Lincoln Financial Group (LFG) is the marketing name for Lincoln National Corporation, and its affiliates. Lincoln Financial Group’s policies are issued by The Lincoln National Life Insurance Company, and in New York, under the Lincoln Life & Annuity Company of New York. We at I&E are fans of LFG and would rank it as one of the best life insurance companies. In the following Lincoln Financial Group life insurance review we will take a look at the Company’s history, financials, ratings, products and riders.
Review of Lincoln Financial Group Life Insurance
At I&E, we craft reviews highlighting our favorite types of cash value policies, including dividend paying whole life insurance and indexed universal life insurance. We desire to bridge the gap between consumers and companies. We believe one way to do this is through information. We strive to being our readers comprehensive company reviews so that you can make the best decision on which company is right for you, based on your specific needs and objectives.
So with that in mind, let’s take a look at how Lincoln Financial started its journey to the global leader it is today.
About Lincoln Financial
LFG is named after one of our greatest American leaders, President Abraham Lincoln. In 1905, a group of businessmen wanted to start a company that was focused on dependability, honesty and service, and Lincoln National Life Insurance Company was formed. The company was even able to get Abraham Lincoln’s son, Robert Todd Lincoln, to grant LFG the right to use his father’s name and likeness. According to the company:
[LFG] is the first and only company in the world that freely carries Abraham Lincoln’s name, image and ideals at the heart of our brand.
From it’s auspicious beginning in 1905, LFG was destined for success. This is evident in the fact that during the Great Depression, Lincoln Financial navigated those difficult times with no layoffs. The company weathered the worst financial storm in our nation’s history, and by 1955, Lincoln Financial was the ninth largest life insurance company in the U.S.
By 1983, the company had surpassed over $100 billion of life insurance in force.Today the company enjoys the prestige of being one of the nation’s best life insurance companies.
For 2017, Fortune 500 ranked LFG #207 by revenue and #24 by assets. LFG has $241 billion total assets under management and is ranked #1 in Universal Life Insurance and Variable Life Insurance sales.
Lincoln Financial Group Financial Ratings
LFG is a top rated life insurance company. The various life insurance ratings agencies have given high marks to Lincoln Financial across the board. Lincoln Financial’s ratings as of August 2017 include:
- A.M. Best: A+, Superior
- Fitch: A+, Strong
- Moody’s: A1, Good
- Standard and Poor’s: AA-, Very Strong
- Comdex Ranking: 90
These fantastic ratings reflect Lincoln Financial Group’s commitment to long term stability, providing peace of mind to all policyholders of LFG.
Products Offered by Lincoln Financial
Lincoln Financial Group has a large array of financial products and services, serving both individuals and business.For employers and Organizations, LFG offers everything from short-term and long-term disability, to life and accident insurance, dental insurance, critical illness and vision insurance.
The company’s products and services for individuals feature:
Insurance for Individuals and Family, including
- Term life insurance
- Universal life insurance
- Indexed universal life insurance
- Variable universal life insurance
- Long term care life insurance
- Traditional Fixed Annuities
- Fixed Income Annuities
- Fixed Indexed Annuities
- Variable Annuities
Life Insurance Policies offered by Lincoln Financial Group
LFG offers both term life and permanent life insurance. There is not one size fits all policy so each type of coverage offers benefits. What type of life insurance you need will be largely determined by your personal or business needs and goals. It is important to know which product is right for you, specifically term vs whole life insurance and whole life vs universal life.
Benefits of Term Life Insurance
- Lower Initial Cost
- Income Protection
- Mortgage Protection
- Conversion Option
Benefits of Permanent Life Insurance
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Executive Bonus (Section 162) Plans
- Non-Qualified Deferred Compensation Plans
- Split Dollar Life Insurance
- Infinite Banking
Life insurance policies offered through Lincoln Financial Group
Lincoln Financial provides term life and universal life. Under the umbrella of universal life is also indexed universal life and variable universal life. Let’s start by taking a look at LFG’s term life.
Lincoln offers a term products called TermAccel Level Term and LifeElements Level term. These level term life insurance policies does not require labs if your qualify after completing a phone interview application. TermAccel is the best fit for ages 50 and under and face amounts $500,000 and less. LifeElements is for clients ages 45+ and face amounts above $500,000.
LifeElements is convertible term life insurance, allowing you to convert all or a portion of the face amount to permanent coverage before the end of the term or by age 70, which ever is less. You can choose term lengths of 10, 15, 20 and 30 years.
Besides the conversion option, you can also benefit from an accelerated death benefit rider, waiver of premium rider and child term rider.
LFG, through Lincoln National Life Insurance Company and Lincoln Life & Annuity Company of New York provide Universal, Guaranteed, Indexed and Variable.
Among the universal life offerings are:
- Lincoln LifeGuarantee UL
- Lincoln LifeCurrent UL
- Lincoln LifeGuarantee Survivorship UL
- Lincoln LifeReserve Indexed UL Accumulator
- Lincoln WealthAdvantage Indexed UL
- Lincoln WealthPreserve Survivorship Indexed UL
- Lincoln AssetEdge VUL
- Lincoln AssetEdge Exec VUL
- Lincoln SVULONE
- Lincoln PreservationEdge SVUL
Indexed Universal Life vs Variable Universal Life
Both IUL and VUL policies provide permanent coverage, pay a lump sum death benefit to your beneficiary and provide cash value growth and access to your cash value via withdrawals or loans.
In addition, both IUL and VUL policies provide flexibility. You can change your premium payments by paying larger premiums or smaller and adjust your death benefit up or down.
The main differences between an IUL policy and VUL policy are in the way you premiums are allocated.
With IUL policies, You are not investing in the stock market. Instead, your premium is transferred to the policy’s fixed account, where it will earn interest based on the company’s declared rate. Alternatively, you can transfer all or a portion of your premium to an indexed account. The indexed account tracks a particular major indices, such as the S&P 500. The account is credited interest based on a formula that takes into account the performance of the indices the index tracks.
With IUL, your have buffers that protect you from losses and also limit your gains. Your total interest credited is limited by a cap (although some companies offer no cap indexed accounts), the plus is that your downside is also protected by a guaranteed floor.
With VUL policies, you also allocate your premiums from a fixed account into variable investment options sub-accounts, much like mutual funds. The VUL sub-accounts are investments in the market. And inlike IULs that protect from losses with a floor, with VUL policies, there is no minimum floor and no maximum cap. Your policy’s cash value may go up or down based on the performance of the market you are invested in.
Long term care insurance provides financial asset protection and wealth preservation by providing income benefits if you are unable to perform 2 of 6 activities of daily living or have a cognitive disease, such as Parkinson’s or Alzheimer’s. The rising costs associated with long term care can demolish even the best laid financial plans.
Lincoln National Life Insurance Company offers an excellent combination long term care life insurance policy called Lincoln MoneyGuard II in all states except NY. In New York, the LTC+Life hybrid policy is called Lincoln MoneyGuard Reserve.
Lincoln MoneyGuard II Features and Benefits
You can choose between single premium universal life insurance or 10 Pay Universal Life Insurance. One thing to be aware of with single premium policies is that they are considered a modified endowment contract (MEC) and don’t have all the typical tax advantages of cash value life insurance.
The policy issue ages are from 40-79. The younger you are when getting your LTC policy the lower your long term care insurance rates will be. According to widely available statistics on long term care, people over the age of 65 have around a 50% chance of requiring long term care.
Your death benefit that you apply for determines how much LTC benefits you will be eligible to receive under the Long-Term Care Accelerated Benefits Rider – LABR. You can also add the Long Term Care Extension of Benefits Rider (LEBR), which continues benefits once the LABR has run out.
The value protection rider provides a no-lapse guarantee and two different return of premium options. Under Basic ROP, after all premiums have been paid you can have 80% of your premiums returned. Under Vested ROP, a vested percentage of premiums will be paid if you decide to surrender the policy.
An inflation protection rider can be included providing 3% or 5% compound inflation growth. LTC costs continue to meet and exceed these percentages so this is an important rider to consider.
You can shape your MoneyGuard II policy to your liking, increasing your income benefit period from 2 years up to 7 years.
MoneyGuard II uses a reimbursement income benefit method. Bills are submitted either by you or your agent. Alternatively, you can have your service providers send bills directly to The Lincoln National Life Insurance Company.
Additional Benefits of Cash Value Life Insurance
There are distinct advantages of cash value life insurance, including the following.
Tax free life insurance policy loans
Life insurance loans are available with permanent life policies. Policy loans are not taxable. You have the right to borrow from the insurer, using your policy’s cash value as collateral, for whatever you want. If you die with an outstanding loan, any amount still owed, plus interest, will be taken from your death benefit before your beneficiary receives the remainder.
Tax deferred cash value growth
Under IRC 7702, cash value in your policy grows tax deferred. Apart form withdrawing your cash value above your basis or having your policy lapse, your cash value is yours income tax free by utilizing policy loans.
Tax free death benefit
The death benefit payout of your life insurance is not taxed to your beneficiary. As long as your estate is under the federal exemption limit, or your own state inheritance tax level, no tax from your life insurance proceeds will be taxable. For larger estates, careful asset protection planning is necessary.
Life Insurance Riders
The following life insurance riders from Lincoln Financial are not available on all policy types.
Accelerated Benefits rider (with Critical Illness Coverage): covers qualifying specific illness or critical illness or conditions.
Accelerated Benefits rider (terminal illness only): pays out a portion of the death benefit for a qualifying terminal illness.
LFG Review Conclusion
LFG is a top rated company, providing some unique life insurance products and riders. Each of these can be tailored to create a great life insurance policy. But the underlying question remains…
Is Lincoln Financial Group the best choice for your insurance needs and objectives?
Without speaking to you and discovering your goals, needs and objectives we cannot say which company will best suit your needs.
Do you have questions or would you like to see an illustration of LFG or any of the other companies we represent? Give us a call today for a free life insurance consultation with an advanced markets professional.