MoneyGuard Plus - Diversified Insurance Brokers

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LINCOLN FOR LIFE
Lincoln MoneyGuard® Reserve Plus
A smarter alternative to self-insuringSM
Long-term care funding
The Lincoln National Life Insurance Company
Not a deposit
Not FDIC-insured
Not insured by any federal
government agency
Not guaranteed by any
bank or savings association
May go down in value
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Agenda
• The importance of long-term care
expense planning
• Lincoln Financial Life Stages Survey:
Long-term care
• What is self-insuring, and why do clients prefer it?
• Case studies
For agent or broker use only. Not for use with the public.
LCN1109-2059094
The importance of long-term care
expense planning
70
% of people over age 65 will
require long-term care*
*DHHS, 2008. Statistics taken from www.longtermcare.gov. Administration on Aging: 202 619-0724.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
The importance of long-term care
expense planning
National average LTC costs in 2010
Assisted living
$3,369 per month
$40,428 per year
Nursing home
Semiprivate room:
$5,931 per month
$71,175 per year
Private room:
$6,570 per month
$78,840 per year
Home health aide
$20.27 per hour
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.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Lincoln Financial Life Stages Survey —
Lincoln understands how your clients feel
• Lincoln Financial Life Stages Survey:
Long-term care
Executive Summary
for LTC Survey
Available at www.LincolnFinancial.com,
click Research & Analysis, and then
click Featured Surveys.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Lincoln Financial Life Stages Survey —
Lincoln understands how your clients feel
• Survey of a segment of the population
– Ages 40 to 70
– Household incomes 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
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Lincoln Financial Life Stages Survey —
Long-term care
75
%
of people will use savings
to pay for long-term care*
Long-term care costs could exceed
$60,000
per year
* Lincoln Financial Group, “Long-term Confidence Study,” November 2010.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Lincoln Financial Life Stages Survey —
Long-term care planning
How loved ones paid for the cost of their own long-term care
56%
32%
18%
4%
Used savings
Used money from
loved ones, family or friends
Sold their homes
Declared bankruptcy
* Lincoln Financial Group, “Long-term Confidence Study,” November 2010.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Why do clients self-insure?
Why not purchase a traditional long-term
care product?
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Why do clients self-insure?
• Even though they have assets and
investments, these clients treat
long-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
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Why do clients self-insure?
• Costs vary and can far exceed expectations
• The market doesn’t care when you need LTC
• Stress, threats to spousal income, family dynamics
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
Advantages
clients want
• Asset control
• More for their long-term care dollars
• Benefits whether or not they need long-term care
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
$100,000 purchase
•
•
•
•
CD
Lincoln MoneyGuard®
Reserve Plus policy
Control
No premiums
Assets for children
Will this be enough to
pay for her long-term
care expenses?
• Control
• No additional premiums
(one-pay policies)
• Assets for children
• LTC benefits worth
multiple times her
premium payment
Figures based on 60-year-old female, healthy, nonsmoker.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
Other
Life insurance to
create a legacy
Premium
Portion of savings
Investments/
retirement products
Cash savings
Long-term care benefits
Income tax-free long-term
care reimbursements
Death benefit
Income tax-free death
benefit for beneficiaries
Money-back
guarantee
OR
OR
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
Your client can purchase a Lincoln MoneyGuard® Reserve Plus policy with a portion
of cash reserves. The policy remains an asset in their portfolio, and it offers:
A money-back guarantee.
OR
At 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
cash withdrawals, and it may have tax implications. The money back guarantee is
included in the policy cost through the Enhanced Surrender Value Endorsement,
which is available at issue on all single premium policies and flexible premium policies
for ages 35 – 65. See Endorsement for complete terms and conditions.
An income tax-free death benefit.
When the client dies, the policy pays an income tax-free death benefit to
their beneficiaries.*
OR
Long-term care benefits.
If the client needs long-term care, the policy can provide income tax-free
reimbursements for qualified long-term care expenses.†
* 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).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
CD
Lincoln MoneyGuard®
Reserve Plus
/
$100,000
1. Control
2. No additional premium
3. $ to kids
2.8% after-tax
return over 18
years
$164,390
(30% tax bracket)
$100,000
1. Control
2. No additional premium
3. $ to kids
$166,766
Income tax-free death
benefit for beneficiaries
Risk = Enough $ for LTC?
/
$500,298
OR
Income tax-free long-term
care reimbursements
$6,949/month
$83,383/year
Risk = Only get $ back
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
• The policy is an asset in
the client’s portfolio.
• The client appreciates asset leverage
— more for the LTC dollar.
• The client gets benefits — whether or
not long-term care is needed.
• The client has a money back
guarantee.1
1
Through the Enhanced Surrender Value Endorsement available at issue on all single premium policies and
flexible premium policies for ages 35 – 65. See Endorsement for complete terms and conditions.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
•
•
•
•
•
No deductible or elimination period
Premiums never increase
Tax advantages
Choice of care setting
International benefits
For agent or broker use only. Not for use with the public.
LCN1109-2059094
A smarter alternative to self-insuringSM
Eligibility for reimbursement of qualified
long-term care expenses
• 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.
• Reimbursement is for covered expenses up to the
maximum benefit specified in the policy.
For agent or broker use only. Not for use with the public.
LCN1109-2059094
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 in their families
(Ages 35–80)
Single females
(Ages 50–80)
Corporate cash
(Ages 35-65)
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Protecting retirement income
• Jeffrey, age 67 and Anne, age 62
• Healthy, nonsmokers
Concern
• Jeffrey wants to help protect Anne’s retirement income
should he need long-term care.
Recommendation
• Jeffrey purchases a $150,000 single premium
Lincoln MoneyGuard® Reserve Plus 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
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Protecting retirement income
Other
Life insurance to
create a legacy
Portion of savings
$150,000
Premium
Investments/
retirement products
Cash
savings
$553,497
Income tax-free long-term
care reimbursements
$184,499
Income tax-free death
benefit for beneficiaries
$150,000
Money back guarantee
OR
OR
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
His maximum available benefit is $92,250 per year for six years ($7,687 per month).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Getting more for the LTC dollar
• Gloria, age 62
• Healthy, nonsmoker
Concern
• Gloria wants to maintain her lifestyle, leave money to
her beneficiaries, and establish a scholarship.
Recommendation
• Gloria purchases a $300,000 single premium
Lincoln MoneyGuard® Reserve Plus 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
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Getting more for the LTC dollar
Other
Life insurance to
create a legacy
Portion of savings
$300,000
Premium
Investments/
retirement products
Cash
savings
$1,421,910
Income tax-free long-term
care reimbursements
$473,970
Income tax-free death
benefit for beneficiaries
$300,000
Money back guarantee
OR
OR
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
Her maximum available benefit is $236,985 per year for six years ($19,749 per month).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Having no deductible/elimination period
• Joyce, age 76
• Healthy, nonsmoker
Concern
• Joyce wishes she had prepared a long-term care
plan earlier. She’s concerned she may need care due to
a family history of Alzheimer’s disease.
Recommendation
• Joyce purchases a $100,000 single premium
Lincoln MoneyGuard® Reserve Plus policy with
a three-year Convalescent Care Benefits Rider (CCBR)
and a two-year Extension of Benefits Rider (EOBR).
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Having no deductible/elimination period
Other
Life Insurance to
create a legacy
Portion of savings
$100,000
Premium
Investments/
retirement products
Cash
savings
$192,663
Income tax-free long-term
care reimbursements
$115,598
Income tax-free death
benefit for beneficiaries
$100,000
Money back guarantee
OR
OR
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
Her maximum available benefit is $38,533 per year for five years ($3,211 per month).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Planning ahead to keep up with inflation
• Dan, age 50
• Healthy, nonsmoker
Concern
• Dan wants to protect his children from the stress
of managing his LTC expenses.
Recommendation
• Dan purchases a $100,000 single premium
Lincoln MoneyGuard® Reserve Plus 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 example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Planning ahead to keep up with inflation
Values are subject to change if any cash withdrawals or loans are taken
or if any benefits are paid prior to age 75.
Other
Life Insurance to
create a legacy
Portion of savings
$100,000
Premium
Investments/
retirement products
At age 75, his
maximum available
benefit is $131,676 per
year for six years
($10,973 per month).
Cash
savings
$790,058
Income tax-free long-term
care reimbursements
$153,112
Income tax-free death
benefit for beneficiaries
$100,000
Money back guarantee
OR
OR
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Helping to protect the portfolio
• Nancy, age 60
• Healthy, nonsmoker
Concern
• Nancy is concerned that she may need long-term care within
the next few years, but she thinks she has enough set
aside to cover expenses.
Recommendation
• Nancy purchases a $100,000 single premium
Lincoln MoneyGuard® Reserve Plus 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
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical case study:
Helping to protect the portfolio
Other
Life insurance to
create a legacy
Portion of savings
$100,000
Premium
Investments/
retirement products
Cash
savings
$500,298
Income tax-free long-term
care reimbursements
$166,766
Income tax-free death
benefit for beneficiaries
$100,000
Money back guarantee
OR
OR
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
Her maximum available benefit is $83,383 per year for six years ($6,949 per month).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical corporate case study:
Deferred compensation of LTC funding
• Vince, age 60
• Healthy, nonsmoker
Concern
• 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 single premium
Lincoln MoneyGuard® Reserve Plus policy for Vince 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
(except in Montana, where gender does not affect rates or benefits).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Hypothetical corporate case study:
Deferred compensation of LTC funding
Other
Balance sheet
Portion of savings
$100,000
Premium
Business assets
Insurance
$432,786
Income tax-free long-term
care reimbursements
$144,262
Income tax-free death
benefit for beneficiaries
$100,000
Money back guarantee
OR
OR
Hypothetical example only. Benefit amounts will vary by client’s age, health status, and gender
(except in Montana, where gender does not affect rates or benefits).
His maximum available benefit is $72,131 per year for six years ($6,011 per month).
For agent or broker use only. Not for use with the public.
LCN1109-2059094
Why Lincoln MoneyGuard® Reserve Plus
• Streamlined underwriting
• Experience in claims paying
• Experience of Lincoln
For agent or broker use only. Not for use with the public.
LCN1109-2059094
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.
LCN1109-2059094
Important disclosures. Please read.
A universal life insurance policy with a Convalescent Care Benefits Rider (CCBR) that accelerates the specified
amount of death benefit to pay for covered long-term care expenses. An Extension of Benefits Rider (EOBR) to
continue long-term care benefit payments after the entire specified amount of death benefit has been paid. The
money back guarantee is featured through the Enhanced Surrender Value Endorsement (ESVE), included in the
policy cost for all single premium policies and for flexible premium policies for issue ages 35–65. The additional
surrender benefit provided will be adjusted by any loans/loan interest/loan repayments, withdrawals taken, or claim
payments made. The cost of riders will be deducted monthly from the policy cash value.
Issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, on Policy Form LN870 with the
Convalescent Care Benefits Rider (CCBR) on Rider Form LR870, an optional Enhanced Surrender Value
Endorsement (ESVE) on Endorsement Form B10465F, an optional Extension of Benefits Rider (EOBR) on Rider
Form LR871, and an optional Nonforfeiture Benefit Rider (NFO) on Rider Form LR872.
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.
The policy and riders have exclusions, limitations, and/or reductions. Products and features, including benefits, terms,
and definitions, may vary by state. Not approved for use in New York.
©2011 Lincoln National Corporation
Not a deposit
www.LincolnFinancial.com
Not FDIC-insured
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.
9/11 Z02
Order code: MGR-ADV-PPT001
For agent or broker use only. Not for use with the public.
Not insured by any federal
government agency
Not guaranteed by any
bank or savings association
May go down in value
LCN1109-2059094
Contact
Diversified Ins. Brokers
800-533-5969
Toll Free
770-662-8510
Local
770-662-0516
Fax
www.DiversifiedIns.com
Margaret Stolz
[email protected]
Jason Stolz
[email protected]
Jarad Stolz
[email protected]
LCN1101-2049896
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