lincoln for life not fdic-insured not a deposit not insured by any federal government agency not...

LINCOLN FOR LIFE

Not FDIC-insured

Not a deposit

Not insured by any federalgovernment agency

Not guaranteed by anybank or savings association

May go down in value

Lincoln MoneyGuard® ReserveA smarter alternative to self-insuringSM

Long-term care funding

The Lincoln National Life Insurance CompanyLincoln Life & Annuity Company of New York

For agent or broker use only. Not for use with the public. LCN1108-2058146

For agent or broker use only. Not for use with the public. LCN1108-2058146For agent or broker use only. Not for use with the public.

• The importance of long-term careexpense planning

• Lincoln Financial Life Stages Survey:Long-term care

• What is self-insuring, and why do clients prefer it?• Case studies

Agenda


of people over age 65 willrequire long-term care*70%

*DHHS, 2008. Statistics taken from www.longtermcare.gov. Administration on Aging: 202 619-0724.

The importance of long-term care expense planning


Source: LifePlans Long-Term Care Market Summary: Cost of Care Update 2010; www.LincolnFinancial.com; Research & Analysis; October 1. 2010. For a printed copy of the report, call 877 ASK-LINCOLN.

National average LTC costs in 2010

Assisted living

Nursing home

Home health aide

$3,369 per month$40,428 per year

Semiprivate room:$5,931 per month$71,175 per year

Private room:$6,570 per month$78,840 per year

$20.27 per hour

The importance of long-term care expense planning


Lincoln Financial Life Stages Survey —Lincoln understands how your clients feel

Available at www.LincolnFinancial.com, click Research & Analysis, and then click Featured Surveys.

Executive Summary for LTC Survey


Lincoln Financial Life Stages Survey —Lincoln understands how your clients feel

• Survey of a segment of the population

– Ages 40 to 70

– Household income and/or assets of $100K+

• Survey results

– Americans know the long-term care risks

– They are unaware of their funding options

– Some think they have prepared sufficiently by self-insuring


of people will use savingsto pay for long-term care*

75%

* Lincoln Financial Group, “Long-term Confidence Study,” November 2010.

$60,000Long-term care costs could exceed

per year*

Lincoln Financial Life Stages Survey:Long-term care


* Lincoln Financial Group, “Long-term Confidence Study,” November 2010.

How loved ones paid for the cost of their own long-term care

56% Used savings

Used money from loved ones,family or friends32%

Sold their homes18%

Declared bankruptcy4%

Lincoln Financial Life Stages Survey —Long-term care planning


Why do clients self-insure?

Why not purchase a traditional long-term care product?



• Even though they have assets and investments, these clients treatlong-term care like any other potential expense.

• This gives them– Control over their assets– No ongoing premium costs– Leftover assets for their heirs and

beneficiaries if they don’t need care



• Costs vary and can far exceed expectations• The market doesn’t care when you need LTC• Stress, threats to spousal income, family dynamics


A smarter alternative to self-insuringSM

• Asset control• More for their long-term care dollars • Benefits regardless of whether they need

long-term care

clients wantAdvantages


Lincoln MoneyGuard®

Reserve policyCD


• Control• No premiums• Assets for children• Will this be enough to

pay for her long-term care expenses?

Figures based on 60F, healthy, nonsmoker.

• Control• No additional

premiums (for one-pay policies)

• Assets for children• LTC benefits worth

multiple times her premium payment

$100,000 purchase



Other Life Insurance tocreate a legacy

Portion of savings

Cash savingsInvestments/retirement products

Long-term care benefitsIncome tax-free long-term

care reimbursements ‡Death benefitIncome tax-free death

benefit for beneficiaries†Money backguarantee*

OR OR

Premium

*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.† Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡ Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).



*ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).

A money back guaranteeAt any time, your client can request a return of premium, upon full surrender of the policy. The amount received will be adjusted for any benefits paid and any loans and withdrawals, and it may have tax implications. The money back guarantee is available at issue through the Return of Premium Rider (ROPR) on all one-pay and certain flexible premium policies.*

An income tax-free death benefitIf the client dies, the policy pays an income tax-free death benefit to their beneficiaries.†

This benefit will be adjusted for any long-term care benefits received.

Long-term care benefitsIf the client needs long-term care, the policy can provide income tax-free reimbursements for qualified long-term care expenses.‡

OR

OR

Consider buying a Lincoln MoneyGuard® Reserve policy with a portion of cash reserves. The policy remains an asset in the portfolio, and offers:



CD Lincoln MoneyGuard®

Reserve

1. Control2. No additional premium3. $ to kids

$100,000

2.8% after-tax return over 18

years

$164,390 (30% tax bracket)

Risk = Enough $ for LTC?

LTCLTC/ /

1. Control2. No additional premium3. $ to kids

Risk = Only get $ back

$527,166Income tax-free long-term

care reimbursements$7,322/month$87,861/year

$175,722Income tax-free death

benefit for beneficiaries

Policy purchased with a one-time payment of $100,000

OR



• The policy is an asset inthe client’s portfolio.

• The client appreciates asset leverage — more for the LTC dollar.

• The client gets benefits — regardless of whether long-term care is needed.

• The client has a money back guarantee.1,2

1 Through the Return of Premium Rider (ROPR) available at issue on all one-pay and certain flexible premium policies.2 ROPR not available on flexible premium policies in NY.



• Premiums never increase• Tax advantages• Choice of care setting


Eligibility for reimbursement ofqualified long-term care expenses

Reimbursement for qualified long-term care expenses when:

– The insured is certified as chronically ill by a Licensed Health Care Practitioner;

– Care is provided under a care plan prescribed by a Licensed Health Care Practitioner;

– The initial 90-day deductible period applicable for most expenses has been met;

– And reimbursement is for covered expenses up to the maximum benefit specified in the policy.


Client categories

Retired clients or those nearing retirement (Ages 50–75)

High net worth individuals (Ages 35–80)

Older clients (Ages 70–80)

Clients who have seen the impact of long-term care on their families (Ages 35–80)

Single females (Ages 50–80)

Corporate cash(Ages 35–65)


Hypothetical case study: Protecting retirement income

• Jeffrey, age 67 and Anne, age 62 • Healthy nonsmokers

Concern

• Jeffrey wants to help protect Anne’s retirement incomeshould he need long-term care.

Recommendation

• Jeffrey purchases a $150,000 one-pay Lincoln MoneyGuard® Reserve policy with a two-year Convalescent Care Benefits Rider* (CCBR) and a four-year Extension of Benefits Rider (EOBR).

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender.*State variations apply.


Hypothetical case study: Protecting retirement income

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender. His maximum available benefit is $87,597 per year for six years ($7,300 per month).*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).

OtherLife Insurance tocreate a legacy

Portion of savings

Cashsavings

Investments/retirement products


care reimbursements‡ $175,194Income tax-free death

benefit for beneficiaries†

$150,000Money back guarantee*

$150,000Premium

OR OR


Hypothetical case study: Getting more for the LTC dollar

• Gloria, age 62• Healthy nonsmoker

Concern

• Gloria wants to maintain her lifestyle, leave money toher beneficiaries, and establish a scholarship.

Recommendation

• Gloria purchases a $300,000 one-pay Lincoln MoneyGuard® Reserve policy with a two-year Convalescent Care Benefits Rider* (CCBR) and a four-year Extension of Benefits Rider (EOBR).



Hypothetical case study: Getting more for the LTC dollar

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender. Her maximum available benefit is $246,632 per year for six years ($20,553 per month).*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).

$1,479,792Income tax-free long-term

care reimbursements‡$493,264Income tax-free death

benefit for beneficiaries†$300,000

Money back guarantee*


Portion of savings

Cashsavings


$300,000Premium

OR OR


Hypothetical case study: Preparing later in life

• Joyce, age 76• Healthy nonsmoker

Concern

• Joyce wishes she had prepared a long-term careplan earlier. She’s concerned she may need care due to a family history of Alzheimer’s disease.

Recommendation

• Joyce purchases a $100,000 one-pay Lincoln MoneyGuard® Reserve policy with a three-year Convalescent Care Benefits Rider* (CCBR) and a two-year Extension of Benefits Rider (EOBR).



Hypothetical case study: Preparing later in life

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender. Her maximum available benefit is $38,322 per year for five years ($3,193 per month).*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).


Portion of savings

Cashsavings


$100,000Premium





OR OR


Hypothetical case study: Planning ahead to keep up with inflation

• Dan, age 55• Healthy nonsmoker

Concern

• Dan wants to protect his children from the stressof managing his LTC expenses.

Recommendation

• Dan purchases a $100,000 one-pay Lincoln MoneyGuard® Reserve policy with a two-year Convalescent Care Benefits Rider* (CCBR) and a four-year Extension of Benefits Rider (EOBR).

• Dan adds the 3% Simple Inflation option to keep pace with rising LTC costs.



Hypothetical case study: Planning ahead to keep up with inflation

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender. The values of benefits shown in hypothetical examples may vary. Please request a personalized Projection of Values from your licensed insurance agent/representative.*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).


Portion of savings

Cashsavings


$100,000Premium





OR OR

At age 75, his maximum

available benefit is $98,755 per

year for six years

($8,230 per month).

Values are subject to change if any withdrawals or loans are taken or if any benefits are paid prior to age 75.


Hypothetical case study: Helping to protect the portfolio

• Nancy, age 60• Healthy nonsmoker

Concern

• Nancy is concerned that she may need long-term care withinthe next few years, but she thinks she has enough setaside to cover expenses.

Recommendation

• Nancy purchases a $100,000 one-pay Lincoln MoneyGuard® Reserve policy with a two-year Convalescent Care Benefits Rider* (CCBR) and a four-year Extension of Benefits Rider (EOBR).



Hypothetical case study: Helping to protect the portfolio

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender. Her maximum available benefit is $87,861 per year for six years ($7,322 per month).*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).


Portion of savings

Cashsavings


$100,000Premium





OR OR


Hypothetical corporate case study: Deferred compensation of LTC funding

• Vince, age 60• Healthy nonsmoker

• Vince and his sons own an engineering firm organized as a “C” corporation. He would like to have a valuable fringe benefit of LTC funding that also provides tax benefits for his business.

Recommendation

• The corporation purchases a $100,000 one-pay Lincoln MoneyGuard® Reserve policy for Vince with a two-year Convalescent Care Benefits Rider* (CCBR) and a four-year Extension of Benefits Rider (EOBR).

Concern



Hypothetical corporate case study: Deferred compensation of LTC funding

Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender .*Through the Return of Premium Rider (ROPR) available at issue on all one-pay policies. ROPR not available on flexible premium policies in NY.†Beneficiaries can receive an income tax-free death benefit under IRC Section 101(a)(1).‡Long-term care reimbursements are generally income tax-free under IRC Section 104(a)(3).

OtherBalance sheet

Portion of savings

InsuranceBusiness assets

$100,000Premium





OR OR


• Streamlined underwriting• Experience in claims paying• Experience of Lincoln

Why Lincoln MoneyGuard® Reserve


Next steps

• Identify prospects with cash reserves• Position the product• Follow up• Submit

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

Important disclosures. Please read.

Lincoln MoneyGuard® Reserve is a universal life insurance policy with a rider that accelerates the specified amount of death benefit to pay for covered long-term care expenses. An Extension of Benefits Rider (EOBR) is available to continue long-term care benefit payments after the entire specified amount of death benefit has been paid. The Return of Premium Rider (ROPR) is available at issue on one-time payment policies and certain flexible policies. The ROPR is not available on flexible premium policies in NY. The amount of premium returned is adjusted for any benefits paid, any loans or withdrawals taken, and it may have tax implications. The cost of riders will be deducted from the policy value. The insurance policy and riders have limitations, exclusions, and/or reductions, which may vary by state.

Lincoln MoneyGuard® Reserve is issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, on Policy Form LN850 (8/05) with a Convalescent Care Benefits Rider (CCBR) on Rider Form LR851 (8/05), an Extension of Benefits Rider on Rider Form LR852 (8/05), and a Return of Premium Rider on Rider Form LR850 (10/07) or LR850F (10/07). The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so.

Policies sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY, on Policy Form LN850 (8/05) with a Convalescent Care Benefits Rider on Rider Form LR851 (8/05), an Extension of Benefits Rider on Rider Form LR852 (8/05), a Return of Premium Rider on Rider Form LR850 (10/07), a Terminal Illness Accelerated Death Benefit Rider on Rider Form LR853 (8/05) and a Right to Purchase a Long-Term Care policy on Endorsement Form LR856 (8/05).

All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. They are not backed by the broker/dealer and/or insurance agency selling the policy, or any affiliates of those entities other than the issuing company affiliates, and none makes any representations or guarantees regarding the claims-paying ability of the issuer.

Products and features, including benefits, exclusions, limitations, terms, and definitions, may vary by state. Accelerated death benefits may be taxable and may affect public assistance eligibility.

©2011 Lincoln National CorporationLincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.

Affiliates are separately responsible for their own financial and contractual obligations.

9/11 Z01Order code: MGR-ADV-PPT002

Not FDIC-insured

Not a deposit

Not insured by any federalgovernment agency

Not guaranteed by anybank or savings association

May go down in value

LCN1108-2058146

lincoln for life not fdic-insured not a deposit not insured by any federal government agency not...

Documents

longterm carefor agent

longterm care costs

longterm care risksthey

longterm carewhat

ltc surveyfor agent

selfinsuringfor agent

case studiesagendafor

lincoln financial group