Advisors Blog

Below is the full text of the recent Lincoln Financial memo with transition rules and deadlines. For a PDF version of this announcement, click here.

Lincoln MoneyGuard® II – Introducing Expanded Payment Options and Pricing Changes in California and Hawaii

Effective November 20, 2017, Lincoln MoneyGuard® II will be introducing expanded payment options and pricing changes for new sales of the product in California and Hawaii.

Background

Lincoln has a long-standing commitment to helping you protect client wealth from long-term care expenses with innovative solutions appropriately priced for market conditions.

Upholding this commitment means creating new opportunities for our partners to grow their business and reach new customers. It also requires us to proactively manage our business in today’s persistently low interest rate environment. To achieve this balance, Lincoln makes fair and responsible adjustments when appropriate to provide value to our policy owners, partners and shareholders, and operate responsibly for the long-term.

Market conditions have been challenging, yet Lincoln MoneyGuard® continues to grow. This is because we are committed to being able to offer your clients a flexible product that offers benefit and payment options that fit their specific needs.

Expanded Payment Options

Due to customer demand, we are expanding our payment options to provide more financial flexibility to clients. Our new expanded payment options will give clients greater flexibility to purchase a policy at an earlier age and spread their payments over a longer period of time.

Listed below is the availability for the new expanded payment options;

• Clients ages 40 to 54 will now have the option to fund up to age 65, potentially for as long as 25 years.
• Clients between the ages of 55 and 72 will continue to have a choice of payment options up to 10 years.
• Clients between the ages of 73 and 79 will have a new schedule of payment options. Starting at age 73, clients can choose options up to 9 years, grading down by one year at each subsequent age, to 3 years of payments at age 79.
• Single premium payment options are still available.

Pricing Change

The pricing changes identified below were made following a thorough and in-depth analysis of all factors influencing pricing, including those related to the persistently low interest rates. These are the first pricing changes since the product was introduced in early 2014 and will result in a pricing increase or decrease, depending on each client’s specific situation.

• Overall, the pricing is increasing by an average of 10%
• In our core markets:
  • Single pay premium rates will increase by a range of 2% to 11% with an average increase of 10%
  • Flexible premium rates will increase by a range of 8% to 18% with an average increase of 14%

At certain ages, this pricing adjustment may alter the benefit level or rider combinations available for sale. For situations where rider/inflation combinations are no longer available, there are alternative options. Contact your Lincoln wholesaler to learn more.

Existing policy owners are not affected, because one of the product’s unique benefits is that all rates and charges are fully guaranteed, assuming all premiums are paid as scheduled and no loans or withdrawals are taken for the life of the policy.

Lincoln MoneyGuard® insurance continues to be the competitively priced life/long-term care hybrid solution that provides clients benefits even if they never need long-term care.

Transition Guidelines

Reflected below are the Transition Guidelines for this rollout:

• For applications to qualify for the current Lincoln MoneyGuard® II (2015) pricing:
  • California: The fully completed Part 1 for Lincoln MoneyGuard® II (2015) and Ticket must be signed, dated, and received in good order by Lincoln’s home office by November 17, 2017, 11:59 PM EST.
  • Hawaii: The completed ticket and one other required point of sale form for Lincoln MoneyGuard® II (2015) must be signed, dated, and received in good order by Lincoln’s home office by November 17, 2017, 11:59 PM EST.
• For pending business, after November 17, 2017 Lincoln will accept a written request and a revised projection of values to change to Lincoln MoneyGuard® II (2017).
• For issued or placed business, normal internal replacement guidelines apply. Rewrites will not be accepted.
• As a reminder, the standard MoneyGuard® Rules are: Once a ticket is submitted, the Personal History Interview (PHI) must be completed within 60 days of submission. In addition, the case must be placed within 90 days of the PHI (unless medical records are required). If these conditions are not met, the case will be closed out. If a case is reopened, a new ticket must be submitted, and the case will be subject to the premium rates in effect at that time.
• Advisors who are not properly credentialed (licensing/appointment/etc.) to solicit business when the paperwork is submitted will be subject to the premium rates in effect on the date when the advisor becomes properly credentialed and resubmits the paperwork.

Illustration Availability

Effective October 16, 2017, the Lincoln DesignIt^SM (version 38.0E) and WinFlex Illustration systems will be updated to reflect the new rates. During the transition period both current and new rates can be run. However, no tickets for Lincoln MoneyGuard® II (2017) may be received prior to November 20, 2017.