Variable universal life insurance with a death benefit and account value growth potential
Variable universal life insurance (VUL) is designed for individuals or business owners who need life insurance protection plus tax-advantaged account value accumulation with exposure to the potential upside of market investing. VUL also has an account value that can grow tax deferred and you can borrow against, should the need arise.
Distributions are taken through loans and withdrawals, which reduce your policy’s cash surrender value and death benefit and may cause the policy to lapse. Loans are not considered income and are tax free. Withdrawals and surrenders are tax-free up to your cost basis, provided your policy is not a modified endowment contract (MEC). An MEC policy is one in which the life insurance limits exceed certain high levels of premium, or the cumulative premium payments exceed certain amounts specified under the Internal Revenue Code. For policies that are MECs, distributions during the life of the insured, including loans, are first treated as taxable to the extent of income in the contract, and an additional 10% federal income tax may apply for withdrawals made prior to age 59½.
What does Lincoln AssetEdge® Exec VUL (2009) offer?
- Lincoln AssetEdge® Exec VUL is a variable universal life insurance policy with a death benefit that protects your business from the financial impact of the death of an owner or key person.
- It can also be used as a powerful recruitment tool when used in a variety of nonqualified plan designs.
- With Lincoln AssetEdge® Exec VUL, you can enjoy possible increases in account value over time that could enhance your business succession plan.
- You can take advantage of maximized early year cash surrender value for your balance sheet.
What can Lincoln AssetEdge® Exec VUL offer your business?
- An asset for your executive benefits strategy: Lincoln AssetEdge® Exec VUL can be used to fund your executive bonus insurance plan, split dollar plan or other nonqualified deferred compensation plan.
- A component of your business continuity strategy: Use to fund a buy-sell agreement, which protects your business in the event of the death, disability or retirement of a partner or co-shareholder.
- Account value growth potential: Helps you accumulate tax-deferred account value over time.
- Enhanced account value: Through the Enhanced Surrender Value Rider, which is automatically included when your policy is issued, a separate enhanced surrender value is calculated in the first five years of the policy. You can choose either a high or low level of enhanced surrender values, which impacts the cost of the rider. The low option waives the surrender charges in the first five years. The high option waives the surrender charges and replaces a portion of the administrative charges that have been taken out of the policy in the first five years.
- Flexible income for future objectives: Using the accumulated account value, you can elect to receive supplemental income as you need it, for retirement or other purposes.
- Tax advantages: Beneficiaries can receive a death benefit free of federal and state income taxes. It can also be used as supplemental income as you need it, for retirement or other purposes.
- The freedom to invest in a diverse portfolio: You have market-driven growth potential for your account value through more than 70 investment options from our Elite Series of Funds. Lincoln VUL gives you the flexibility, protection and tax advantages of life insurance with a range of fixed and variable investment options.
Lincoln AssetEdge® Exec VUL includes:
- Automatic rebalancing. This optional feature automatically adjusts the values allocated to each account to match the percentages you specified on the policy application to fit your goals and risk tolerance. You may rebalance on a quarterly, semiannual or annual basis. You may elect this option at any time; however, it's not available for funds in the Fixed Account or with dollar cost averaging.
Dollar cost averaging. This optional program lets you systematically allocate specified dollar amounts from the money market fund or the Fixed Account to the variable accounts. By allocating funds on a regular basis, as opposed to a one-time allocation, you may reduce the average cost per unit over time.
If this option is elected from the Fixed Account, it must be requested at issue; however, it may be elected at any time from the money market fund. It’s not available in conjunction with automatic rebalancing. Dollar cost averaging neither assures you of a profit, nor protects against loss in a declining market. It involves continuous investment in securities, regardless of fluctuating price levels. You need to consider if you'll be in a position to continue purchasing through periods of low price levels.