The Lincoln Level Advantage contract has 1-year term, 6-year term, 6-year annual lock, 6-year spread, 3-year participation, and 1-year performance trigger options to choose from, and you can track a variety of different indexes depending on what investment term option you choose. You can also choose to design these contracts with an account value or return of premium death benefit.
If you choose the 1-year investment term option you have 5 different index options to choose from as well as a 10%, 15%, 20%, or 100% level of protection depending on what index investment option/s were chosen.
If you choose the 6-year investment term option, you have 4 different index options and choose from as well as a 20% or 30% level of protection depending on what index investment option/s were chosen. At the end of that 6-year term, you have the option to renew the contract at the current cap rates, do an internal exchange into another product, do an external transfer to another product, or liquidate the account.
If you choose the 6-year annual lock contract and track one or a combination of the four index options offered, it operates like the 1-year contract except your cap rate is locked in for 6 years at issue of the contract, and you only have the 10% level of protection option. At the end of that 6-year term, you have the option to renew the contract at the current cap rates, do an internal exchange into another product, do an external transfer to another product, or liquidate the account.
If you choose the 6-year participation rate contract, you have the option to track one or a combination of the 5 index options offered while having a 10% level of protection. To give you an idea of what that could look like the S&P 500 option currently has a 110% participation rate with 10% protection on the downside.
If you choose the 1-year performance trigger contract you have the option to track one or a combination of index options as well as having the option to select a 10%, 15% or 20% level of protection depending on what index option/s were chosen. As an example, right now if you were to choose a 10% level of protection with the S&P 500 index option and had returns above 0.00% for the year, that would “trigger” a performance lock-in of 10% for the year.
In closing I would like to leave you with an example of how strong the Lincoln Level Advantage contract is right now. If you had a client that chose to do the 6-year investment term contract, selected the S&P Index and account value death benefit, and chose the 20% level of protection, they would not currently have a cap on their upside potential right now. The current cap rate listed for this design is “uncapped”. So really, you just have market participation with a 20% level of protection against the downside and no fees. If your client was to choose the same thing as above, except they wanted 30% protection on the downside, they would have a 95% cap over the 6-year point-to-point term. So, the downside with this option is that if you put in $100,000 and grew it to $250,000 over the next 6 years, you would only be able to keep $195,000 of it.
If you would like to learn more about the Lincoln Level Advantage contract and the different designs that you can create, please give me a call and/or click on the link to the Lincoln Level Advantage website below.
