Lincoln Financial Group continues its commitment to the long-term care marketplace and solutions that help meet the changing needs of clients with the launch of enhancements to our variable universal life insurance linked-benefit product within the Lincoln MoneyGuard® portfolio, Lincoln MoneyGuard Market Advantage® (2022). Lincoln MoneyGuard Market Advantage® (2022) will be available effective August 15, 2022, subject to state approvals.
MoneyGuard Market Advantage® (2022) provides pricing improvements that allows for even greater benefit growth potential and adds the new Benefit Transfer Rider (BTR) to all policies at no additional cost. This innovative rider provides beneficiaries the option to leverage some or all their death benefit proceeds to enhance their own benefits on an existing MoneyGuard Fixed AdvantageSM or MoneyGuard Market Advantage® policy, all with no additional underwriting requirements.
Additionally, the Flexible Care Cash (FCC) benefits are extending to seven days a week (previously five) providing clients greater flexibility and access to cash for informal care needs.
Lincoln MoneyGuard Market Advantage® (2022) has a positive rate change due to a reduction of premium loads. This improvement will result in greater Accumulation Value growth potential as more of the premiums will be applied to the policies subaccounts and/or fixed account investment selections.
Greater Accumulation Value growth potential provides the opportunity for more growth in policy benefits (Long-term Care and Death Benefit)
- Benefit increases will range between 2% – 9% (assuming gross illustrated range of returns between 6% – 7%) if comparing LTC benefits at attained age 85.
- Single pay designs will see the higher impact (9%) with the improvement percentage reducing as flex pay designs stretch out (ranging down to 2%).
- A rate adjustment was made to a factor within the premium calculation which will reflect policy size. Thus, policies with a $100,000 specified amount will have the same no-lapse premium as current MoneyGuard Market Advantage, with slightly higher premiums for specified amounts below $100,000 and slightly lower premiums for specified amounts above $100,000. The range of difference is generally within 1-2%.
Benefits Transfer Rider
The BTR provides beneficiaries the choice of additional flexibility with the option to use some ($25,000 minimum) or all of their death benefit proceeds to enhance benefits on their existing MoneyGuard policy with no additional underwriting requirements. Qualifications to use the BTR are:
- Insured and beneficiary are MoneyGuard policyholders (MoneyGuard Fixed AdvantageSM or MoneyGuard Market Advantage®)
- The Benefit Transfer Rider is on both policies
- The beneficiary is the insured on their policy
At the time of first death claim, the beneficiary has the following choices:
- Use full death benefit to purchase more benefits on their own policy.
- Take partial death benefit income tax-free and use remainder to purchase more benefits on their own policy.
- Take full death benefit income tax-free.
Benefits and Values
Notable features associated with enhancing benefits through the Benefit Transfer Rider include the following:
- Utilization of the BTR will increase existing policy benefits for the following values:
- Long-Term Care Benefits
- Death Benefit
- Surrender Value
- The increase in long-term care and death benefit will always be more than the amount of death benefit transferred.
- Increased policy benefits utilizing the BTR will not increase charges on the existing policy and would not require underwriting.
Distinct advantages to the Benefit Transfer Rider for planning purposes includes:
- No decision until time of claim — Allows clients to make an informed decision based on their unique situation.
- Customizable policies — Personalize to meet individual client’s needs instead of sharing benefits.
- Beyond married couples — Use with couples, siblings, parents and for estate planning.
Notable detail associated with how BTR works on MoneyGuard Market Advantage: BTR funding purchases a paid-up benefit on top of the base policy benefits and does not get invested in subaccounts, the Fixed Account, or applied to the Accumulation Value. BTR benefits do not increase or decrease over time (unless increasing due to elected inflation) due to market fluctuations.
Flexible Care Cash
Flexible Care Cash (FCC) benefits will now be available for seven days a week (previously limited to five days a week).
- Provides 50% of the maximum daily benefit in cash to compensate informal caregivers including spouses.
- Flexible Care Cash is available as long as Base LTC Limit Value remains on the policy.
- Clients have ability to use both FCC and reimbursement but are limited to one option per day.
- Must be part of the plan of care.
Lincoln is excited to make the Benefit Transfer Rider (BTR) part of the MoneyGuard Advantage product suite value proposition.
- Subject to state approval, MoneyGuard Market Advantage policies placed inforce prior to the addition of the BTR on August 15, 2022, will have the BTR added to their contracts as part of a supplementary mailing. This mailing will likely occur early next year and will apply to all MoneyGuard Market Advantage policies issued since Feb. 2021.
- We will not be able to add BTR to inforce MoneyGuard Market Advantage policies in the state of Montana, since our new product will be filed with gender distinct pricing and the old product is unisex.
- There are no plans to add the BTR to other inforce MoneyGuard products.
Additionally, the enhancement to seven days per week for Flexible Care Cash eligibility will be applied to inforce MoneyGuard Market Advantage policies in combination with the BTR inclusion noted above.
Availability and Transition Rules
Applications for Lincoln MoneyGuard Market Advantage® (2022) will be accepted beginning on August 15, 2022 in all approved states.
- For applications to qualify for the current MoneyGuard Market Advantage®, an illustration and the completed Part 1 must be signed, dated, and received in-good-order by Lincoln’s home office by Friday, September 16, 2022.
- For pending or issued MoneyGuard Market Advantage® business on or after August 15, 2022, Lincoln will accept requests with a revised illustration to change to MoneyGuard Market Advantage® (2022). Please note the updated Long-Term Care Insurance Outline of Coverage should be provided to the client.
- For placed business, normal internal replacement guidelines apply. Rewrites will not be accepted.
- As of August 15, 2022, Lincoln DesignItSM and WinFlex will be updated with the new product. During the transition period both products can be run.
- Ensure that you are appropriately credentialed. Clients of advisors who are not properly credentialed to solicit business when the paperwork is submitted will be subject to the product in effect on the date when the advisor becomes properly credentialed and resubmits the paperwork.
- Remember that once an application is submitted, the Personal History Interview (PHI) must be completed within 60 days of submission. In addition, the case must be placed within 90 days of the PHI. If these conditions are not met, the case will be closed out. If a case is reopened, a new Part 1 must be submitted, and the case will be subject to the product available at that time.