A large insurer is giving participants in 401(k) plans and other defined contribution plans a chance to buy the same kind of income protection that holders of individual annuities have been buying.
The employer markets of Lincoln National Corp., Philadelphia, now is offering its i4LIFE Advantage rider as a distribution options for beneficiaries of employer-sponsored plans funded with the Lincoln Multi-Fund 1, Multi-Fund Select, Director and Lincoln American Legacy Retirement group annuities.
When a participant elects the i4LIFE Advantage distribution option, the participant’s account balance can stay invested in stock-based investment options, Lincoln says.
The distribution option creates a lifetime income stream that can drop by a limited amount, but only to a specified minimum, Lincoln says.
If the underlying equity accounts do well, income could increase significantly, Lincoln says.
The cost of the rider is an asset charge of 0.48 percentage points.
Lincoln also is offering a joint lifetime version of the rider that provides lifetime income for the participant’s spouse, even if the participant is the first to die.
Lincoln National Life Insurance Company, Fort Wayne, Ind., issues the underlying annuities and is responsible for backing the i4LIFE rider guarantees.