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Lincoln to Add Variable Universal Life-Long Term Care Hybrid

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Lincoln Financial Group is adding a product that will combine long-term care (LTC) benefits with variable universal life (VUL) insurance.

The new Lincoln MoneyGuard Market Advantage program will provide a VUL policy along with a long-term care (LTC) benefits rider.


Lincoln Financial’s MoneyGuard policies have been a major source of life-LTC hybrid coverage for decades. The older life-LTC hybrid policies have been fixed universal life policies.

Lincoln Financial says in product fliers that it plans to sell the new VUL-LTC MoneyGuard product alongside the old UL-based MoneyGuard products.

Lincoln Financial executives have told securities analysts that they’re trying to move away from products that expose the company to substantial amounts of risk related to low interest rates and changes in interest rates.

Offering life insurance through a VUL policy, rather than a UL policy, may help an insurer assume less interest rate risk, hedge any interest rate risk it does assume. Also it will charge a policyholder a separate amount for any riders or other features used to protect the policyholder against interest rate risk.

Radnor, Pennsylvania-based Lincoln Financial said it will write the new VUL-LTC hybrid policy through The Lincoln National Life Insurance Company, according to a product prospectus filed with the U.S. Securities and Exchange Commission.

The Lincoln National Life Insurance Company has its official state of domicile in Fort Wayne, Indiana.

Product Features

A holder of the new MoneyGuard policy can allocate money to funding options in three tiers of funding choices. The first tier includes a fixed account, bond funds and a money market fund. The second tier includes target-date funds and other types of funds that mix stocks and bonds. The third tier consists of stock funds and ETFs.

The policyholder can use the LTC benefits rider to lock in a minimum level of LTC benefits.

The issues are for those ages 30 to 70. A buyer can pay for a policy all at once or over time. A buyer who chooses the flexible-premium design can pay premiums until the insured turns 121.

(Related: IRS Blesses 2017 Mortality Tables)

The policy LTC benefits rider come with a “zero-day elimination period.” That means that the policyholder can begin using the LTC benefits immediately after the insured begins to suffer from severe cognitive impairment or becomes unable to perform two or more “activities of daily living,” such dressing or bathing, without substantial assistance.

A policyholder can use the LTC benefits without providing receipts and can use the money to pay for care provided by family members, including a spouse

— Read Lincoln Expands MoneyGuard Optionson ThinkAdvisor.

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