Compass

Lincoln Term Conversion & Rate Updates (12/20/16)

A message from Andy Bucklee and Mike Burns

Term Product Updates

Dear Valued Partner:

Lincoln is committed to the Term market, and providing our advisors and their clients with a strong line-up of competitively priced Term products and innovative process and underwriting approaches that make obtaining coverage faster and simpler. We also recognize the important role Term Conversions may play with some policyholders and Lincoln is committed to meeting their permanent insurance needs.

Today we have two announcements to share regarding our Term offerings.

The first announcement pertains to Term Conversions. To support our ability to continue offering a comprehensive, competitive and relevant portfolio of permanent and Term insurance products for your clients, Lincoln announced changes in July, 2016 to its Term Conversion Guidelines. Since that time, we have continued to evaluate our Term Conversion Guidelines for policies with an effective date prior to September 12, 2016. This has included many conversations with partners and careful evaluation of the meaningful feedback that we have received.

In October, we reinstated full commissions in policy years two and later for policies with an effective date prior to September 12, 2016. While we could not reinstate our previous guidelines in their entirety, we felt this was a meaningful action that recognizes the servicing needs you provide to your clients. At that time, we acknowledged further adjustments would be forthcoming.

Today we are announcing those adjustments, which pertain only to convertibility options for Term products introduced prior to April 2007:

  • In February, Lincoln will introduce a current assumption UL product that in most cases will be the only conversion option available for policyholders with a Term product introduced prior to April 2007. The UL conversion product will be offered at a price that reflects the anticipated mortality risk of converted policies based on today’s pricing and risk-management standards. These affected older blocks of business were written through legacy insurance companies preceding the Lincoln/Jefferson pilot merger. The policies did not originally provide access to the breadth of today’s competitively priced, fully underwritten products in Lincoln’s portfolio, which did not exist at time of sale. Thus the distinction between these generations and product access on Term Conversions.
  • To aid you and your clients in the transition, there is an extended transition period to March 1, 2017 for these new Term Conversion guidelines on Term products introduced prior to April 2007. 

We are also pleased to share that in the first quarter Lincoln will be making pricing improvements to Lincoln Life Elements® Level Term and Lincoln TermAccel® that will solidify “top 3 carrier” competitiveness in each product’s target market, with the lowest price in select scenarios. Details are still being finalized which we will announce in January, but we are excited to share this news with you today. As a reminder, with all new sales of Term policies, Lincoln offers 7 years of guaranteed conversion to its full product portfolio, while the industry typically offers 5 years without guaranteed product availability. Lincoln also pays commissions in all years, including full commissions in years four and later.

We stand ready to answer any questions you have on either of these changes, and are here to assist with any service required. As a first step, linked below is additional information about the changes.

Term Conversion Guidelines Summary