Profile: Lincoln National Corp (LNC.N)
28 Nov 2014
Lincoln National Corporation (LNC), incorporated on January 5, 1968, is a holding company, which operates multiple insurance and retirement businesses through subsidiary companies. Through its business segments, the Company sells a range of wealth protection, accumulation and retirement income products and solutions. These products include fixed and indexed annuities, variable annuities, universal life insurance (UL), variable universal life insurance (VUL), linked-benefit UL, term life insurance, indexed universal life insurance, employer-sponsored retirement plans and services, and group life, disability and dental. The Company operates in four segments: Annuities, Retirement Plan Services, Life Insurance and Group Protection. As of December 31, 2012, Lincoln Financial Distributors (LFD) had approximately 540 internal and external wholesalers (including sales managers).
The Annuities segment provides tax-deferred investment growth and lifetime income opportunities for its clients by offering fixed (including indexed) and variable annuities. The Company offers guaranteed benefit riders with certain of its variable annuity products, such as a guaranteed death benefit (GDB), a guaranteed withdrawal benefit (GWB), a guaranteed income benefit (GIB) and a combination of such benefits. As of December 31, 2012, it offered product riders, including the Lincoln Lifetime Income Advantage, Lincoln Lifetime Income Advantage 2.0 and Lincoln Lifetime Income Advantage 2.0 Protected Funds, which are hybrid benefit riders combining aspects of GWB and GIB. These benefit riders allow the contract holder the ability to take income at a maximum rate of up to 5% of the guaranteed amount when they are above the lifetime income age or income through i4LIFE Advantage with the GIB. Lincoln Lifetime Income Advantage, Lincoln Lifetime Income Advantage 2.0 and Lincoln Lifetime Income Advantage 2.0 Protected Funds provide higher income if the contract holder delays withdrawals, including both a 5% enhancement to the guaranteed amount each year a withdrawal is not taken for a specified period of time and an annual step-up of the guaranteed amount to the current contract value.
Contract holders under Lincoln Lifetime Income Advantage and Lincoln Lifetime Income Advantage 2.0 are subject to restrictions on the allocation of their account value within the various investment choices. Contract holders under Lincoln Lifetime Income Advantage 2.0 Protected Funds are subject to the allocation of their account value to its Protected Strategies fund options and certain fixed income options. The Company also offered the i4LIFE Advantage and i4LIFE Advantage Guaranteed Income Benefit Protected Funds riders. The Company also offered the 4LATER Advantage and 4LATER Advantage Protected Funds. These riders provide a minimum income base used to determine the GIB floor when a client begins income payments under i4LIFE Advantage or i4LIFE Advantage Guaranteed Income Benefit Protected Funds.
The Company offers single and flexible premium fixed deferred annuities. Single premium fixed deferred annuities are contracts that allow only a single premium to be paid. Flexible premium fixed deferred annuities are contracts that allow multiple premium payments on either a scheduled or non-scheduled basis. The Company’s traditional fixed-rate deferred annuity products include Lincoln ClassicSolution Fixed Annuity, Lincoln Select, Lincoln Smart Course, Lincoln MYGuarantee Plus and Lincoln GrowSmart Fixed Annuity. The Company’s fixed indexed deferred annuity products include Lincoln OptiPoint, Lincoln OptiChoiceSM and Lincoln New Directions. The Company’s fixed indexed annuities allow the contract holder to elect an interest rate based on the performance of the Standard & Poor’s (S&P) 500 Index (S&P 500). The Annuities segment distributes its individual fixed and variable annuity products through LFD.
Retirement Plan Services
The Retirement Plan Services segment provides employers with retirement plan products and services, primarily in the defined contribution retirement plan marketplace. While the Company’s focus is employer-sponsored defined contribution plans, it also serves the defined benefit plan and individual retirement account (IRA) markets. The Company provides a range of plan investment vehicles, including individual and group variable annuities, group fixed annuities and mutual fund-based programs. The Company also offers a range of plan services, including plan recordkeeping, compliance testing, participant education and other related services. The Retirement Plan Services segment brings three primary offerings to the employer-sponsored market: LINCOLN DIRECTOR group variable annuity, LINCOLN ALLIANCE program, and Multi-Fund variable annuity. LINCOLN DIRECTOR and Multi-Fund products are variable annuities. The LINCOLN ALLIANCE program is mutual fund-based. These offerings primarily cover the 403(b) and 401(k) marketplace.
The LINCOLN DIRECTOR product offers participants a range of investment options from several fund families and a fixed account. The LINCOLN ALLIANCE program is a defined contribution retirement plan solution aimed at mid to large employers. Multi-Fund Variable Annuity is a defined contribution retirement plan solution with full-bundled administrative services and high quality investment choices marketed to small- to mid-sized healthcare, education, governmental and not-for-profit plans. Retirement Plan Services products are primarily distributed by LFD. The Multi-Fund program is sold primarily by affiliated advisors.
The Life Insurance segment focuses on the creation and protection of wealth for its clients by providing life insurance products, including term insurance, a linked-benefit product (which is a UL policy linked with riders that provide for long-term care costs), indexed UL, and both single (including COLI and BOLI) and survivorship versions of UL and VUL products. The Company offers four categories of life insurance products consisting of Interest-Sensitive Life Insurance, Universal Life Insurance, Group Disability Insurance, Group Dental, Group Vision, Accident Insurance, Critical Illness Insurance and Group Medical.
The Company offers employer-sponsored group term life insurance products including basic, optional and voluntary term life insurance to employees and their dependents. In addition benefits may be provided in the event of a covered individual’s accidental death or dismemberment. The Company offers employer-sponsored universal life insurance for employees and their covered dependents. The Company offers short- and long-term employer-sponsored group disability insurance, which protects an employee against loss of wages due to illness or injury. Short-term disability generally provides benefits for up to 26 weeks following a short waiting period, ranging from 1 to 30 days. Long-term disability provides benefits following a longer waiting period, usually between 30 and 180 days and provides benefits for a longer period, at least 2 years and typically extending to normal (Social Security) retirement age.
The Company offers employer-sponsored group dental insurance, which covers a portion of the cost of eligible dental procedures for employees and their dependents. Products offered include indemnity coverage, which does not distinguish benefits based on a dental provider’s participation in a network arrangement, and a Preferred Provider Organization (PPO) product that does reflect the dental provider’s participation in the PPO network arrangement, including agreement with network fee schedules. The Company offers employer-sponsored fully-insured vision plans with a range of benefits for protecting covered members’ sight and vision health. The Company offers employer-sponsored group accident insurance products for employees and their covered dependents. This product is predominantly purchased on an employee-paid basis. Accident insurance provides scheduled benefits for over 30 types of benefit triggers related to accidental causes, and it is available for non-occupational accidents exclusively or on a 24-hour coverage basis.
The Company offers employer-sponsored group critical illness insurance to employees and their covered dependents. The Company manages employer-sponsored benefits designed to supplement a company’s medical plan by reimbursing executives and eligible dependents for health care expenses not covered by the basic plan. Along with medical expense reimbursement, EXEC-U-CARE plans include Accidental Death and Dismemberment coverage, EXEC-U-CARE CONCIERGE health care assistance and TravelConnect travel assistance services.
The Company use reinsurance to protect its insurance subsidiaries against the severity of losses on individual claims and unusually serious occurrences, in which a number of claims produce an aggregate extraordinary loss. We use reinsurance to protect our insurance subsidiaries against the severity of losses on individual claims and unusually serious occurrences in which a number of claims produce an aggregate extraordinary loss. The Company reinsures approximately 30% to 35% of the mortality risk on newly issued non-term life insurance contracts and approximately 25% to 30% of total mortality risk, including term insurance contracts. The Company obtains reinsurance from a diverse group of reinsurers, and it monitors concentration and financial strength ratings of its principal reinsurers. The Company also utilizes inter-company reinsurance agreements to manage its statutory capital position, as well as its hedge program for variable annuity guarantees.
Lincoln National Corp
150 N RADNOR CHESTER RD
RADNOR PA 19087