LFG Policy Charges Update
The Life Insurance industry is operating in a challenging and changing environment as we anticipate uncertain financial markets, persistent low interest rates, and an evolving regulatory landscape. Prudent management of our business and monitoring of the external environment have been crucial to Lincoln’s 112-year track record of helping people secure their financial futures, and remains so today. At times this requires Lincoln to make adjustments to our products and in-force policies.
Effective August 1, 2017, current non-guaranteed Cost of Insurance (COI) rates are being changed on certain universal life (UL) policies issued by Jefferson Pilot (now The Lincoln National Life Insurance Company) between the years 1983-2008. While most of the rate changes are increases, some policyholders will see a combination of increases and decreases. The guarantees of these policies remain in place.
The majority of our partners are not impacted by these changes. However, we are sharing this information to ensure transparency. Those who are directly impacted will be notified by Lincoln.
Below is a list of the products impacted by the changes.
|Issuing Company||Product||Issued from||Guaranteed Interest Rate|
|Jefferson Pilot||Legend 3000||2004-2008||3.00%|
|Jefferson Pilot||LifeSight 30||1995-2004||4.00%|
|Jefferson Pilot||LifeSight 31||1995-2005||4.00%|
|Jefferson Pilot||LifeSight 32||1995-2005||4.00%|
|Jefferson Pilot||UL 101/UL 102/UL 103||1983-1987||4.00%|
|Jefferson Pilot||UL 130/UL 131||1985-1987||4.50%|
|Jefferson Pilot||Vision 20||1994-2003||4.00%|
*The Vision 20 4.00% guarantee is the current guarantee in durations 10+ as a result of a guaranteed persistency bonus. Guarantee in durations 1-9 was 3.5%.
These changes are the result of material changes in future expectations of key cost factors for providing coverage compared to those at time of pricing, including:
- Updated mortality assumptions that include instances of both higher and lower expected mortality versus prior expectations
- Expected lower investment earnings as a result of projected low interest rates and lower future account values
- Updated expenses
- Updated assumptions of future policyholder persistency/lapses
We do not take these changes lightly and have decided to implement them only after in-depth actuarial analysis along with a rigorous review process, guided by our long-term objective of honoring our commitments to policyholders.
Lincoln knows the important role that life insurance plays in helping individuals secure their financial futures, and these policies still provide meaningful value. Lincoln stands ready to answer any questions or assist with any service needed, including carefully explaining all of the available options to clients to help them make the best decision for their particular situation. Please contact your Premier Brokerage representative with any questions.