 10% federal penalty tax may apply. Withdrawals and surrenders may be subject to surrender charges and a market value adjustment.

There is no additional tax-deferral benefit for contracts purchased in an IRA or other tax qualified plan, since these are already afforded tax-deferred status.

Product and features are subject to state availability. Limitations and exclusions may apply. Lincoln OptiChoiceSM Fixed Indexed Annuity is not available in New York.

This material was prepared to support the promotion and marketing of insurance 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.

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.

©2009 Lincoln National Corporation

Lincoln Financial Group
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Not a deposit Not FDIC-insured Not guaranteed by any bank or savings association May go down in value
Not insured by any federal government agency

LCN0907-2032599 LIF-GEN-09-0006_LIF-AULF-eNW001_Z01