Changes Ahead sign

Lincoln Financial Group is preparing to replace its MoneyGuard II product — a long-term care (LTC) planning product based on a universal life insurance chassis — with a new, similar product that complies with new regulations.

The Radnor, Pennsylvania-based company has sent agents a notice listing the timeline it will use to “sunset” the current product.

(Related: Lincoln Financial Updates Life Products)

The formal application submission deadline is Nov. 1.

Lincoln is hoping that premiums will come in by Dec. 27. Because of regulatory requirements, the company is enforcing a hard Dec. 31 deadline for MoneyGuard II premium payments.

Lincoln is replacing the MoneyGuard II product with a new MoneyGuard III product in response to state insurance regulators’ new principles-based reserving strategy and the shift to the 2017 Commissioners’ Standard Ordinary mortality tables.

The Lincoln National Life Insurance Company, a Lincoln unit based in Fort Wayne, Indiana, has already received approval for the MoneyGuard III product in Indiana, under the name MG III.

One of the highlights of the MG III actuarial memorandum in Indiana is a description of what happens when the insured reaches the age of 121.

Here are some of the MG III continuation-of-coverage features for 121-year-olds:

The company will no longer assess monthly deductions.

  • The company will not allow any decreases to the specified benefits amount.
  • The company will continue to credit interest on the policy’s gross cash value.
  • The company will continue to allow loans and partial surrenders to be taken.

The MGIII issue ages available will be from 30 to 80, according to the actuarial memorandum. If the first policies take effect in 2020, and some customers buy the policies to cover 80-year-olds, the insureds will start turning 121 in 2061.

— Read Lincoln Expands MoneyGuard Options, on ThinkAdvisor.

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