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©2007 Lincoln National Corporation. LCN200712-2011244 12/2007
Indexed Universal Life Level 101
Lincoln LifeElementsSM Indexed UL
Presenter NamePresenter title and organizationApril 19, 2023
Important disclosures
"Standard & Poor's®", "S&P®", "S&P 500®", "Standard & Poor's 500", and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Lincoln Variable Insurance Products Trust and its affiliates. The Product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the Product.
The S&P 500 Index is a price index and does not reflect dividends paid on the underlying stocks.
©2007 Lincoln National Corporation
www.LFG.com
Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.
Affiliates are responsible for their own financial and contractual obligations.
Important disclosures. Please read.
Lincoln LifeElementsSM Indexed UL is issued on policy form UL5041 and state variations by the Lincoln National Life Insurance Company, Fort Wayne, IN. The Lincoln National Life Insurance Company is not authorized nor does it solicit business in the state of New York. Product and features subject to state availability. Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
Policies sold in New York are issued on policy form UL5041N by Lincoln Life & Annuity Company of New York, Syracuse, NY. The contractual obligations are backed by the claims-paying ability of Lincoln Life & Annuity Company of New York.
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.
This material was prepared to support the promotion and marketing of universal life 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.
Not a depositNot FDIC-insuredNot insured by any federal government agencyNot guaranteed by any bank or savings associationMay go down in value
LCN200712-2011244
Ask yourself…
If I’m not here, will my family still need the income I provide?
Am I concerned about out-living my retirement?
Is continuing to accumulate assets that could provide income important to me?
Am I concerned about market volatility?
Do I need to start saving for my child’s future?
LCN200712-2011244
Life is beautiful
You might consider universal life insurance if
You need to protect your family in case you’re not there.
You need to create wealth to help secure income in retirement
LCN200712-2011244
Life is beautiful
You might consider indexed universal life insurance if
You have a death benefit need.
You need greater growth potential than a fixed rate could offer but are concerned about the impact of market volatility on your assets.
You want flexibility to help pay for college costs, pay for a vacation home, or any surprises life might have for you.
LCN200712-2011244
Challenges to securing your retirement income
Market fluctuationsCost of inflation
LCN200712-2011244
Cost of inflation
Then and now
*Hypothetical beginning cost to illustrate the effect of inflation.Source: U.S. Bureau of Labor Statistics March, 2007.
$5.00
$10.00
$20.00
Cost then*
$19.88
$80.56
$194.04
Cost now
5.05%1978-2006
Admissions to movies, theater, concerts, and sporting events
4.54%1959-2006
Dining out
6.00%1967-2006
Hotel stay
Avg. annual inflation rate
Time periodExpense
LCN200712-2011244
Market volatility
Data source: Ibbotson Associates, March, 2007.
Index past performance is not indicative of future results. The value of securities will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Indexes are unmanaged and unavailable for direct investment. Performance of these indexes does not correspond with any particular investment product and does not represent performance of the insurance product described in this brochure.
Performance of the S&P Index, 1926-2006
LCN200712-2011244
Key benefits
Helps protect your family with a death benefit
Offers opportunities for accumulation
Protects policy values from volatility
Provides a potential source of supplemental income
Indexed Universal Life
LCN200712-2011244
Before jumping in…
Understand the product and potential outcomes
Understand that “Indexed UL” is life insurance
Understand the product components that drive performance:
• caps,• participation rates,• indices,• etc.
Indexed Universal Life
LCN200712-2011244
Indexed Universal Life
Key terms
Cap Maximum growth rate of the indexed interest credited
Spread Amount subtracted from index growth rate
Index The source of values used to determine credited interest rates. (i.e. S&P 500)
Participation Percentage of the index
Crediting Methodology The way in which changes to the index are used to calculate the interest credited.
Guarantee Promised minimum percentage credited to the account
LCN200712-2011244
The markets are as unpredictable as the weather
Lincoln LifeElementsSM Indexed UL protects your family with a reliable death benefit
Protects your principal from market downturns
Offers opportunity for accumulation
Account value for long-term needs
Riders allow for policy customization
Lincoln LifeElementsSM Indexed UL
LCN200712-2011244
A balance of growth potential and wealth preservation
LCN200709-2007986
Premium
Indexed
Account1
Indexed
Account3
Indexed
Account2
Fixed Account
Fixed
interest rate
Never less
than 1%
LCN200712-2011244
Define how an index is used to credit interest
Look Back CreditingInterest at the end of the index period (only on money that remains)
Three crediting options1-year point-to-point1-year monthly cap1-year monthly average
Crediting methods
LCN200712-2011244
LifeElementsSM Indexed UL crediting methods
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL.
1-year Point-To-Point Indexed AccountThe value at the end of the one-year indexed term is compared to the value at the beginning of the term.
LCN200712-2011244
LifeElementsSM Indexed UL crediting methods
Calculates the percentage change of the S&P 500 monthly for the one-year indexed term.
1-year Monthly Cap Indexed Account
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL.
LCN200712-2011244
LifeElementsSM Indexed UL crediting methods
Provides indexed interest linked to the percentage change in the average S&P 500 indexed value at the end of each segment month over the index value at the beginning of that indexed term.
1-year Monthly Average Indexed Account
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL.
LCN200712-2011244
The volatile market
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL. LCN200712-2011244
The bear market
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL. LCN200712-2011244
The volatile upward market
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL. LCN200712-2011244
The bull market
*Rates on all charts are hypothetical and for illustration purposes only. Past performances of the S&P 500 index is no guarantee of future changes or future index earnings of Lincoln LifeElementsSM Indexed UL. LCN200712-2011244
Withdrawals
Minimum withdrawal
Possible tax implications
Transaction fee
100% of cash surrender value
Withdrawal limitations
Loans and withdrawals will reduce account value and death benefit LCN200712-2011244
Loans
Your funds continue to work
Borrow up to 100% of cash surrender value
Loan accrues interest
Loans from the Fixed Account add flexibility
Loans and withdrawals will reduce account value and death benefit LCN200712-2011244
How Indexed loans work
Starting values
Scenario #1 after one year
Scenario #2 after one year
AssumptionsFixed loan rate: 5%
Overall return on policy value: 7%
Overall return on policy value: 2%
Policy value $100,000 $100,000 x 7% = $107,000 New policy value = $102,000
Policy loan $10,000 $10,000 x 5% = $10,500 Policy loan = $10,500
Loan percentage
10% 9.8% 10.3%
Loans and withdrawals will reduce account value and death benefit LCN200712-2011244
Why Lincoln LifeElementsSM Indexed UL?
Optional riders & benefits• Overloan Protection Endorsement
• Supplemental Term Insurance Rider on Primary Insured
• Supplemental Term Insurance Rider on Other Insured
• Accidental Death Benefit Rider
• Children’s Insurance Rider
• Guaranteed Insurability Rider
• Disability Waiver of Monthly Deductions Benefit
• Disability Waiver of Specified Premium
• Accelerated Benefits Rider
• Disability Income Rider
• Non-working Spouse Disability Income RiderOptional riders and benefits are available at an additional cost.
Availability of benefits, riders, and features may vary by state. LCN200712-2011244
John and Maria
Over the years, John and Maria have created a fairly aggressive portfolio to prepare for their retirement. As they are getting closer to retirement, they are concerned about having a significant percentage of their assets exposed to the market.
To balance out their portfolio risk, they want assets that are still able to increase over time as they are still preparing for retirement, but they want more assets protected from market downturns.
How it can work for you
LCN200712-2011244
John and Maria
And for those assets not needed for income, they also want to make sure that they have both the protection of life insurance and its tax efficiency for creating a legacy for their family.
How it can work for you
LCN200712-2011244
Goals
Creating a tax-efficient legacy for their family through death benefit protection
Protecting assets
Flexibility in their retirement income
Increasing long-term purchasing power
How it can work for you
LCN200712-2011244
Why a LifeElementsSM Indexed UL policy might be the right choice
Death benefit creates a tax-efficient legacy for their family
Protection from volatility
The flexibility to use the account value for supplementing their income
The opportunity to increase their assets
How it can work for you
Loans and withdrawals will reduce account value and death benefit
LCN200712-2011244
Dave and Tanya
The last of Dave and Tanya’s three children just graduated from college, and they want to make up for lost time. Their chief concern for their overall portfolio is not having enough saved for retirement.
With that issue in mind, they want to make sure more of their portfolio works harder. At the same time, they want to somehow protect the assets they do have, so they don’t lose any ground toward their retirement goals.
How it can work for you
LCN200712-2011244
Dave and Tanya
They know they still need the protection that life insurance offers in case something happens to one of them, but they also want it to be flexible enough. Dave and Christine both work full time and earn substantial salaries, allowing them to maximize their premiums to a policy.
How it can work for you
LCN200712-2011244
Goals
Death benefit protection for their family
Making up for lost time with their retirement savings
Increasing long-term purchasing power
Protecting assets
How it can work for you
LCN200712-2011244
Why a LifeElementsSM Indexed UL policy might be the right choice
Solve two needs with one product: the protection of life insurance combined with the opportunity to increase assets
Multiple index accounts allow them to create a portfolio that can take advantage of different market environments
Protection from volatility with a guaranteed minimum of 1%
Flexibility to use the account value for supplementing their income
How it can work for you
Loans and withdrawals will reduce account value and death benefit LCN200712-2011244
Contact information
Securities and investment advisory services distributed by Lincoln Financial Distributors, Inc., a broker/dealer and registered investment advisor. Insurance offered through Lincoln affiliates. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.
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LCN200712-2011244