Lincoln Financial Group has just introduced Lincoln Deferred Income Solutions, its first deferred income annuity product. As said by Lincoln’s assistant vice president of Fixed Annuity Solutions, these products are “resonating in the field.” We’re well aware of that here at Annuity FYI as you can see based on the number of blog posts dedicated to deferred income annuities lately. They are hot products and are helping many people create their own pension-like stream of income in retirement since the number of people having a company pension has drastically declined. The information about Lincoln’s new products comes from Bank Investment Consultant’s “Lincoln Financial Launches Deferred Income Annuity,” by Margarida Correia.
The Lincoln Deferred Income Solutions annuity can be purchased in a lump sum payment of anywhere from $10,000 to $1 million. For those looking to use more than $1 million to purchase their deferred income annuity, they may be able to do so with the approval of Lincoln’s home office. The deferral period is anywhere from two to forty years, typical of today’s deferred income annuities. Knowing what the exact amount of your annuity payment will be when you start receiving them is one of the major benefits of these products. You can choose to have the income guaranteed for life or for a certain number of years. While this annuity is not completely liquid, it does allow for payments to be accelerated several months if you have a financial need that comes up. You cannot access the money during your deferral period though. Death benefits are available during both the deferred and the income period of your annuity contract. The start date when you begin taking income payments can either be moved up or pushed back without receiving a penalty.
With all of the benefits shown for deferred income annuities, it’s no surprise that sales increased 151% from the first half of 2012 to the first half of 2013. As the fastest growing annuity product, deferred income annuities still don’t even make up 1% of total annuity sales. That is likely to change since they were only introduced two years ago. Last year there were six companies selling deferred income annuities. With Lincoln joining the mix, there are now ten companies offering products and two more with deferred income annuities in the works.