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©2007 Lincoln National Corporation LCN0708-2007192 (FAX-0364-07) 8/07 Lincoln Living Income SM Advantage Presenter Name Title Date “I will prepare and someday my chance will come.” – Abraham Lincoln
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LCN0708-2007192 2 Agenda items Having the right tools for retirement Planning your retirement income How your fixed indexed annuity with the Lincoln Living Income SM Advantage can help
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LCN0708-2007192 3 The right tools for the journey A Lincoln fixed indexed annuity can provide Wealth preservation Growth potential Guarantees Income The assurance of begin backed by the strength and stability of The Lincoln National Life Insurance Company
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LCN0708-2007192 4 The right tools for the journey Many factors make retirement planning difficult: Your retirement may last 20 or 30 years You have lots of options of how to enjoy your retirement Living expenses can change substantially, depending on how you spend your retirement Traditional income sources, such as Social Security, are uncertain
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LCN0708-2007192 5 The right tools for the journey Adding Lincoln Living Income SM Advantage to your fixed indexed annuity can help by: Providing a guaranteed income for life Allowing you control over your income to help plan for life during your retirement
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LCN0708-2007192 6 Focus on planning You can be guaranteed a portion of your retirement income to help cover your costs of living in retirement. Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 7 Lincoln Living Income SM Advantage An optional benefit that provides an income stream from your annuity contract It is different from annuitization You retain control over your payments and enjoy the benefits of your annuity contract You have the flexibility to start, stop, and skip payments Offers the potential to increase payments by waiting to take them Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 8 Lincoln Living Income SM Advantage benefits Guaranteed income for life Guaranteed Payment Amount is guaranteed if you do not take more than this amount annually Guaranteed Payment Amount is guaranteed for life, even if your Guaranteed Payment Amount withdrawals deplete your contract value to $0 Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 9 Lincoln Living Income SM Advantage benefits Flexibility and control Adjust to your life’s changing income needs Start, stop, or skip a payment Get payments automatically Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 10 Lincoln Living Income SM Advantage benefits Step-up your income payments Plan ahead Increase your Payment Percentage, or Lifetime Benefit Factor, by waiting to take payments Potentially increase your contract value by letting it accumulate longer This may increase your Income Base, or Lifetime Benefit Base Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 11 Lincoln Living Income SM Advantage benefits Easier planning Estimate retirement expenses Decide how much income you will need Using your income goal and your anticipated retirement date, you can help plan for how much you will need to accumulate before retirement with the Lincoln Living Income Advantage Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 12 Lincoln Living Income SM Advantage benefits Maintain your annuity benefits Death benefit stays intact Shift allocations among fixed and indexed accounts Keep control over your assets Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 13 Lincoln Living Income SM Advantage Calculation: Payment Percentage x Income Base = Guaranteed Payment Amount
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LCN0708-2007192 14 Lincoln Living Income SM Advantage This hypothetical example assumes a fixed indexed annuity contract purchased with a single payment of $100,000, covering a single life at age 60, with an annual credited rate of 6.00%. It assumes no partial withdrawals before payments begin and no annual withdrawal that exceeds the Guaranteed Payment Amount afterward. It also assumes a constant 0.40% annual fee for Lincoln Living Income Advantage throughout. It is not indicative of projected credited rates of any Lincoln fixed indexed annuity. For joint covered lives, different Payment Percentages apply, and age is based on the age of the younger covered life.
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LCN0708-2007192 15 Lincoln Living Income SM Advantage Meet Ellen Age: 70 Widowed Currently retired She has: $150,000 for a Lincoln fixed indexed annuity with the Lincoln Living Income Advantage Enough assets to live for another five years before she will need to supplement her income
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LCN0708-2007192 16 Lincoln Living Income SM Advantage Sample hypothetical annual payment amounts If Ellen plans to take payments in: Her Payment Percentage would be: Guaranteed Payment Amount at hypothetical annual credited rates: 0%3%6% 1 year (age 71) 6.00%$9,000$9,233$9,502 3 years (age 73) 6.00%$9,000$9,717$10,591 5 years (age 75) 7.50%$11,250$12,783$14,756 This table assumes hypothetical annual credited rates of 0%, 3%, and 6% in a fixed indexed annuity contract, and assumes no partial withdrawals before payments begin and no annual withdrawal that exceeds the Guaranteed Payment Amount afterward. It also assumes a constant 0.40% annual fee for the Lincoln Living Income Advantage for all years. It is not indicative of projected credited rates of any Lincoln fixed indexed annuity product.
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LCN0708-2007192 17 Lincoln Living Income SM Advantage Meet Mark and Jill Ages: 58 and 57 Retiring in the next 10 years They have: $200,000 for a Lincoln fixed indexed annuity with the Lincoln Living Income Advantage
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LCN0708-2007192 18 Lincoln Living Income SM Advantage This table assumes hypothetical annual credited rates of 0%, 3%, and 6% in a fixed indexed annuity contract and assumes no partial withdrawals before payments begin and no annual withdrawal that exceeds the Guaranteed Payment Amount afterward. It also assumes a constant 0.40% annual fee for the Lincoln Living Income Advantage for all years. It is not indicative of projected credited rates of any Lincoln fixed indexed annuity product. Sample hypothetical annual payment amounts If Mark and Jill plan to take payments in: Their Payment Percentage would be: Guaranteed Payment Amount at hypothetical annual credited rates: 0%3%6% 1 year (age 58) 4.00%$8,000$8,207$8,446 5 years (age 62) 5.50%$11,000$12,499$14,428 10 years (age 67) 7.00%$14,000$18,076$24,087
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LCN0708-2007192 19 Lincoln Living Income SM Advantage Considerations: Available with your Lincoln fixed indexed annuity contract The cost is 0.40% of your contract value annually Cost of 0.40% will remain constant during your surrender charge period. It can vary annually after that, but will never exceed 1.0% You must wait at least 12 months to begin taking your income payments Withdrawals are subect to income taxes, and if withdrawn before age 59 1/2, a 10% federal penalty tax may apply.
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LCN0708-2007192 20 Additional withdrawals If you withdraw more than the annual Guaranteed Payment Amount: Your Guaranteed Payment Amount in subsequent years will be reduced significantly Any withdrawals exceeding your contract’s 10% annual free withdrawal will be subject to a surrender charge and a Market Value Adjustment Withdrawals in excess of the Guaranteed Payment Amount reduce your future Guaranteed Payment Amounts proportionally Consider any withdrawal in excess of the Guaranteed Payment Amount carefully
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LCN0708-2007192 21 Other considerations Availability Single or joint owners between ages 50 – 85 Joint covered lives must be spouses at the time of purchase Once chosen, single or joint life basis cannot be changed
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LCN0708-2007192 22 Other considerations Cancellation After benefit has been in effect for at least five years Effective with next contract anniversary Change in the ownership of the annuity contract may result in termination of the rider
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LCN0708-2007192 23 Other considerations Required Minimum Distributions (RMDs) Meet your RMD with the Lincoln Living Income SM Advantage If your RMD amount exceeds your Guaranteed Payment Amount, it will not reduce your subsequent Guaranteed Payment Amounts
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LCN0708-2007192 24 The Lincoln National Life Insurance Company Strong enough to live up to our name A.M. Best A+ (2nd highest of 16) FitchAA (3rd highest of 24) Moody’s Aa3 (4th highest of 21) Standard & Poor’s AA (3rd highest of 21) These ratings apply only to the claims-paying ability of The Lincoln National Life Insurance Company and do not imply approval of the product. As of July 25, 2007, these ratings represent the most recently affirmed ratings by the respective agencies. Individual issuing companies are separately responsible for satisfying their own financial and contractual obligations.
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LCN0708-2007192 25 Important information This material was prepared to support the promotion and marketing of fixed indexed annuity products. Lincoln Financial Group ® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein.
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LCN0708-2007192 26 Important disclosure Lincoln Living Income SM Advantage Guaranteed Lifetime Withdrawal Benefit (GLWB) rider (form AE-217 or state variations) is not available with all Lincoln fixed indexed annuities. Subject to rider issue age limits, which may differ from the issue age limits of the fixed indexed annuity product. May not be available in all states. Limitations and exclusions may apply. Fixed indexed annuities are issued by The Lincoln National Life Insurance Company, Fort Wayne, Indiana. The Lincoln National Life Insurance Company is not authorized nor does it solicit business in the state of New York. The contract may be subject to a Market Value Adjustment. Contract may be referred to as “certificate” in certain states (certificate may not be available in all states). The certificate is a group annuity certificate issued under a group annuity contract issued by The Lincoln National Life Insurance Company to a group annuity trust. Guarantees and contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company.
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LCN0708-2007192 27 Important disclosure Unlike income payments received with a traditional annuitization, Guaranteed Payment Amounts provided by the Lincoln Living Income SM Advantage are treated as withdrawals. Withdrawals of taxable amounts from an annuity are subject to income tax, and withdrawals prior to age 59½ may be subject to a 10% federal penalty. Purchase of the contract through a qualified plan does not provide any additional tax deferral benefits beyond those already provided through the plan. If you are purchasing the contract through such a plan, you should consider purchasing it for its death benefit, annuity options, and other non-tax related benefits. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations.
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LCN0708-2007192 28 Questions?
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