©2007 lincoln national corporation for agent or broker use only. not for use with the public....

©2007 Lincoln National Corporation

For agent or broker use only. Not for use with the public. LCN0708-2006690 (FAX-0365-07) 8/07

Lincoln Living IncomeSM Advantage

Presenter Name TitleDate

Lincoln fixed indexed annuities with the Lincoln Living IncomeSM Advantage

For agent or broker use only. Not for use with the public. LCN0708-2006690

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Agenda items

• Meeting retirement challenges with fixed indexed annuities

• Income planning with your clients

• Key advantages of the Lincoln Living IncomeSM Advantage

• How does it work?

• Considerations and references


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Retirement challenges

Challenge:•Market volatility

•Maintaining current lifestyle

Lincoln fixed indexed annuities offer•Locked in interest earnings

•The power of zero

•Fixed and indexed account options


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Retirement challenges

Challenge:• Income

Lincoln fixed indexed annuities offer•Annuitization options

•Lincoln Living IncomeSM Advantage


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Income planning

• Retirement may last longer than expected

• Do your clients want flexibility and control over income?

• How much will Social Security and other traditional income sources provide?


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Who is the client?

Clients:

• Focused on retirement planning and future income needs

• Who think or know they will need retirement income

• Who want a level of certainty about their income

• Wanting additional flexibility to start, stop, or adjust their payments based on their income needs


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Why Lincoln Living IncomeSM Advantage?

Key Benefits

• Provides guaranteed income payments for life1 if certain requirements are met

• Clients retain control over payments and contract

• Have the flexibility to start, stop, and skip payments

• Early planning can result in higher payment amounts

1Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.


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How does Lincoln Living IncomeSM Advantage work?

• Lifetime Benefit Amount = Guaranteed

payment amount

• Lifetime Benefit Factor = Payment percentage

• Lifetime Benefit Base = Income base


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How does Lincoln Living IncomeSM Advantage work?

• Guaranteed, even if contract value is depleted to $0,

assuming no other withdrawals are made

• Can begin taking payments any time during the year,

after the 12-month waiting period

• Not subject to any surrender charge or Market

Value Adjustment

Guaranteed payment amount =

Payment percentage x Income base


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• Based on the attained age of the covered life* at time of

first payment, and

• Number of complete years between rider effective date

and beginning of income payments

• Once client takes a withdrawal after the waiting period, the payment percentage is locked in.

*In the case of joint contractowners, the payment percentage is based on the age of the younger covered life.




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• Withdrawals during the waiting period reduce the income base

• Recalculated on each contract anniversary

• Greater of the current contract value and the previously calculated income base

• Any withdrawal over the guaranteed payment amount is considered an additional withdrawal

• Additional withdrawals will reduce the income base, and therefore, subsequent guaranteed payment amounts




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Other withdrawals

Contract’s annual free withdrawal• Up to 10% of your contract value

• Your Lincoln Living Income Advantage payments count towards this 10% annual free withdrawal

Additional Lincoln Living Income Advantage withdrawals• Any amount over the annual guaranteed payment amount

• Withdrawals in excess of the guaranteed payment amount will significantly reduce future payments. The income base and the guaranteed payment amount are reduced on a pro rata basis.

• Amounts over the 10% may be subject to surrender charges and Market Value Adjustment


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Retirement income planning opportunity

1. Determine future income needs

2. Consider age at that time and determine Lincoln Living IncomeSM Advantage payment percentage

3. Estimate accumulation needed with assumptions for future crediting rates

4. Work backwards to determine savings amount


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Number of years between electing Lincoln Living IncomeSM Advantage and when payments begin

Age when income payments begin

Less than 5 years

5 – 10 years

More than 10 years

50 – 54 4.0% 5.0% 6.0%

55 – 59 4.5% 5.5% 6.5%

60 – 64 5.0% 6.0% 6.5%

65 – 69 5.5% 6.5% 7.0%

70 – 74 6.0% 7.0% 7.5%

75 – 79 6.5% 7.5% 8.0%

80 – 84 7.0% 8.0% 8.5%

85 – 89 7.5% 8.5% 9.5%

Retirement income planning opportunity


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Considerations

Cost is 0.40% annually• After the surrender charge period, the fee may vary annually but will

never exceed 1.0%

• Assessed against the contract value, beginning with the first rider anniversary, after interest is credited (charge may exceed amount of interest credited)

• Taken from Fixed Account.

• When no money is in the Fixed Account, then taken pro rata from the indexed accounts where money is allocated

• Assessed every year, regardless of one-year or two-year indexed term

Add at issue or on contract anniversary, subject to age limitations and state availability

Not commissionable

Withdrawals during waiting period are subject to contract terms and will reduce the income base


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Considerations

Issue ages: 50 – 85

Covers single or joint lives • If a single life, that person must be the contractowner

and annuitant

• If the contractowner is non-living (i.e. a trust), the covered life must be the annuitant

Joint covered lives must be spouses at issue• The covered life must be the contractowner and annuitant

• The joint covered life must be the joint contractowner or primary beneficiary

Covered lives cannot be changed after issue. Change of ownership terminates the rider

Contractowner can cancel the rider, but only after it’s been in force for at least five years


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The death benefit

Upon the death of the individual contractowner or joint contractowners, any remaining contract value will be paid out according to contract provisions.

A spousal beneficiary who is a covered life may also continue the contract along with the rider benefits.


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Where to find information and forms

Visit www.lfd.com • Marketing materials and product specs

• Order forms

Application (BJF-05650, plus state variations)

Rider election form, or state variations


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Important information

This material was prepared to support the promotion and marketing of fixed indexed annuity 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.


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Important disclosure

A fixed indexed annuity is intended for retirement or other long-term needs. It is intended for a person who has sufficient cash or other liquid assets for living expenses and other unexpected emergencies, such as medical expenses.

Lincoln New DirectionsSM single premium deferred annuity (contract form 94-523, or state variation) is a fixed indexed annuity issued by The Lincoln National Life Insurance Company and may not be available in all states (may be referred to as “equity indexed annuity” in certain states). Lincoln OptiChoiceSM flexible premium deferred annuity (contract form 05-606, or state variation) is a fixed indexed annuity issued by The Lincoln National Life Insurance Company and may not be available in all states (may be referred to as “equity indexed annuity” in certain states). The Lincoln National Life Insurance Company is not authorized nor does it solicit business in the state of New York. Contracts 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. Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company. The Lincoln Living IncomeSM Advantage Guaranteed Lifetime Withdrawal Benefit (GLWB) rider (form AE-217 or state variation) is sold in conjunction with Lincoln New Directions and Lincoln OptiChoice fixed indexed annuities and may not be available in all states.


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Important disclosure

Withdrawals of taxable amounts from an annuity are subject to income tax, and withdrawals prior to age 59½ may be subject to a 10% federal penalty tax.

Purchase of the contract through a qualified plan does not provide any additional tax deferral benefits beyond those already provided through the plan. If your client is purchasing the contract through a qualified plan, they should consider purchasing it for its death benefit, annuity options, and other non-tax related benefits.

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.


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Questions?

©2007 lincoln national corporation for agent or broker use only. not for use with the public....

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