Prospectus 1
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and registered representatives of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | If you make a withdrawal in excess of the free withdrawal amount before the 6th anniversary since your last Purchase Payment, you may be assessed a surrender charge of up to 7% of the amount withdrawn, declining to 0% over that time period. For example, if you make a withdrawal of $100,000 during the first year after your Purchase Payment, you could be assessed a charge of up to $7,000 on the Purchase Payment withdrawn. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Transaction Charges | None, other than surrender charges. | • Charges and Other Deductions | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Account Value Death Benefit | 1.10%1 | 1.10%1 | ||
Base Contract – Guarantee of Principal Death Benefit | 1.30%1 | 1.30%1 | ||
Fund Fees and Expenses | 0.48%1 | 1.52%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
1As a percentage of average Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract, which could add surrender charges that substantially increase costs. | ||||
Lowest Annual Cost: $1,879 | Highest Annual Cost: $3,522 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No surrender charges• No additional Purchase Payments, transfers, or withdrawals | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No surrender charges• No additional Purchase Payments, transfers, or withdrawals |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash.• Withdrawals may result in surrender charges. If you take a withdrawal, any surrender charge will reduce the value of your Contract or the amount of money that you actually receive. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract. | • Principal Risks• Investments of the Variable Annuity Account | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Investment Professional Compensation | • Your registered representative may receive compensation for selling this Contract to you, both in the form of commissions and because we may share the revenue it earns on this Contract with the professional’s firm. (Your investment professional may be your broker, investment adviser, insurance agent, or someone else).• This potential conflict of interest may influence your investment professional to recommend this Contract over another investment. | • Distribution of the Contracts• Principal Risks | ||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
Surrender charge (as a percentage of Purchase Payments surrendered/withdrawn):1 | 7.00% |
1 | The surrender charge percentage is reduced over a 6-year period at the following rates: 7%, 7%, 6%, 5%, 4%, 3%. We may reduce or waive this charge in certain situations. See Charges and Other Deductions – Surrender Charge. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1, 2 | ||
Account Value Death Benefit | 1.10% | |
Guarantee of Principal Death Benefit | 1.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 1.10% after the Annuity Commencement Date. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
2 | Each base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from Contract Value to the Subaccounts and the Indexed Accounts on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.48% | 1.52% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.48% | 1.19% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$10,249 | $15,920 | $20,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$3,249 | $9,920 | $16,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$9,851 | $14,740 | $18,888 | $31,472 |
1 year | 3 years | 5 years | 10 years | |||
$2,851 | $8,740 | $14,888 | $31,472 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | Nasdaq-100® Index |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. If you take a withdrawal or surrender the Contract, any applicable surrender charges will reduce the value of your Contract or the amount of money that you ultimately receive. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | You may incur a surrender charge upon the surrender or withdrawal of Contract Value. See Charges and Other Deductions – Surrender Charge. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. The Protection Level or Floor Protection exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Losses you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments may be limited by any applicable Participation Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. If the Participation Rate is less than 100%, the increase in your Segment Value will never reflect the entire corresponding performance in the applicable index over the Indexed Term. The Participation Rate exists for the full term of the Indexed Segment. The Participation Rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Participation Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the index, which means that your return may be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for Contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
5. | Gains in your Indexed Segments are limited by any applicable Spread Rate. If the performance of the index is positive, the performance of the Indexed Account will be reduced by the Spread Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Spread Rate applies for the full term on the Indexed Segment. The Spread Rate may be higher for Contracts with the Guarantee of Principal Death Benefit. Spread Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
6. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
7. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
8. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
9. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
10. | The available Indexed Accounts with applicable Crediting Methods, Protection Levels, and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, and Crediting Methods are available to you. There is no guarantee that an Indexed Account will be available in the future. |
You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. | |
11. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
12. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index, and Protection Level or Floor Protection, if available. The Crediting Method in effect at the time for new Indexed Segments will apply. The Crediting Method for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP PIMCO Low Duration Bond Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
13. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
14. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
15. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Rate |
• | Performance Cap |
• | Participation Rate |
• | Spread Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap without Annual Locks | You receive all positive index performance up to the Performance Cap at the end of the term. |
Participation Rate | You receive an amount equal to the Participation Rate times the positive index performance at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
Spread Rate | You receive all positive index performance above the Spread Rate at the end of the term. |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap with Annual Locks | An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date. You receive all positive index performance up to the Performance Cap each year of the Indexed Term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 3-Year with a 115% Participation Rate
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +20% | 115% | 20% x 115% = 23% | $100,000 | $123,000 |
Indexed Account = 3-Year with a 95% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +15% | +95% | 15% x 95% = 14.25% | $100,000 | $114,250 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 6-Year with a 5% Spread Rate and 15% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Spread Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2029 | +100% | +5% | +95% | $100,000 | $195,000 |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Participation Rate, and there is positive performance, the Performance Rate that we apply on the Indexed Segment End Date may be less than, equal to, or greater than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with a Spread Rate, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date will be less than the actual index performance. If the positive index performance is less than the Spread Rate, your return will be zero. |
• | If you choose an Indexed Segment with an Annual Lock, and there is positive performance, the Performance Rate on the Indexed Segment End Date could be less than the actual index performance. |
• | If you select an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you previously selected an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. The Floor Protection method is no longer available. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or protection method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that more Contractowners than expected will qualify for waivers of the surrender charge; |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 1.30%* |
Account Value Death Benefit | 1.10%* |
Number of contract anniversaries since Purchase Payment was invested | |||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | |||||||
Surrender charge as a percentage of the surrendered or withdrawn Purchase Payments | 7% | 7% | 6% | 5% | 4% | 3% | 0% |
• | A surrender or withdrawal of a Purchase Payment beyond the sixth anniversary since the Purchase Payment was invested; |
• | Withdrawals of Contract Value during a Contract Year to the extent that the total Contract Value withdrawn during the current Contract Year does not exceed the free amount. The free amount is equal to the greater of 10% of the current Contract Value or 10% of the total Purchase Payments (this does not apply upon surrender of the Contract); |
• | Purchase Payments used in the calculation of the initial benefit payment to be made under an Annuity Payout option (other than the i4LIFE® Indexed Advantage option); |
• | A surrender or withdrawal of any Purchase Payments, as a result of permanent and total disability of the Contractowner as defined in Section 22(e)(3) of the tax code, if the disability occurred after the effective date of the Contract and before the 65th birthday of the Contractowner. For contracts issued in the state of New Jersey, a different definition of permanent and total disability applies;; |
• | A surviving spouse, at the time he or she assumes ownership of the Contract as a result of the death of the original owner (however, the surrender charge schedule of the original Contract will continue to apply to the spouse's Contract); |
• | A surrender or withdrawal of any Purchase Payments, as a result of the admittance of the Contractowner to an accredited nursing home or equivalent health care facility, where the admittance into the facility occurs after the effective date of the Contract and the owner has been confined for at least 90 consecutive days; |
• | A surrender or withdrawal of any Purchase Payments as a result of the diagnosis of a terminal illness of the Contractowner. Diagnosis of a terminal illness must be after the effective date of the contract and results in a life expectancy of less than one year as determined by a qualified professional medical practitioner; |
• | A surrender of the Contract as a result of the death of the Contractowner or Annuitant; |
• | Purchase Payments when used in the calculation of the initial Account Value under i4LIFE® Indexed Advantage; |
• | Periodic Income Payments made under i4LIFE® Indexed Advantage or periodic payments made under any Annuity Payout option made available by us; or |
• | A surrender of the Contract or a withdrawal of Contract Value from contracts issued to Selling Group Individuals; |
1. | The free amount will be withdrawn from Purchase Payments on a first in-first out (“FIFO”) basis. |
2. | Prior to the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) until exhausted; then |
• | from earnings until exhausted. |
3. | On or after the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge no longer applies until exhausted; then |
• | from earnings until exhausted; then |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge still applies until exhausted. |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your broker-dealer and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Account Value Death Benefit | Provides a Death Benefit equal to the Contract Value. | • 1.10% (as a percentage of Contract Value invested in the Subaccounts) | • Poor investment performance could significantly reduce the benefit.• Withdrawals could significantly reduce the benefit. |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 1.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the Contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age |
70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. | |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
High total return (including income and capital gains) consistent with preservation of capital over the long term. | American Funds Asset Allocation Fund - Class 4 | 0.80% | 14.84% | 11.43% | 11.13% |
Growth of capital. | American Funds Growth Fund - Class 4 | 0.85% | 21.68% | 25.12% | 19.44% |
High total investment return. | BlackRock Global Allocation V.I. Fund - Class III This fund will be substituted with the LVIP BlackRock Global Allocation Fund on or about June 3, 2022. Consult your registered representative. | 1.00%2 | 6.42% | 9.71% | 7.68% |
Long-term growth of capital. | Fidelity® VIP Mid Cap Portfolio - Service Class 2 | 0.86% | 25.31% | 13.32% | 13.00% |
To provide capital appreciation. | First Trust Capital Strength Portfolio – Class I | 1.10%2 | 25.30% | N/A | N/A |
To provide total return by allocating among dividend-paying stocks and investment grade bonds. | First Trust/Dow Jones Dividend & Income Allocation Portfolio - Class I6, | 1.19% | 12.25% | 9.54% | N/A |
Long-term capital appreciation; preservation of capital is also an important consideration. | Franklin Rising Dividends VIP Fund - Class 4 | 0.98% | 26.63% | 16.69% | 14.28% |
To seek to achieve a high level of total return on its assets through a combination of capital appreciation and current income. | Invesco V.I. Equally-Weighted S&P 500 Fund - Series II Shares5, This fund is not available in contracts issued on or after June 21, 2021. | 0.60% | 28.88% | 15.14% | 14.91% |
To maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. | JPMorgan Insurance Trust Core Bond Portfolio - Class 2 | 0.79%2 | -1.66% | 3.32% | 2.72% |
High total investment return. | LVIP BlackRock Global Allocation Fund - Service Class This fund will be available on or about June 3, 2022. Consult your registered representative. | 0.98%2 | 7.31% | N/A | N/A |
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
Capital Appreciation. | LVIP MFS Value Fund - Service Class | 0.87%2 | 25.15% | 12.04% | 13.21% |
To seek a high level of current income consistent with preservation of capital. | LVIP PIMCO Low Duration Bond Fund - Service Class | 0.75%2 | -0.89% | 1.66% | N/A |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. | LVIP SSGA International Index Fund - Service Class | 0.62%2 | 10.78% | 9.13% | 7.45% |
To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. | LVIP SSGA S&P 500 Index Fund - Service Class4 | 0.48% | 28.10% | 17.89% | 15.98% |
To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. | LVIP SSGA Small-Cap Index Fund - Service Class | 0.63%2 | 14.27% | 11.28% | 12.48% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the greater of 0 and the Index performance for the Indexed Segment as determined on the Valuation Date the Interim Value is calculated;
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = 999% minus the Spread Rate;
H = the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term;
I = the greater of zero, or the percentage change of the Index Value between the Start Date and Valuation Date of the calculation minus the Spread Rate.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is |
set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or is discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap, Participation Rate, Performance Trigger Rate, or Spread Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your registered representative. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
3 Year | 3 Year | ||
Indexed Term length | 36 months | 36 months | |
Months since Indexed Term Start Date | 33 | 15 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Participation Rate | 70% | 70% | |
Months to End Date | 3 | 21 |
Change in Index Value is -30% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(214) | |
A. Sum of 1 + 2 | $797 | $783 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $797 | $783 |
Change in Index Value is -10% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(73) | |
A. Sum of 1 + 2 | $970 | $924 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $970 | $924 |
Change in Index Value is 20% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $139 | $131 | |
A. Sum of 1 + 2 | $1,138 | $1,128 | |
B. Application of pro-rated Participation Rate | $1,140 | $1,140 | |
Account Interim Value = Minimum of A and B | $1,138 | $1,128 |
Change in Index Value is 40% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $278 | $264 | |
A. Sum of 1 + 2 | $1,277 | $1,261 | |
B. Application of pro-rated Participation Rate | $1,280 | $1,280 | |
Account Interim Value = Minimum of A and B | $1,277 | $1,261 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection Level | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
6 Year | 6 Year | ||
Indexed Term length | 72 Months | 72 Months | |
Months since Indexed Term Start Date | 60 | 12 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 15% | 15% | |
Spread Rate | 5% | 5% | |
Months to End Date | 12 | 60 |
Change in Index Value is -20% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $(90) | $(120) | |
A. Sum of 1 + 2 | $901 | $843 | |
B. Interim Value Limit | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $901 | $843 |
Change in Index Value is -5% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $(11) | $(6) | |
A. Sum of 1 + 2 | $980 | $957 | |
B. Interim Value Limit | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $980 | $957 |
Change in Index Value is 60% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $541 | $558 | |
A. Sum of 1 + 2 | $1,532 | $1,521 | |
B. Interim Value Limit | $1,550 | $1,550 | |
Account Interim Value = Minimum of A and B | $1,532 | $1,521 |
Change in Index Value is 100% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $933 | $927 | |
A. Sum of 1 + 2 | $1,924 | $1,890 | |
B. Interim Value Limit | $1,950 | $1,950 | |
Account Interim Value = Minimum of A and B | $1,924 | $1,890 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000199854
Prospectus 2
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and registered representatives of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | If you make a withdrawal in excess of the free withdrawal amount before the 6th anniversary since your last Purchase Payment, you may be assessed a surrender charge of up to 7% of the amount withdrawn, declining to 0% over that time period. For example, if you make a withdrawal of $100,000 during the first year after your Purchase Payment, you could be assessed a charge of up to $7,000 on the Purchase Payment withdrawn. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Transaction Charges | None, other than surrender charges. | • Charges and Other Deductions | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Guarantee of Principal Death Benefit | 1.30%1 | 1.30%1 | ||
Fund Fees and Expenses | 0.48%1 | 1.52%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
1As a percentage of average Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract, which could add surrender charges that substantially increase costs. | ||||
Lowest Annual Cost: $2,095 | Highest Annual Cost: $3,522 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No surrender charges• No additional Purchase Payments, transfers, or withdrawals | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No surrender charges• No additional Purchase Payments, transfers, or withdrawals |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash.• Withdrawals may result in surrender charges. If you take a withdrawal, any surrender charge will reduce the value of your Contract or the amount of money that you actually receive. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract. | • Principal Risks• Investments of the Variable Annuity Account | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Investment Professional Compensation | • Your registered representative may receive compensation for selling this Contract to you, both in the form of commissions and because we may share the revenue it earns on this Contract with the professional’s firm. (Your investment professional may be your broker, investment adviser, insurance agent, or someone else).• This potential conflict of interest may influence your investment professional to recommend this Contract over another investment. | • Distribution of the Contracts• Principal Risks | ||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
Surrender charge (as a percentage of Purchase Payments surrendered/withdrawn):1 | 7.00% |
1 | The surrender charge percentage is reduced over a 6-year period at the following rates: 7%, 7%, 6%, 5%, 4%, 3%. We may reduce or waive this charge in certain situations. See Charges and Other Deductions – Surrender Charge. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1, 2 | ||
Guarantee of Principal Death Benefit | 1.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 1.10% after the Annuity Commencement Date. The Guarantee of Principal Death Benefit will automatically terminate at any time all Contractowners or Annuitants are changed. If this happens, the Account Value Death Benefit will be in effect, and the product charge of 1.10% for the Account Value Death Benefit will apply. |
2 | The base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from your variable and index linked Account Value on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.48% | 1.52% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.48% | 1.19% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$10,249 | $15,920 | $20,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$3,249 | $9,920 | $16,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$9,851 | $14,740 | $18,888 | $31,472 |
1 year | 3 years | 5 years | 10 years | |||
$2,851 | $8,740 | $14,888 | $31,472 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. If you take a withdrawal or surrender the Contract, any applicable surrender charges will reduce the value of your Contract or the amount of money that you ultimately receive. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | You may incur a surrender charge upon the surrender or withdrawal of Contract Value. See Charges and Other Deductions – Surrender Charge. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level you choose. The Protection Level exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Loss you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segment are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the Index, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable Index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
5. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
6. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
7. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
8. | The available Indexed Accounts with applicable Performance Caps, Performance Trigger Rates, and Protection Levels will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Performance Caps, and Performance Trigger Rates are available to you. There is no guarantee that an Indexed Account will be available in the future. You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. |
9. | The risks associated with the currently available Indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during period of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than |
investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. | |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
10. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, Index and Protection Level, if available. The Performance Cap or Performance Trigger Rate in effect at the time for new Indexed Segments will apply. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP PIMCO Low Duration Bond Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
11. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these Indices would have. |
12. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
13. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Cap |
• | Performance Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(This Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or Protection Level on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that more Contractowners than expected will qualify for waivers of the surrender charge; |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 1.30%* |
Number of contract anniversaries since Purchase Payment was invested | |||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | |||||||
Surrender charge as a percentage of the surrendered or withdrawn Purchase Payments | 7% | 7% | 6% | 5% | 4% | 3% | 0% |
• | A surrender or withdrawal of a Purchase Payment beyond the sixth anniversary since the Purchase Payment was invested; |
• | Withdrawals of Contract Value during a Contract Year to the extent that the total Contract Value withdrawn during the current Contract Year does not exceed the free amount. The free amount is equal to the greater of 10% of the current Contract Value or 10% of the total Purchase Payments (this does not apply upon surrender of the Contract); |
• | Purchase Payments used in the calculation of the initial benefit payment to be made under an Annuity Payout option (other than the i4LIFE® Indexed Advantage option); |
• | A surrender or withdrawal of any Purchase Payments, as a result of permanent and total disability of the Contractowner as defined in Section 22(e)(3) of the tax code, if the disability occurred after the effective date of the Contract and before the 65th birthday of the Contractowner. For contracts issued in the state of New Jersey, a different definition of permanent and total disability applies;; |
• | A surviving spouse, at the time he or she assumes ownership of the Contract as a result of the death of the original owner (however, the surrender charge schedule of the original Contract will continue to apply to the spouse's Contract); |
• | A surrender or withdrawal of any Purchase Payments, as a result of the admittance of the Contractowner to an accredited nursing home or equivalent health care facility, where the admittance into the facility occurs after the effective date of the Contract and the owner has been confined for at least 90 consecutive days; |
• | A surrender or withdrawal of any Purchase Payments as a result of the diagnosis of a terminal illness of the Contractowner. Diagnosis of a terminal illness must be after the effective date of the contract and results in a life expectancy of less than one year as determined by a qualified professional medical practitioner; |
• | A surrender of the Contract as a result of the death of the Contractowner or Annuitant; |
• | Purchase Payments when used in the calculation of the initial Account Value under i4LIFE® Indexed Advantage; |
• | Periodic Income Payments made under i4LIFE® Indexed Advantage or periodic payments made under any Annuity Payout option made available by us; or |
• | A surrender of the Contract or a withdrawal of Contract Value from contracts issued to Selling Group Individuals; |
1. | The free amount will be withdrawn from Purchase Payments on a first in-first out (“FIFO”) basis. |
2. | Prior to the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) until exhausted; then |
• | from earnings until exhausted. |
3. | On or after the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge no longer applies until exhausted; then |
• | from earnings until exhausted; then |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge still applies until exhausted. |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your broker-dealer and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 1.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether |
or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. | |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
High total return (including income and capital gains) consistent with preservation of capital over the long term. | American Funds Asset Allocation Fund - Class 4 | 0.80% | 14.84% | 11.43% | 11.13% |
Growth of capital. | American Funds Growth Fund - Class 4 | 0.85% | 21.68% | 25.12% | 19.44% |
High total investment return. | BlackRock Global Allocation V.I. Fund - Class III This fund will be substituted with the LVIP BlackRock Global Allocation Fund on or about June 3, 2022. Consult your registered representative. | 1.00%2 | 6.42% | 9.71% | 7.68% |
Long-term growth of capital. | Fidelity® VIP Mid Cap Portfolio - Service Class 2 | 0.86% | 25.31% | 13.32% | 13.00% |
To provide total return by allocating among dividend-paying stocks and investment grade bonds. | First Trust/Dow Jones Dividend & Income Allocation Portfolio - Class I6, | 1.19% | 12.25% | 9.54% | N/A |
Long-term capital appreciation; preservation of capital is also an important consideration. | Franklin Rising Dividends VIP Fund - Class 4 | 0.98% | 26.63% | 16.69% | 14.28% |
To seek to achieve a high level of total return on its assets through a combination of capital appreciation and current income. | Invesco V.I. Equally-Weighted S&P 500 Fund - Series II Shares5, This fund is not available in contracts issued on or after June 21, 2021. | 0.60% | 28.88% | 15.14% | 14.91% |
To maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. | JPMorgan Insurance Trust Core Bond Portfolio - Class 2 | 0.79%2 | -1.66% | 3.32% | 2.72% |
A balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital. A fund of funds. | LVIP American Growth Allocation Fund - Service Class | 0.94%2 | 10.50% | 11.28% | 9.57% |
High total investment return. | LVIP BlackRock Global Allocation Fund - Service Class This fund will be available on or about June 3, 2022. Consult your registered representative. | 0.98%2 | 7.31% | N/A | N/A |
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
Capital Appreciation. | LVIP MFS Value Fund - Service Class | 0.87%2 | 25.15% | 12.04% | 13.21% |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
To seek a high level of current income consistent with preservation of capital. | LVIP PIMCO Low Duration Bond Fund - Service Class | 0.75%2 | -0.89% | 1.66% | N/A |
To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. | LVIP SSGA International Index Fund - Service Class | 0.62%2 | 10.78% | 9.13% | 7.45% |
To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. | LVIP SSGA S&P 500 Index Fund - Service Class4 | 0.48% | 28.10% | 17.89% | 15.98% |
To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. | LVIP SSGA Small-Cap Index Fund - Service Class | 0.63%2 | 14.27% | 11.28% | 12.48% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or are discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap or Performance Trigger Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your registered representative. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | The pro rata portion of the Performance Cap or Performance Trigger equal to the days in the Indexed Term until the withdrawal is applied to the Indexed Crediting Base to place an upper limit on the performance credited during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000199855
Prospectus 3
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and financial professionals of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | There are no surrender charges associated with this Contract. | • N/A | ||
Transaction Charges | There are no sales charges associated with the Contract. | • N/A | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. These charges do not reflect any advisory fees paid to a financial intermediary from Contract Value or other assets of the Contractowner. If such charges were reflected, the ongoing fees and expenses would be higher. | • Fee Tables• Examples• Charges and Other Deductions | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Account Value Death Benefit | 0.10%1 | 0.10%1 | ||
Base Contract – Guarantee of Principal Death Benefit | 0.30%1 | 0.30%1 | ||
Fund Fees and Expenses | 0.48%1 | 1.52%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1 As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
2 As a percentage of Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract. | ||||
Lowest Annual Cost: $726 | Highest Annual Cost: $2,555 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the time of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract.• If you elect to pay third-party advisory fees out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. | • Principal Risks• Investments of the Variable Annuity Account• Federal Tax Matters – Payment of Investment Advisory Fees | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new Contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new Contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
• | Fees Associated with Fee-Based Financial Plans. You may provide authorization to have your advisory fees paid to your financial professional's investment firm from your Contract Value. Advisory Fee Withdrawals may not impact benefits and values under |
a Death Benefit or Living Benefit Rider or be treated as a distribution for federal tax purposes under certain conditions. Advisory Fee Withdrawals may not be available in all states, and certain firms may not allow withdrawals to pay advisory fees from your Contract Value. Please check with your financial professional. | |
If you elect to pay a third-party advisory fee out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Death Benefits and Advisory Fee Withdrawals and Federal Tax Matters – Payment of Investment Advisory Fees. |
There are no sales charges, deferred sales charges, or surrender charges associated with this contract. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1 | ||
Account Value Death Benefit | 0.10% | |
Guarantee of Principal Death Benefit2 | 0.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 0.10% after the Annuity Commencement Date. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
2 | The base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from your variable and indexed linked Account Value on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.48% | 1.52% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.48% | 1.19% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$2,251 | $6,942 | $11,897 | $25,542 |
1 year | 3 years | 5 years | 10 years | |||
$2,251 | $6,942 | $11,897 | $25,542 |
1 year | 3 years | 5 years | 10 years | |||
$1,849 | $5,725 | $9,851 | $21,371 |
1 year | 3 years | 5 years | 10 years | |||
$1,849 | $5,725 | $9,851 | $21,371 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | Nasdaq-100® Index |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
7. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
8. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
9. | Deduction of Advisory Fee Risk. This deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Advisory Fee Withdrawals. |
10. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. The Protection Level or Floor Protection exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Losses you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments may be limited by any applicable Participation Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. If the Participation Rate is less than 100%, the increase in your Segment Value will never reflect the entire corresponding performance in the applicable index over the Indexed Term. The Participation Rate exists for the full term of the Indexed Segment. The Participation Rate may be lower for contracts with the Guarantee of Principal Death Benefit. Participation Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the index, which means that your return may be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
5. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
6. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
7. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
8. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
9. | The available Indexed Accounts with applicable Crediting Methods, Protection Levels, and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, and Crediting Methods are available to you. There is no guarantee that an Indexed Account will be available in the future. You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. |
10. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. |
Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
11. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index, and Protection Level or Floor Protection, if available. The Crediting Method in effect at the time for new Indexed Segments will apply. The Crediting Method for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP PIMCO Low Duration Bond Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
12. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
13. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
14. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Rate |
• | Performance Cap |
• | Participation Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap without Annual Locks | You receive all positive index performance up to the Performance Cap at the end of the term. |
Participation Rate | You receive an amount equal to the Participation Rate times the positive index performance at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
Performance Cap with Annual Locks | An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date. You receive all positive index performance up to the Performance Cap each year of the Indexed Term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
These are the downside protection methods available when the index performance is negative: | |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 3-Year with a 115% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +20% | 115% | 20% x 115% = 23% | $100,000 | $123,000 |
Indexed Account = 3-Year with a 95% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +15% | +95% | 15% x 95% = 14.25% | $100,000 | $114,250 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Participation Rate, and there is positive performance, the Performance Rate that we apply on the Indexed Segment End Date may be less than, equal to, or greater than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with an Annual Lock, and there is positive performance, the Performance Rate on the Indexed Segment End Date could be less than the actual index performance. |
• | If you select an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you previously selected an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. The Floor Protection method is no longer available. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or protection method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 0.30%* |
Account Value Death Benefit | 0.10% |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your financial professional and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Account Value Death Benefit | Provides a Death Benefit equal to the Contract Value. | • 0.10% (as a percentage of Contract Value invested in the Subaccounts) | • Poor investment performance could significantly reduce the benefit.• Withdrawals could significantly reduce the benefit. |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 0.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Advisory Fee Withdrawals | Allows you to take withdrawals from your Contract to pay the advisory fees. | None | • May not be available in all states or through all broker-dealers.• The deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits (unless the requirements listed above are met), and may be subject to federal and state income taxes and a 10% federal penalty tax. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the Contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether |
or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. | |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
High total return (including income and capital gains) consistent with preservation of capital over the long term. | American Funds Asset Allocation Fund - Class 4 | 0.80% | 14.84% | 11.43% | 11.13% |
Growth of capital. | American Funds Growth Fund - Class 4 | 0.85% | 21.68% | 25.12% | 19.44% |
High total investment return. | BlackRock Global Allocation V.I. Fund - Class III This fund will be substituted with the LVIP BlackRock Global Allocation Fund on or about June 3, 2022. Consult your registered representative. | 1.00%2 | 6.42% | 9.71% | 7.68% |
Long-term growth of capital. | Fidelity® VIP Mid Cap Portfolio - Service Class 2 | 0.86% | 25.31% | 13.32% | 13.00% |
To provide capital appreciation. | First Trust Capital Strength Portfolio – Class I | 1.10%2 | 25.30% | N/A | N/A |
To provide total return by allocating among dividend-paying stocks and investment grade bonds. | First Trust/Dow Jones Dividend & Income Allocation Portfolio - Class I6, | 1.19% | 12.25% | 9.54% | N/A |
Long-term capital appreciation; preservation of capital is also an important consideration. | Franklin Rising Dividends VIP Fund - Class 4 | 0.98% | 26.63% | 16.69% | 14.28% |
To seek to achieve a high level of total return on its assets through a combination of capital appreciation and current income. | Invesco V.I. Equally-Weighted S&P 500 Fund - Series II Shares5, This fund is not available in contracts issued on or after June 21, 2021. | 0.60% | 28.88% | 15.14% | 14.91% |
To maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. | JPMorgan Insurance Trust Core Bond Portfolio - Class 2 | 0.79%2 | -1.66% | 3.32% | 2.72% |
High total investment return. | LVIP BlackRock Global Allocation Fund - Service Class This fund will be available on or about June 3, 2022. Consult your financial professional. | 0.98%2 | 7.31% | N/A | N/A |
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
Capital Appreciation. | LVIP MFS Value Fund - Service Class | 0.87%2 | 25.15% | 12.04% | 13.21% |
To seek a high level of current income consistent with preservation of capital. | LVIP PIMCO Low Duration Bond Fund - Service Class | 0.75%2 | -0.89% | 1.66% | N/A |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. | LVIP SSGA International Index Fund - Service Class | 0.62%2 | 10.78% | 9.13% | 7.45% |
To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. | LVIP SSGA S&P 500 Index Fund - Service Class4 | 0.48% | 28.10% | 17.89% | 15.98% |
To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. | LVIP SSGA Small-Cap Index Fund - Service Class | 0.63%2 | 14.27% | 11.28% | 12.48% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the greater of 0 and the Index performance for the Indexed Segment as determined on the Valuation Date the Interim Value is calculated;
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or is discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap, Participation Rate, or Performance Trigger Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your financial professional. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
3 Year | 3 Year | ||
Indexed Term length | 36 months | 36 months | |
Months since Indexed Term Start Date | 33 | 15 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Participation Rate | 70% | 70% | |
Months to End Date | 3 | 21 |
Change in Index Value is -30% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(214) | |
A. Sum of 1 + 2 | $797 | $783 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $797 | $783 |
Change in Index Value is -10% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(73) | |
A. Sum of 1 + 2 | $970 | $924 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $970 | $924 |
Change in Index Value is 20% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $139 | $131 | |
A. Sum of 1 + 2 | $1,138 | $1,128 | |
B. Application of pro-rated Participation Rate | $1,140 | $1,140 | |
Account Interim Value = Minimum of A and B | $1,138 | $1,128 |
Change in Index Value is 40% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $278 | $264 | |
A. Sum of 1 + 2 | $1,277 | $1,261 | |
B. Application of pro-rated Participation Rate | $1,280 | $1,280 | |
Account Interim Value = Minimum of A and B | $1,277 | $1,261 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection Level | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000199853
Prospectus 4
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and financial professionals of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | There are no surrender charges associated with this Contract. | • N/A | ||
Transaction Charges | There are no sales charges associated with the Contract. | • N/A | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. These charges do not reflect any advisory fees paid to a financial intermediary from Contract Value or other assets of the Contractowner. If such charges were reflected, the ongoing fees and expenses would be higher. | • Fee Tables• Examples• Charges and Other Deductions | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Guarantee of Principal Death Benefit | 0.30%1 | 0.30%1 | ||
Fund Fees and Expenses | 0.48%1 | 1.52%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1 As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
2 As a percentage of Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract. | ||||
Lowest Annual Cost: $966 | Highest Annual Cost: $2,555 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees | |||
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the time of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account |
RISKS | Location in Prospectus | |||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract.• If you elect to pay third-party advisory fees out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. | • Principal Risks• Investments of the Variable Annuity Account• Federal Tax Matters – Payment of Investment Advisory Fees | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters | ||
CONFLICTS OF INTEREST | Location in Prospectus | |||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new Contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new Contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
• | Fees Associated with Fee-Based Financial Plans. You may provide authorization to have your advisory fees paid to your financial professional's investment firm from your Contract Value. Advisory Fee Withdrawals may not impact benefits and values under a Death Benefit or Living Benefit Rider or be treated as a distribution for federal tax purposes under certain conditions. Advisory Fee Withdrawals may not be available in all states, and certain firms may not allow withdrawals to pay advisory fees from your Contract Value. Please check with your financial professional. |
If you elect to pay a third-party advisory fee out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Death Benefits and Advisory Fee Withdrawals and Federal Tax Matters – Payment of Investment Advisory Fees. |
There are no sales charges, deferred sales charges, or surrender charges associated with this contract. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1, 2 | ||
Guarantee of Principal Death Benefit | 0.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charges | 0.40% |
1 | The base contract expense is 0.10% after the Annuity Commencement Date. The Guarantee of Principal Death Benefit will automatically terminate at any time all Contractowners or Annuitants are changed. If this happens, the Account Value Death Benefit will be in effect, and the product charge of 0.10% for the Account Value Death Benefit will apply. |
2 | Each base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from your variable and index-linked Account Value on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.48% | 1.52% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.48% | 1.19% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$2,251 | $6,942 | $11,897 | $25,542 |
1 year | 3 years | 5 years | 10 years | |||
$2,251 | $6,942 | $11,897 | $25,542 |
1 year | 3 years | 5 years | 10 years | |||
$1,849 | $5,725 | $9,851 | $21,371 |
1 year | 3 years | 5 years | 10 years | |||
$1,849 | $5,725 | $9,851 | $21,371 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. If you take a withdrawal or surrender the Contract, any applicable surrender charges will reduce the value of your Contract or the amount of money that you ultimately receive. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | Deduction of Advisory Fee Risk. This deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Advisory Fee Withdrawals. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level you choose. The Protection Level exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Loss you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segment are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the Index, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable Index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
5. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
6. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
7. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
8. | The available Indexed Accounts with applicable Performance Caps, Performance Trigger Rates, and Protection Levels will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Performance Caps, and Performance Trigger Rates are available to you. There is no guarantee that an Indexed Account will be available in the future. You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. |
9. | The risks associated with the currently available Indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during period of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than |
investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. | |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
10. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, Index and Protection Level, if available. The Performance Cap or Performance Trigger Rate in effect at the time for new Indexed Segments will apply. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP PIMCO Low Duration Bond Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
11. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these Indices would have. |
12. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
13. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Cap |
• | Performance Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(This Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or Protection Level on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 0.30%* |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your financial professional and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 0.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Advisory Fee Withdrawals | Allows you to take withdrawals from your Contract to pay the advisory fees. | None | • May not be available in all states or through all broker-dealers.• The deduction of advisory fees from Contract Value may reduce , and may be subject to federal and state income taxes and a 10% federal penalty tax. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
High total return (including income and capital gains) consistent with preservation of capital over the long term. | American Funds Asset Allocation Fund - Class 4 | 0.80% | 14.84% | 11.43% | 11.13% |
Growth of capital. | American Funds Growth Fund - Class 4 | 0.85% | 21.68% | 25.12% | 19.44% |
High total investment return. | BlackRock Global Allocation V.I. Fund - Class III This fund will be substituted with the LVIP BlackRock Global Allocation Fund on or about June 3, 2022. Consult your registered representative. | 1.00%2 | 6.42% | 9.71% | 7.68% |
Long-term growth of capital. | Fidelity® VIP Mid Cap Portfolio - Service Class 2 | 0.86% | 25.31% | 13.32% | 13.00% |
To provide total return by allocating among dividend-paying stocks and investment grade bonds. | First Trust/Dow Jones Dividend & Income Allocation Portfolio - Class I6, | 1.19% | 12.25% | 9.54% | N/A |
Long-term capital appreciation; preservation of capital is also an important consideration. | Franklin Rising Dividends VIP Fund - Class 4 | 0.98% | 26.63% | 16.69% | 14.28% |
To seek to achieve a high level of total return on its assets through a combination of capital appreciation and current income. | Invesco V.I. Equally-Weighted S&P 500 Fund - Series II Shares5, This fund is not available in contracts issued on or after June 21, 2021. | 0.60% | 28.88% | 15.14% | 14.91% |
To maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. | JPMorgan Insurance Trust Core Bond Portfolio - Class 2 | 0.79%2 | -1.66% | 3.32% | 2.72% |
High total investment return. | LVIP BlackRock Global Allocation Fund - Service Class This fund will be available on or about June 3, 2022. Consult your financial professional. | 0.98%2 | 7.31% | N/A | N/A |
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
Capital Appreciation. | LVIP MFS Value Fund - Service Class | 0.87%2 | 25.15% | 12.04% | 13.21% |
To seek a high level of current income consistent with preservation of capital. | LVIP PIMCO Low Duration Bond Fund - Service Class | 0.75%2 | -0.89% | 1.66% | N/A |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. | LVIP SSGA International Index Fund - Service Class | 0.62%2 | 10.78% | 9.13% | 7.45% |
To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. | LVIP SSGA S&P 500 Index Fund - Service Class4 | 0.48% | 28.10% | 17.89% | 15.98% |
To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. | LVIP SSGA Small-Cap Index Fund - Service Class | 0.63%2 | 14.27% | 11.28% | 12.48% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or are discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap or Performance Trigger Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your financial professional. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | The pro rata portion of the Performance Cap or Performance Trigger equal to the days in the Indexed Term until the withdrawal is applied to the Indexed Crediting Base to place an upper limit on the performance credited during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000199856
Prospectus 5
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and financial professionals of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | There are no surrender charges associated with this Contract. | • N/A | ||
Transaction Charges | There are no sales charges associated with the Contract. | • N/A | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. These charges do not reflect any advisory fees paid to a financial intermediary from Contract Value or other assets of the Contractowner. If such charges were reflected, the ongoing fees and expenses would be higher. | • Fee Tables• Examples• Charges and Other Deductions | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Guarantee of Principal Death Benefit | 0.30%1 | 0.30%1 | ||
Fund Fees and Expenses | 0.67%1 | 0.67%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1 As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
2 As a percentage of Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract. | ||||
Lowest Annual Cost: $1,190 | Highest Annual Cost: $1,647 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees | |||
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the time of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account |
RISKS | Location in Prospectus | |||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract.• If you elect to pay third-party advisory fees out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. | • Principal Risks• Investments of the Variable Annuity Account• Federal Tax Matters – Payment of Investment Advisory Fees | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters | ||
CONFLICTS OF INTEREST | Location in Prospectus | |||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new Contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new Contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
• | Fees Associated with Fee-Based Financial Plans. You may provide authorization to have your advisory fees paid to your financial professional's investment firm from your Contract Value. Advisory Fee Withdrawals may not impact benefits and values under a Death Benefit or Living Benefit Rider or be treated as a distribution for federal tax purposes under certain conditions. Advisory Fee Withdrawals may not be available in all states, and certain firms may not allow withdrawals to pay advisory fees from your Contract Value. Please check with your financial professional. |
If you elect to pay a third-party advisory fee out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Death Benefits and Advisory Fee Withdrawals and Federal Tax Matters – Payment of Investment Advisory Fees. |
There are no sales charges, deferred sales charges, or surrender charges associated with this contract. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1, 2 | ||
Guarantee of Principal Death Benefit | 0.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 0.10% after the Annuity Commencement Date. The Guarantee of Principal Death Benefit will automatically terminate at any time all Contractowners or Annuitants are changed. If this happens, the Account Value Death Benefit will be in effect, and the product charge of 0.10% for the Account Value Death Benefit will apply. |
2 | The base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from your variable and index-linked Account Value on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.67% | 0.67% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.67% | 0.67% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$1,395 | $4,338 | $7,499 | $16,461 |
1 year | 3 years | 5 years | 10 years | |||
$1,395 | $4,338 | $7,499 | $16,461 |
1 year | 3 years | 5 years | 10 years | |||
$989 | $3,090 | $5,362 | $11,896 |
1 year | 3 years | 5 years | 10 years | |||
$989 | $3,090 | $5,362 | $11,896 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Nasdaq-100® Index |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | Deduction of Advisory Fee Risk. This deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Advisory Fee Withdrawals. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk as described below. There is also a risk of loss upon an early withdrawal. Loss you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the Index, which means that your return may be lower than if you had invested directly in a fund based on the applicable Index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for Contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable Index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
5. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
6. | The indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. |
7. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in this prospectus for more information. |
8. | The available Indexed Accounts with applicable Performance Caps, Performance Trigger Rates and Protection Levels and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, Performance Trigger Rates and Performance Caps are available to you. There is no guarantee that an Indexed Account will be available in the future. You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. |
9. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
10. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index and Protection Level or Floor Protection, if available. The Performance Cap or Performance Trigger Rate in effect at the time for new Indexed Segments will apply. The Performance Cap or Performance Trigger Rate for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP Government Money Market Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
11. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
12. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
13. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Cap |
• | Performance Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for Performance Trigger Rate): | |
Performance Cap | You receive all positive index performance up to the Performance Cap rate at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
These are the downside protection methods available when the index performance is negative: | |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | ||||
1/8/2023 | 1,679 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | 1,880 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 1-Year with a 3% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3%
Indexed Segment Maturity Value = $95,000
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you choose an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or Protection Method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 0.30%* |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your financial professional and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 0.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Advisory Fee Withdrawals | Allows you to take withdrawals from your Contract to pay the advisory fees. | None | • May not be available in all states or through all broker-dealers.• The deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits (unless the requirements listed above are met), and may be subject to federal and state income taxes and a 10% federal penalty tax. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. |
If the market observable spread of investment grade U.S. Corporate Bonds are no longer available, or are discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap or Performance Trigger Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your financial professional. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | |
Indexed Term length | 12 months |
Months since Indexed Term Start Date | 9 |
Indexed Crediting Base | $1,000 |
Protection Level | 10% |
Performance Cap | 11.25% |
Months to End Date | 3 |
Change in Index Value is -30% | 1 Year |
1. Fair Value of Indexed Crediting Base | $998 |
2. Fair Value of Replicating Portfolio of Options | $(202) |
A. Sum of 1 + 2 | $796 |
B. Application of pro-rated Performance Cap | $1,084 |
Account Interim Value = Minimum of A and B | $796 |
Change in Index Value is -10% | 1 Year |
1. Fair Value of Indexed Crediting Base | $998 |
2. Fair Value of Replicating Portfolio of Options | $(29) |
A. Sum of 1 + 2 | $969 |
B. Application of pro-rated Performance Cap | $1,084 |
Account Interim Value = Minimum of A and B | $969 |
Change in Index Value is 20% | 1 Year |
1. Fair Value of Indexed Crediting Base | $998 |
2. Fair Value of Replicating Portfolio of Options | $99 |
A. Sum of 1 + 2 | $1,097 |
B. Application of pro-rated Performance Cap | $1,084 |
Account Interim Value = Minimum of A and B | $1,084 |
Change in Index Value is 40% | 1 Year |
1. Fair Value of Indexed Crediting Base | $998 |
2. Fair Value of Replicating Portfolio of Options | $108 |
A. Sum of 1 + 2 | $1,106 |
B. Application of pro-rated Performance Cap | $1,084 |
Account Interim Value = Minimum of A and B | $1,084 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection Level | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 9.50% | 9.50% | |
Performance Trigger Rate | 9% | 9% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000214489
Prospectus 6
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and registered representatives of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | If you make a withdrawal in excess of the free withdrawal amount before the 6th anniversary since your last Purchase Payment, you may be assessed a surrender charge of up to 7% of the amount withdrawn, declining to 0% over that time period. For example, if you make a withdrawal of $100,000 during the first year after your Purchase Payment, you could be assessed a charge of up to $7,000 on the Purchase Payment withdrawn. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Transaction Charges | None, other than surrender charges. | • Charges and Other Deductions | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Account Value Death Benefit | 1.11%1 | 1.11%1 | ||
Base Contract – Guarantee of Principal Death Benefit | 1.31%1 | 1.31%1 | ||
Fund Fees and Expenses | 0.67%1 | 0.67%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
1As a percentage of average Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract, which could add surrender charges that substantially increase costs. | ||||
Lowest Annual Cost: $2,084 | Highest Annual Cost: $2,707 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccount only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No surrender charges• No additional Purchase Payments, transfers, or withdrawals | • Investment of $100,000 (to the Subaccount only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No surrender charges• No additional Purchase Payments, transfers, or withdrawals |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash.• Withdrawals may result in surrender charges. If you take a withdrawal, any surrender charge will reduce the value of your Contract or the amount of money that you actually receive. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract. | • Principal Risks• Investments of the Variable Annuity Account | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Investment Professional Compensation | • Your registered representative may receive compensation for selling this Contract to you, both in the form of commissions and because we may share the revenue it earns on this Contract with the professional’s firm. (Your investment professional may be your broker, investment adviser, insurance agent, or someone else).• This potential conflict of interest may influence your investment professional to recommend this Contract over another investment. | • Distribution of the Contracts• Principal Risks | ||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
Surrender charge (as a percentage of Purchase Payments surrendered/withdrawn):1 | 7.00% |
1 | The surrender charge percentage is reduced over a 6-year period at the following rates: 7%, 7%, 6%, 5%, 4%, 3%. We may reduce or waive this charge in certain situations. See Charges and Other Deductions – Surrender Charge. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccount)1, 2 | ||
Account Value Death Benefit | 1.10% | |
Guarantee of Principal Death Benefit | 1.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 1.10% after the Annuity Commencement Date. These expenses do apply to Contract Value in the Indexed Accounts. |
2 | Each base contract expense includes an administrative charge of 0.10% |
3 | The i4LIFE® Indexed Advantage charge will be deducted from your Account Value on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.67% | 0.67% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.67% | 0.67% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$9,401 | $13,394 | $16,653 | $27,061 |
1 year | 3 years | 5 years | 10 years | |||
$2,401 | $7,394 | $12,653 | $27,061 |
1 year | 3 years | 5 years | 10 years | |||
$9,000 | $12,183 | $14,623 | $22,956 |
1 year | 3 years | 5 years | 10 years | |||
$2,000 | $6,183 | $10,623 | $22,956 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | Nasdaq-100® Index |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. If you take a withdrawal or surrender the Contract, any applicable surrender charges will reduce the value of your Contract or the amount of money that you ultimately receive. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | You may incur a surrender charge upon the surrender or withdrawal of Contract Value. See Charges and Other Deductions – Surrender Charge. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. The Protection Level or Floor Protection exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Losses you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments may be limited by any applicable Participation Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. If the Participation Rate is less than 100%, the increase in your Segment Value will never reflect the entire corresponding performance in the applicable index over the Indexed Term. The Participation Rate exists for the full term of the Indexed Segment. The Participation Rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Participation Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the index, which means that your return may be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for Contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
5. | Gains in your Indexed Segments are limited by any applicable Spread Rate. If the performance of the index is positive, the performance of the Indexed Account will be reduced by the Spread Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Spread Rate applies for the full term on the Indexed Segment. The Spread Rate may be higher for Contracts with the Guarantee of Principal Death Benefit. Spread Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
6. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
7. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
8. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
9. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
10. | The available Indexed Accounts with applicable Crediting Methods, Protection Levels, and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, and Crediting Methods are available to you. There is no guarantee that an Indexed Account will be available in the future. |
You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. | |
11. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
12. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index, and Protection Level or Floor Protection, if available. The Crediting Method in effect at the time for new Indexed Segments will apply. The Crediting Method for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP Government Money Market Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
13. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
14. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
15. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into the Subaccount, which invests in a corresponding underlying fund. If the Subaccount makes money, your Contract Value goes up; if it loses money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccount. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
4. | The fund has reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
5. | Annuity Payouts will fluctuate with the performance of the Subaccount. |
• | Start Date |
• | Crediting Base |
• | Performance Rate |
• | Performance Cap |
• | Participation Rate |
• | Spread Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap without Annual Locks | You receive all positive index performance up to the Performance Cap at the end of the term. |
Participation Rate | You receive an amount equal to the Participation Rate times the positive index performance at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
Spread Rate | You receive all positive index performance above the Spread Rate at the end of the term. |
Performance Cap with Annual Locks | An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date. You receive all positive index performance up to the Performance Cap each year of the Indexed Term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 3-Year with a 115% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +20% | 115% | 20% x 115% = 23% | $100,000 | $123,000 |
Indexed Account = 3-Year with a 95% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +15% | +95% | 15% x 95% = 14.25% | $100,000 | $114,250 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 6-Year with a 5% Spread Rate and 15% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Spread Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2029 | +100% | +5% | +95% | $100,000 | $195,000 |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Participation Rate, and there is positive performance, the Performance Rate that we apply on the Indexed Segment End Date may be less than, equal to, or greater than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with a Spread Rate, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date will be less than the actual index performance. If the positive index performance is less than the Spread Rate, your return will be zero. |
• | If you choose an Indexed Segment with an Annual Lock, and there is positive performance, the Performance Rate on the Indexed Segment End Date could be less than the actual index performance. |
• | If you select an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you previously selected an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. The Floor Protection method is no longer available. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or protection method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that more Contractowners than expected will qualify for waivers of the surrender charge; |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 1.30%* |
Account Value Death Benefit | 1.10%* |
Number of contract anniversaries since Purchase Payment was invested | |||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | |||||||
Surrender charge as a percentage of the surrendered or withdrawn Purchase Payments | 7% | 7% | 6% | 5% | 4% | 3% | 0% |
• | A surrender or withdrawal of a Purchase Payment beyond the sixth anniversary since the Purchase Payment was invested; |
• | Withdrawals of Contract Value during a Contract Year to the extent that the total Contract Value withdrawn during the current Contract Year does not exceed the free amount. The free amount is equal to the greater of 10% of the current Contract Value or 10% of the total Purchase Payments (this does not apply upon surrender of the Contract); |
• | Purchase Payments used in the calculation of the initial benefit payment to be made under an Annuity Payout option (other than the i4LIFE® Indexed Advantage option); |
• | A surrender or withdrawal of any Purchase Payments, as a result of permanent and total disability of the Contractowner as |
defined in Section 22(e)(3) of the tax code, if the disability occurred after the effective date of the Contract and before the 65th birthday of the Contractowner. For contracts issued in the state of New Jersey, a different definition of permanent and total disability applies;; | |
• | A surviving spouse, at the time he or she assumes ownership of the Contract as a result of the death of the original owner (however, the surrender charge schedule of the original Contract will continue to apply to the spouse's Contract); |
• | A surrender or withdrawal of any Purchase Payments, as a result of the admittance of the Contractowner to an accredited nursing home or equivalent health care facility, where the admittance into the facility occurs after the effective date of the Contract and the owner has been confined for at least 90 consecutive days; |
• | A surrender or withdrawal of any Purchase Payments as a result of the diagnosis of a terminal illness of the Contractowner. Diagnosis of a terminal illness must be after the effective date of the contract and results in a life expectancy of less than one year as determined by a qualified professional medical practitioner; |
• | A surrender of the Contract as a result of the death of the Contractowner or Annuitant; |
• | Purchase Payments when used in the calculation of the initial Account Value under i4LIFE® Indexed Advantage; |
• | Periodic Income Payments made under i4LIFE® Indexed Advantage or periodic payments made under any Annuity Payout option made available by us; or |
• | A surrender of the Contract or a withdrawal of Contract Value from contracts issued to Selling Group Individuals; |
1. | The free amount will be withdrawn from Purchase Payments on a first in-first out (“FIFO”) basis. |
2. | Prior to the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) until exhausted; then |
• | from earnings until exhausted. |
3. | On or after the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge no longer applies until exhausted; then |
• | from earnings until exhausted; then |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge still applies until exhausted. |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your broker-dealer and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Account Value Death Benefit | Provides a Death Benefit equal to the Contract Value. | • 1.10% (as a percentage of Contract Value invested in the Subaccounts) | • Poor investment performance could significantly reduce the benefit.• Withdrawals could significantly reduce the benefit. |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 1.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the Contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the greater of 0 and the Index performance for the Indexed Segment as determined on the Valuation Date the Interim Value is calculated;
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = 999% minus the Spread Rate;
H = the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term;
I = the greater of zero, or the percentage change of the Index Value between the Start Date and Valuation Date of the calculation minus the Spread Rate.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is |
set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or is discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap, Participation Rate, Performance Trigger Rate, or Spread Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your registered representative. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
3 Year | 3 Year | ||
Indexed Term length | 36 months | 36 months | |
Months since Indexed Term Start Date | 33 | 15 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Participation Rate | 70% | 70% | |
Months to End Date | 3 | 21 |
Change in Index Value is -30% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(214) | |
A. Sum of 1 + 2 | $797 | $783 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $797 | $783 |
Change in Index Value is -10% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(73) | |
A. Sum of 1 + 2 | $970 | $924 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $970 | $924 |
Change in Index Value is 20% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $139 | $131 | |
A. Sum of 1 + 2 | $1,138 | $1,128 | |
B. Application of pro-rated Participation Rate | $1,140 | $1,140 | |
Account Interim Value = Minimum of A and B | $1,138 | $1,128 |
Change in Index Value is 40% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $278 | $264 | |
A. Sum of 1 + 2 | $1,277 | $1,261 | |
B. Application of pro-rated Participation Rate | $1,280 | $1,280 | |
Account Interim Value = Minimum of A and B | $1,277 | $1,261 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection Level | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
6 Year | 6 Year | ||
Indexed Term length | 72 Months | 72 Months | |
Months since Indexed Term Start Date | 60 | 12 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 15% | 15% | |
Spread Rate | 5% | 5% | |
Months to End Date | 12 | 60 |
Change in Index Value is -20% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $(90) | $(120) | |
A. Sum of 1 + 2 | $901 | $843 | |
B. Interim Value Limit | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $901 | $843 |
Change in Index Value is -5% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $(11) | $(6) | |
A. Sum of 1 + 2 | $980 | $957 | |
B. Interim Value Limit | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $980 | $957 |
Change in Index Value is 60% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $541 | $558 | |
A. Sum of 1 + 2 | $1,532 | $1,521 | |
B. Interim Value Limit | $1,550 | $1,550 | |
Account Interim Value = Minimum of A and B | $1,532 | $1,521 |
Change in Index Value is 100% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $933 | $927 | |
A. Sum of 1 + 2 | $1,924 | $1,890 | |
B. Interim Value Limit | $1,950 | $1,950 | |
Account Interim Value = Minimum of A and B | $1,924 | $1,890 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000217751
Prospectus 7
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and financial professionals of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | There are no surrender charges associated with this Contract. | • N/A | ||
Transaction Charges | There are no sales charges associated with the Contract. | • N/A | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. These charges do not reflect any advisory fees paid to a financial intermediary from Contract Value or other assets of the Contractowner. If such charges were reflected, the ongoing fees and expenses would be higher. | • Fee Tables• Examples• Charges and Other Deductions | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Account Value Death Benefit | 0.10%1 | 0.10%1 | ||
Base Contract – Guarantee of Principal Death Benefit | 0.30%1 | 0.30%1 | ||
Fund Fees and Expenses | 0.67%1 | 0.67%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1 As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
2 As a percentage of Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract. | ||||
Lowest Annual Cost: $954 | Highest Annual Cost: $1,647 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccount only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees | • Investment of $100,000 (to the Subaccount only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No additional Purchase Payments, transfers, or withdrawals• No sales charges or advisory fees |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the time of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract.• If you elect to pay third-party advisory fees out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. | • Principal Risks• Investments of the Variable Annuity Account• Federal Tax Matters – Payment of Investment Advisory Fees | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new Contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new Contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
• | Fees Associated with Fee-Based Financial Plans. You may provide authorization to have your advisory fees paid to your financial professional's investment firm from your Contract Value. Advisory Fee Withdrawals may not impact benefits and values under |
a Death Benefit or Living Benefit Rider or be treated as a distribution for federal tax purposes under certain conditions. Advisory Fee Withdrawals may not be available in all states, and certain firms may not allow withdrawals to pay advisory fees from your Contract Value. Please check with your financial professional. | |
If you elect to pay a third-party advisory fee out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Death Benefits and Advisory Fee Withdrawals and Federal Tax Matters – Payment of Investment Advisory Fees. |
There are no sales charges, deferred sales charges, or surrender charges associated with this contract. |
Contract, not including fund fees and expenses. If you choose to purchase an optional benefit, you will pay additional charges, as shown below.
Base Contract Expenses (as a percentage of average Contract Value in the Subaccount)1, 2 | ||
Account Value Death Benefit | 0.10% | |
Guarantee of Principal Death Benefit2 | 0.30% | |
Optional Benefit Expense | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 0.10% after the Annuity Commencement Date. |
2 | The base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from your variable and index-linked Account Value on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.67% | 0.67% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.67% | 0.67% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$1,395 | $4,338 | $7,499 | $16,461 |
1 year | 3 years | 5 years | 10 years | |||
$1,395 | $4,338 | $7,499 | $16,461 |
1 year | 3 years | 5 years | 10 years | |||
$989 | $3,090 | $5,362 | $11,896 |
1 year | 3 years | 5 years | 10 years | |||
$989 | $3,090 | $5,362 | $11,896 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | Nasdaq-100® Index |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
7. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
8. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
9. | Deduction of Advisory Fee Risk. This deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. See The Contracts – Advisory Fee Withdrawals. |
10. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. The Protection Level or Floor Protection exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Losses you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments may be limited by any applicable Participation Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. If the Participation Rate is less than 100%, the increase in your Segment Value will never reflect the entire corresponding performance in the applicable index over the Indexed Term. The Participation Rate exists for the full term of the Indexed Segment. The Participation Rate may be lower for contracts with the Guarantee of Principal Death Benefit. Participation Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the index, which means that your return may be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
5. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
6. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
7. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
8. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
9. | The available Indexed Accounts with applicable Crediting Methods, Protection Levels, and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, and Crediting Methods are available to you. There is no guarantee that an Indexed Account will be available in the future. You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. |
10. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. |
Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
11. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index, and Protection Level or Floor Protection, if available. The Crediting Method in effect at the time for new Indexed Segments will apply. The Crediting Method for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP Government Money Market Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
12. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
13. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
14. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into the Subaccount, which invests in a corresponding underlying fund. If the Subaccount makes money, your Contract Value goes up; if it loses money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccount. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
4. | The fund has reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
5. | Annuity Payouts will fluctuate with the performance of the Subaccount. |
• | Start Date |
• | Crediting Base |
• | Performance Rate |
• | Performance Cap |
• | Participation Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap without Annual Locks | You receive all positive index performance up to the Performance Cap at the end of the term. |
Participation Rate | You receive an amount equal to the Participation Rate times the positive index performance at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
Performance Cap with Annual Locks | An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date. You receive all positive index performance up to the Performance Cap each year of the Indexed Term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 3-Year with a 115% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +20% | 115% | 20% x 115% = 23% | $100,000 | $123,000 |
Indexed Account = 3-Year with a 95% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +15% | +95% | 15% x 95% = 14.25% | $100,000 | $114,250 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Participation Rate, and there is positive performance, the Performance Rate that we apply on the Indexed Segment End Date may be less than, equal to, or greater than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with an Annual Lock, and there is positive performance, the Performance Rate on the Indexed Segment End Date could be less than the actual index performance. |
• | If you select an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you previously selected an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. The Floor Protection method is no longer available. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or protection method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 0.30%* |
Account Value Death Benefit | 0.10%* |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your financial professional and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Account Value Death Benefit | Provides a Death Benefit equal to the Contract Value. | • 0.10% (as a percentage of Contract Value invested in the Subaccounts) | • Poor investment performance could significantly reduce the benefit.• Withdrawals could significantly reduce the benefit. |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 0.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Advisory Fee Withdrawals | Allows you to take withdrawals from your Contract to pay the advisory fees. | None | • May not be available in all states or through all broker-dealers.• The deduction of advisory fees from Contract Value may reduce the Death Benefit and other guaranteed benefits (unless the requirements listed above are met), and may be subject to federal and state income taxes and a 10% federal penalty tax. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the Contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the greater of 0 and the Index performance for the Indexed Segment as determined on the Valuation Date the Interim Value is calculated;
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or is discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap, Participation Rate, or Performance Trigger Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your financial professional. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
3 Year | 3 Year | ||
Indexed Term length | 36 months | 36 months | |
Months since Indexed Term Start Date | 33 | 15 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Participation Rate | 70% | 70% | |
Months to End Date | 3 | 21 |
Change in Index Value is -30% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(214) | |
A. Sum of 1 + 2 | $797 | $783 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $797 | $783 |
Change in Index Value is -10% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(73) | |
A. Sum of 1 + 2 | $970 | $924 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $970 | $924 |
Change in Index Value is 20% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $139 | $131 | |
A. Sum of 1 + 2 | $1,138 | $1,128 | |
B. Application of pro-rated Participation Rate | $1,140 | $1,140 | |
Account Interim Value = Minimum of A and B | $1,138 | $1,128 |
Change in Index Value is 40% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $278 | $264 | |
A. Sum of 1 + 2 | $1,277 | $1,261 | |
B. Application of pro-rated Participation Rate | $1,280 | $1,280 | |
Account Interim Value = Minimum of A and B | $1,277 | $1,261 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection Level | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000217752
Prospectus 8
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and financial professionals of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | If you make a withdrawal in excess of the free withdrawal amount before the 6th anniversary since your last Purchase Payment, you may be assessed a surrender charge of up to 7% of the amount withdrawn, declining to 0% over that time period. For example, if you make a withdrawal of $100,000 during the first year after your Purchase Payment, you could be assessed a charge of up to $7,000 on the Purchase Payment withdrawn. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Transaction Charges | None, other than surrender charges. | • Charges and Other Deductions | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Account Value Death Benefit | 1.11%1 | 1.11%1 | ||
Base Contract – Guarantee of Principal Death Benefit | 1.31%1 | 1.31%1 | ||
Fund Fees and Expenses | 0.48%1 | 1.52%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
1As a percentage of average Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract, which could add surrender charges that substantially increase costs. | ||||
Lowest Annual Cost: $1,879 | Highest Annual Cost: $3,522 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No surrender charges• No additional Purchase Payments, transfers, or withdrawals | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No surrender charges• No additional Purchase Payments, transfers, or withdrawals |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash.• Withdrawals may result in surrender charges. If you take a withdrawal, any surrender charge will reduce the value of your Contract or the amount of money that you actually receive. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract. | • Principal Risks• Investments of the Variable Annuity Account | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Investment Professional Compensation | • Your financial professional may receive compensation for selling this Contract to you, both in the form of commissions and because we may share the revenue it earns on this Contract with the professional’s firm. (Your investment professional may be your broker, investment adviser, insurance agent, or someone else).• This potential conflict of interest may influence your investment professional to recommend this Contract over another investment. | • Distribution of the Contracts• Principal Risks | ||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
Surrender charge (as a percentage of Purchase Payments surrendered/withdrawn):1 | 7.00% |
1 | The surrender charge percentage is reduced over a 6-year period at the following rates: 7%, 7%, 6%, 5%, 4%, 3%. We may reduce or waive this charge in certain situations. See Charges and Other Deductions – Surrender Charge. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1, 2 | ||
Account Value Death Benefit | 1.10% | |
Guarantee of Principal Death Benefit | 1.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 1.10% after the Annuity Commencement Date. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
2 | Each base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from Contract Value to the Subaccounts and the Indexed Accounts on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.48% | 1.52% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.48% | 1.19% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$10,249 | $15,920 | $20,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$3,249 | $9,920 | $16,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$9,851 | $14,740 | $18,888 | $31,472 |
1 year | 3 years | 5 years | 10 years | |||
$2,851 | $8,740 | $14,888 | $31,472 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | Nasdaq-100® Index |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. If you take a withdrawal or surrender the Contract, any applicable surrender charges will reduce the value of your Contract or the amount of money that you ultimately receive. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | You may incur a surrender charge upon the surrender or withdrawal of Contract Value. See Charges and Other Deductions – Surrender Charge. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. The Protection Level or Floor Protection exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Losses you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable Index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the Index, which means that your return may be lower than if you had invested directly in a fund based on the applicable Index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
5. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
6. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
7. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
8. | The available Indexed Accounts with applicable Performance Caps, Performance Trigger Rates and Protection Levels and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, Performance Trigger Rates and Performance Caps are available to you. There is no guarantee that an Indexed Account will be available in the future. You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. |
9. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
10. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index and Protection Level or Floor Protection if available. The Performance Cap or Performance Trigger Rate in effect at the time for new Indexed Segments will apply. The Performance Cap or Performance Trigger Rate for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP PIMCO Low Duration Bond Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
11. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
12. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
13. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests |
received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Rate |
• | Performance Cap |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap without Annual Locks | You receive all positive index performance up to the Performance Cap rate at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
Performance Cap with Annual Locks | An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date. You receive all positive index performance up to the Performance Cap each year of the Indexed Term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with an Annual Lock, and there is positive performance, the Performance Rate on the Indexed Segment End Date could be less than the actual index performance. |
• | If you select an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you previously selected an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. The Floor Protection method is no longer available. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or protection method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that more Contractowners than expected will qualify for waivers of the surrender charge; |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 1.30%* |
Account Value Death Benefit | 1.10%* |
Number of contract anniversaries since Purchase Payment was invested | |||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | |||||||
Surrender charge as a percentage of the surrendered or withdrawn Purchase Payments | 7% | 7% | 6% | 5% | 4% | 3% | 0% |
• | A surrender or withdrawal of a Purchase Payment beyond the sixth anniversary since the Purchase Payment was invested; |
• | Withdrawals of Contract Value during a Contract Year to the extent that the total Contract Value withdrawn during the current Contract Year does not exceed the free amount. The free amount is equal to the greater of 10% of the current Contract Value or 10% of the total Purchase Payments (this does not apply upon surrender of the Contract); |
• | Purchase Payments used in the calculation of the initial benefit payment to be made under an Annuity Payout option (other than the i4LIFE® Indexed Advantage option); |
• | A surrender or withdrawal of any Purchase Payments, as a result of permanent and total disability of the Contractowner as defined in Section 22(e)(3) of the tax code, if the disability occurred after the effective date of the Contract and before the 65th birthday of the Contractowner. For contracts issued in the state of New Jersey, a different definition of permanent and total disability applies;; |
• | A surviving spouse, at the time he or she assumes ownership of the Contract as a result of the death of the original owner (however, the surrender charge schedule of the original Contract will continue to apply to the spouse's Contract); |
• | A surrender or withdrawal of any Purchase Payments, as a result of the admittance of the Contractowner to an accredited nursing home or equivalent health care facility, where the admittance into the facility occurs after the effective date of the Contract and the owner has been confined for at least 90 consecutive days; |
• | A surrender or withdrawal of any Purchase Payments as a result of the diagnosis of a terminal illness of the Contractowner. Diagnosis of a terminal illness must be after the effective date of the contract and results in a life expectancy of less than one year as determined by a qualified professional medical practitioner; |
• | A surrender of the Contract as a result of the death of the Contractowner or Annuitant; |
• | Purchase Payments when used in the calculation of the initial Account Value under i4LIFE® Indexed Advantage; |
• | Periodic Income Payments made under i4LIFE® Indexed Advantage or periodic payments made under any Annuity Payout option made available by us; or |
• | A surrender of the Contract or a withdrawal of Contract Value from contracts issued to Selling Group Individuals; |
1. | The free amount will be withdrawn from Purchase Payments on a first in-first out (“FIFO”) basis. |
2. | Prior to the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) until exhausted; then |
• | from earnings until exhausted. |
3. | On or after the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge no longer applies until exhausted; then |
• | from earnings until exhausted; then |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge still applies until exhausted. |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your broker-dealer and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Account Value Death Benefit | Provides a Death Benefit equal to the Contract Value. | • 1.10% (as a percentage of Contract Value invested in the Subaccounts) | • Poor investment performance could significantly reduce the benefit.• Withdrawals could significantly reduce the benefit. |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 1.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the Contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
High total return (including income and capital gains) consistent with preservation of capital over the long term. | American Funds Asset Allocation Fund - Class 4 | 0.80% | 14.84% | 11.43% | 11.13% |
Growth of capital. | American Funds Growth Fund - Class 4 | 0.85% | 21.68% | 25.12% | 19.44% |
High total investment return. | BlackRock Global Allocation V.I. Fund - Class III This fund will be substituted with the LVIP BlackRock Global Allocation Fund on or about June 3, 2022. Consult your registered representative. | 1.00%2 | 6.42% | 9.71% | 7.68% |
Long-term growth of capital. | Fidelity® VIP Mid Cap Portfolio - Service Class 2 | 0.86% | 25.31% | 13.32% | 13.00% |
To provide total return by allocating among dividend-paying stocks and investment grade bonds. | First Trust/Dow Jones Dividend & Income Allocation Portfolio - Class I6, | 1.19% | 12.25% | 9.54% | N/A |
Long-term capital appreciation; preservation of capital is also an important consideration. | Franklin Rising Dividends VIP Fund - Class 4 | 0.98% | 26.63% | 16.69% | 14.28% |
To seek to achieve a high level of total return on its assets through a combination of capital appreciation and current income. | Invesco V.I. Equally-Weighted S&P 500 Fund - Series II Shares5, This fund is not available in contracts issued on or after June 21, 2021. | 0.60% | 28.88% | 15.14% | 14.91% |
To maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. | JPMorgan Insurance Trust Core Bond Portfolio - Class 2 | 0.79%2 | -1.66% | 3.32% | 2.72% |
High total investment return. | LVIP BlackRock Global Allocation Fund - Service Class This fund will be available on or about June 3, 2022. Consult your financial professional. | 0.98%2 | 7.31% | N/A | N/A |
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
Capital Appreciation. | LVIP MFS Value Fund - Service Class | 0.87%2 | 25.15% | 12.04% | 13.21% |
To seek a high level of current income consistent with preservation of capital. | LVIP PIMCO Low Duration Bond Fund - Service Class | 0.75%2 | -0.89% | 1.66% | N/A |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. | LVIP SSGA International Index Fund - Service Class | 0.62%2 | 10.78% | 9.13% | 7.45% |
To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. | LVIP SSGA S&P 500 Index Fund - Service Class4 | 0.48% | 28.10% | 17.89% | 15.98% |
To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. | LVIP SSGA Small-Cap Index Fund - Service Class | 0.63%2 | 14.27% | 11.28% | 12.48% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
1. | Fair Value of the Indexed Crediting Base.The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or are discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap or Performance Trigger Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your financial professional. | |
2. | Fair Value of Replicating Portfolio of Options - We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000217813
Prospectus 9
Lincoln Life Variable Annuity Account N
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
www.LincolnFinancial.com
1-877-737-6872
• | Employees and registered representatives of any member of the selling group (broker-dealers who have selling agreements with us for this product) and their spouses and minor children. |
• | Officers, directors, trustees or bona-fide full-time employees, retirees, and their spouses and minor children of Lincoln Financial Group or any of the investment advisers of the funds currently being offered, or their affiliated or managed companies. |
FEES AND EXPENSES | Location in Prospectus | |||
Charges for Early Withdrawals | If you make a withdrawal in excess of the free withdrawal amount before the 6th anniversary since your last Purchase Payment, you may be assessed a surrender charge of up to 7% of the amount withdrawn, declining to 0% over that time period. For example, if you make a withdrawal of $100,000 during the first year after your Purchase Payment, you could be assessed a charge of up to $7,000 on the Purchase Payment withdrawn. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Transaction Charges | None, other than surrender charges. | • Charges and Other Deductions | ||
Ongoing Fees and Expenses (annual charges) | Minimum and Maximum Annual Fee Table. The table below describes the fees and expenses that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. | • Fee Tables• Examples• Charges and Other Deductions – Surrender Charge | ||
Annual Fee | Minimum | Maximum | ||
Base Contract – Account Value Death Benefit | 1.11%1 | 1.11%1 | ||
Base Contract – Guarantee of Principal Death Benefit | 1.31%1 | 1.31%1 | ||
Fund Fees and Expenses | 0.48%1 | 1.52%1 | ||
Optional benefits available for an additional charge (for a single optional benefit, if elected) | 0.40%2 | 0.40%2 | ||
1As a percentage of average Account Value in the underlying funds. These fees are not applied against Contract Value invested in the Indexed Accounts. | ||||
1As a percentage of average Account Value in the Subaccounts and the Indexed Accounts. | ||||
Lowest and Highest Annual Cost Table. Because your Contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your Contract, the following table shows the lowest and highest cost you could pay each year. This estimate assumes that you do not take withdrawals from the Contract, which could add surrender charges that substantially increase costs. | ||||
Lowest Annual Cost: $1,879 | Highest Annual Cost: $3,522 | |||
Assumes: | Assumes: | |||
• Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Least expensive fund fees and expenses• No optional benefits• No surrender charges• No additional Purchase Payments, transfers, or withdrawals | • Investment of $100,000 (to the Subaccounts only)• 5% annual appreciation• Most expensive combination of optional benefits, fund fees and expenses• No surrender charges• No additional Purchase Payments, transfers, or withdrawals |
RISKS | Location in Prospectus | |||
Risk of Loss | • You can lose money by investing in the VAA portion of this Contract (the Subaccounts), including loss of principal.• You will lose money for all losses in excess of the Protection Level or up to the Floor Protection you choose.• An Interim Value is calculated if an early withdrawal is taken. This Interim Value formula may result in a loss even if the Index Value at the of the withdrawal is higher than the Index Value at the beginning of the Indexed Term. | • Principal Risks• Investments of the Variable Annuity Account | ||
Not a Short-Term Investment | • This Contract is not designed for short-term investing and may not be appropriate for the investor who needs access to cash.• Withdrawals may result in surrender charges. If you take a withdrawal, any surrender charge will reduce the value of your Contract or the amount of money that you actually receive. | • Principal Risks• Surrender and Withdrawals• Fee Tables• Charges and Other Deductions | ||
Risks Associated with Investment Options | • An investment in this Contract is subject to the risk of poor investment performance of the Investment Options you choose. Performance can vary depending on the performance of the Investment Options available under the Contract.• Each Investment Option has its own unique risks.• You should review the Investment Options before making an investment decision. | • Principal Risks• Investments of the Variable Annuity Account | ||
Insurance Company Risks | • An investment in the Contract is subject to the risks related to us. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Lincoln Life, including our financial strength ratings, is available upon request by calling 1-877-737-6872 or visiting www.LincolnFinancial.com. | • Principal Risks | ||
RESTRICTIONS | Location in Prospectus | |||
Investments | • The frequency of transfers between investment options is restricted. There are also restrictions on the minimum amount that may be transferred from a variable option.• We reserve the right to remove or substitute any Subaccounts or Indexed Accounts as Investment Options that are available under the Contract. | • Principal Risks• Investments of the Variable Annuity Account | ||
Optional Benefits | • i4LIFE® Indexed Advantage: A minimum level of Contract Value is required to elect.• Only available with Indexed Accounts with 1-year Indexed Terms.• Must be elected at the time of issue or on any indexed anniversary date. | • The Contracts | ||
TAXES | Location in Prospectus | |||
Tax Implications | • Consult with a tax professional to determine the tax implications of an investment in and payments received under this Contract.• If you purchase the Contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the Contract.• Earnings on your Contract are taxed at ordinary income tax rates when you withdraw them, and you may have to pay a penalty if you take a withdrawal before age 59½. | • Federal Tax Matters |
CONFLICTS OF INTEREST | Location in Prospectus | |||
Investment Professional Compensation | • Your registered representative may receive compensation for selling this Contract to you, both in the form of commissions and because we may share the revenue it earns on this Contract with the professional’s firm. (Your investment professional may be your broker, investment adviser, insurance agent, or someone else).• This potential conflict of interest may influence your investment professional to recommend this Contract over another investment. | • Distribution of the Contracts• Principal Risks | ||
Exchanges | • If you already own a contract, some investment professionals may have a financial incentive to offer you a new contract in place of the one you own. You should only exchange your contract if you determine, after comparing the features, fees, and risks of both contracts, that it is better for you to purchase the new contract rather than continue to own your existing contract. | • The Contracts - Replacement of Existing Insurance |
• | The Indexed Accounts available under the Contract, each of which has its own Indexed Term, Contract Value, Crediting Method, and Protection Level. |
• | The Subaccounts available under the Contract, each of which has an underlying mutual fund with its own investment objective, strategies, and risks; investment adviser(s); expense ratio; and performance history. |
• | Automatic Withdrawal Service. Allows you to automatically take periodic withdrawals from your Contract. |
• | Portfolio Rebalancing. Allows you to automatically reallocate your money among Subaccounts on a periodic basis based on your instructions. |
Surrender charge (as a percentage of Purchase Payments surrendered/withdrawn):1 | 7.00% |
1 | The surrender charge percentage is reduced over a 6-year period at the following rates: 7%, 7%, 6%, 5%, 4%, 3%. We may reduce or waive this charge in certain situations. See Charges and Other Deductions – Surrender Charge. |
Base Contract Expenses (as a percentage of average Contract Value in the Subaccounts)1, 2 | ||
Account Value Death Benefit | 1.10% | |
Guarantee of Principal Death Benefit | 1.30% | |
Optional Benefit Expenses | ||
i4LIFE® Indexed Advantage:3 | ||
Guaranteed Maximum and Current Annual Charge | 0.40% |
1 | The base contract expense is 1.10% after the Annuity Commencement Date. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
2 | Each base contract expense includes an administrative charge of 0.10%. |
3 | The i4LIFE® Indexed Advantage charge will be deducted from Contract Value to the Subaccounts and the Indexed Accounts on each rider anniversary. See Charges and Other Deductions – i4LIFE® Indexed Advantage Charge for more information. During the Lifetime Income Period, the mortality and expense risk and administrative charge for the variable payments will be 1.50%. |
Annual Fund Expenses | Minimum | Maximum | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses before reimbursements. | 0.48% | 1.52% | ||
Expenses that are deducted from the fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements.1 | 0.48% | 1.19% |
1 | Any expense waivers or reimbursements will remain in effect until at least April 30, 2023, and can only be terminated early with approval by the fund’s board of directors. These expenses do not apply to Contract Value invested in the Indexed Accounts. |
1 year | 3 years | 5 years | 10 years | |||
$10,249 | $15,920 | $20,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$3,249 | $9,920 | $16,832 | $35,215 |
1 year | 3 years | 5 years | 10 years | |||
$9,851 | $14,740 | $18,888 | $31,472 |
1 year | 3 years | 5 years | 10 years | |||
$2,851 | $8,740 | $14,888 | $31,472 |
• | S&P 500® Index |
• | Russell 2000® Price Return Index |
• | MSCI EAFE Price Return Index |
• | Capital Strength Net Fee IndexSM |
• | Nasdaq-100® Index |
• | First Trust American Leadership IndexTM |
1. | We reserve the right, within the law, to make certain changes to the structure and operation of the VAA or Indexed Accounts at our discretion and without your consent. We reserve the right to limit Purchase Payments into the Contract. We may add, delete, or substitute funds for all Contractowners or only for certain classes of Contractowners. We may add to or delete Indexed Accounts currently available. We do not guarantee that an Indexed Account option will always be available. |
2. | An investment in the Contract is subject to the risks related to us, Lincoln Life. Any obligations, guarantees, or benefits of the Contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. |
3. | This Contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash. The benefits of tax deferral and long-term income also mean that the Contract is more beneficial to investors with a long time investment horizon. |
4. | Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life. |
5. | You should carefully consider the risks associated with taking a withdrawal or surrender under the Contract. If you take a withdrawal or surrender the Contract, any applicable surrender charges will reduce the value of your Contract or the amount of money that you ultimately receive. The proceeds of your withdrawal or surrender may be subject to ordinary income taxes, including a tax penalty if you are younger than age 59½. |
6. | Your ability to make additional Purchase Payments may be restricted under the Contract, depending on the version of the Contract that you own, the optional benefits that you have elected, and other factors. You must obtain our approval for Purchase Payments totaling $2 million or more. This amount takes into consideration the total purchase payments for all existing Lincoln Level AdvantageSM contracts for the same owner, joint owner, or annuitant. We reserve the right to further limit, restrict or suspend the ability to make additional Purchase Payments under the Contract. |
7. | Annuity Payouts will fluctuate with the performance of the Subaccounts. |
8. | You may incur a surrender charge upon the surrender or withdrawal of Contract Value. See Charges and Other Deductions – Surrender Charge. |
9. | We rely heavily on interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. There can be no assurance that we or the underlying funds or our service providers will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future. |
In addition to cyber security risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and could lead to delays in our processing of contract-related transactions, including orders from Contractowners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes. |
1. | There is a risk of loss of your investment in the Indexed Segments since the performance tracks a market index. You are responsible for all losses in excess of the Protection Level or up to the Floor Protection you choose. The Protection Level or Floor Protection exists for the full term of the Indexed Segment including Segments with Annual Locks. Each time you move into a new Indexed Segment, you may have a new Protection Level or Floor Protection and are subject to the same risk of loss as described above. There is also a risk of loss upon an early withdrawal. For Annual Lock accounts, since the gain or loss is established each year, losses can accumulate so that you could actually lose more than the amount in excess of the Protection Level percent. Losses you incur in one year will reduce the amount invested for the next year. In a continuing down market, you could lose in excess of the Protection Level. For example, if you chose a 10% Protection Level and if loss occurred during each Annual Lock period for the remainder of the term, you could lose more than 90% of your principal in an Annual Lock account. |
2. | Gains in your Indexed Segments are limited by any applicable Performance Cap, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Performance Cap exists for the full term of the Indexed Segment. The Performance Cap rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Generally, Indexed Segments with greater Protection Levels or Floor Protection have lower Performance Caps. Performance Caps for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
3. | Gains in your Indexed Segments may be limited by any applicable Participation Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. If the Participation Rate is less than 100%, the increase in your Segment Value will never reflect the entire corresponding performance in the applicable index over the Indexed Term. The Participation Rate exists for the full term of the Indexed Segment. The Participation Rate may be lower for Contracts with the Guarantee of Principal Death Benefit. Participation Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
4. | Gains in your Indexed Segments are limited by any applicable Performance Trigger Rate. If the performance of the index is zero or positive, a specified rate is used to determine the Segment Maturity Value. The Performance Trigger Rate may be lower than the actual performance of the index, which means that your return may be lower than if you had invested directly in a fund based on the applicable index. The Performance Trigger Rate applies for the full term on the Indexed Segment. Generally, Indexed Segments with greater Protection Levels or Floor Protection, have lower Performance Trigger Rates. The Performance Trigger Rate may be lower for Contracts with Guarantee of Principal Death Benefit. Performance Trigger Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
5. | Gains in your Indexed Segments are limited by any applicable Spread Rate. If the performance of the index is positive, the performance of the Indexed Account will be reduced by the Spread Rate, which means that your return could be lower than if you had invested directly in a fund based on the applicable index. The Spread Rate applies for the full term on the Indexed Segment. The Spread Rate may be higher for Contracts with the Guarantee of Principal Death Benefit. Spread Rates for new Segments will be declared 5 business days in advance of the beginning of a Segment. |
6. | To determine the Interim Value, we apply a formula which does not reflect the actual performance of the applicable index, but rather a determination of the value of hypothetical underlying investments at the time of the Interim Value calculation. This amount could be less than if you had held the Indexed Segment for the full Indexed Term. It also means that you could have a negative performance, even if the value of the index has increased during the calculation period. All withdrawals from the Indexed Segment, including Death Benefits paid during the Indexed Term, will be based on the Interim Value. |
7. | If you withdraw Contract Value allocated to an Indexed Account, the withdrawal will cause an immediate reduction to your Indexed Crediting Base in a proportion equal to the reduction in your Interim Value. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Indexed Segment Maturity Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term. |
8. | For Indexed Accounts without an Annual Lock, the indexed performance credited to your Indexed Segment is determined on the last day of the Indexed Term. It is not affected by the price of the index on any date in between the effective date of the Indexed Account and the End Date of the Indexed Term. Annual Lock accounts are not affected by index prices between the Annual Lock anniversaries. |
9. | We may change the index on a particular Indexed Account if the index is discontinued or if we feel the index is no longer appropriate. This change may occur in the middle of an Indexed Segment and this change may impact how your Indexed Segment performance and Interim Value are calculated. See the Discontinuance or Substitution of an Index section later in the prospectus for more information. |
10. | The available Indexed Accounts with applicable Crediting Methods, Protection Levels, and Floor Protection will vary over time. Before investing in a new Indexed Segment, you should determine exactly what Indexed Accounts, Protection Levels, Floor Protections, and Crediting Methods are available to you. There is no guarantee that an Indexed Account will be available in the future. |
You risk the possibility that you would find declared caps and rates unacceptable, so you should make sure the Segment(s) you select is appropriate for your investment goals. | |
11. | The risks associated with the currently available indices are as follows: |
• | Equity markets are subject to the risk that the value of the securities may fall due to general market and economic conditions. Market volatility may exist with these indices, which means that the value of the indices can change dramatically over a short period of time in either direction. Additional risks for specific indices are as follows: |
• | S&P 500® Index: This index is comprised of equity securities issued by large-capitalization U.S. companies. In general large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | Russell 2000® Price Return Index: Compared to mid-and large-capitalization companies, small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid. |
• | MSCI EAFE Price Return Index: International investing involves special risks not found in domestic investing, including political and social differences and currency fluctuations due to economic decisions. Emerging markets can be riskier than investing in well-established foreign markets. The risks associated with investing on a worldwide basis include differences in the regulation of financial data and reporting, currency exchange differences, as well as economic and political systems differences. |
• | Capital Strength Net Fee IndexSM: This index has fewer stocks than broad based indices; therefore, the risk is spread between fewer equity securities. This index may not track other large cap indices. |
• | Nasdaq-100 Index®: This large-cap growth index is comprised of 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market based on market capitalization. This index is comprised of industries such as technology, consumer services, and health care. In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
• | First Trust American Leadership IndexTM: In general, large-capitalization companies may be unable to respond quickly to new competitive challenges and may not be able to attain the high growth rate of smaller companies, especially during periods of economic expansion. |
12. | If we do not receive investment instructions from you by the end of an Indexed Term, we will invest your Segment Maturity Value in a new Indexed Segment with the same term, index, and Protection Level or Floor Protection, if available. The Crediting Method in effect at the time for new Indexed Segments will apply. The Crediting Method for the new Indexed Segment could be less advantageous than the current Segment Term. If the same type of Indexed Segment is not available, your Segment Maturity Value will be moved to the LVIP PIMCO Low Duration Bond Fund. If your Contract Value has been invested in a new Segment and you wish to withdraw your investment, the Contract Value for that Segment will equal the Interim Value. |
13. | You will not have voting rights or rights to receive cash dividends or other rights that shareholders who invest in mutual funds based on these indices would have. |
14. | Your receipt of funds invested in the Indexed Segments is based on the claims paying ability of Lincoln Life. You have no ownership rights in the underlying securities. The assets backing the Indexed Accounts are not segregated from other business of Lincoln Life. |
15. | The only available annuitization option for the Indexed Accounts is i4LIFE® Indexed Advantage, which has an additional charge. |
1. | You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select. |
2. | The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases. |
3. | Certain classes of funds are subject to risk factors as outlined below: |
4. | Your ability to transfer amounts between Investment Options is subject to restrictions. You are generally restricted to no more than 12 transfers per Contract Year. There are also restrictions on the minimum amount that may be transferred from a variable option. |
5. | You are subject to the risk that we may increase certain contract fees and charges, and that underlying fund expenses may increase. |
6. | Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund. |
• | Start Date |
• | Crediting Base |
• | Performance Rate |
• | Performance Cap |
• | Participation Rate |
• | Spread Rate |
• | Performance Trigger Rate |
• | Contract Value |
• | End Date |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap without Annual Locks | You receive all positive index performance up to the Performance Cap at the end of the term. |
Participation Rate | You receive an amount equal to the Participation Rate times the positive index performance at the end of the term. |
Performance Trigger Rate | You receive the Performance Trigger Rate, if the index performance is zero or positive at the end of the term. |
Spread Rate | You receive all positive index performance above the Spread Rate at the end of the term. |
These are the Crediting Methods available when the index performance is positive (or flat for the Performance Trigger Rate): | |
Performance Cap with Annual Locks | An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date. You receive all positive index performance up to the Performance Cap each year of the Indexed Term. |
These are the downside protection methods available when the index performance is negative: | |
Protection Level | The portion of loss that the Company will absorb from any negative index performance. If the negative index performance is in excess of the Protection Level, there is a risk of loss of principal to the Contractowner. |
Floor Protection (no longer available) | The maximum percentage of loss the Contractowner will experience from any negative index performance. If the negative index performance is in excess of the floor level, Lincoln Life will absorb the additional loss. |
Indexed Account = 1-Year with a 10% Performance Cap
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Cap | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2023 | +7% | 10% | +7% | $100,000 | $107,000 |
1/8/2024 | +12% | 10% | +10% | $107,000 | $117,700 |
Indexed Account = 3-Year with a 115% Participation Rate
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +20% | 115% | 20% x 115% = 23% | $100,000 | $123,000 |
Indexed Account = 3-Year with a 95% Participation Rate
Allocation to Indexed Segment = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Participation Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2025 | +15% | +95% | 15% x 95% = 14.25% | $100,000 | $114,250 |
Indexed Account = 1-Year with a 5% Performance Trigger Rate and 10% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Performance Trigger Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
6/1/2023 | +2% | +5% | +5% | $100,000 | $105,000 |
Indexed Account = 6-Year with a 5% Spread Rate and 15% Protection
Allocation to Indexed Account = $100,000
Indexed Crediting Base = $100,000
B | A | = A + (A x B) | |||
Indexed Segment Anniversary | Index % Change | Spread Rate | Performance Rate | Indexed Crediting Base on the End Date (Prior to Segment Maturity Value calculation) | Segment Maturity Value |
1/8/2029 | +100% | +5% | +95% | $100,000 | $195,000 |
Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
Indexed Segment Anniversary | Index % Change | Account Performance Rate (adjusted for Cap or Protection Level) | Indexed Segment Performance Amount | Adjusted Indexed Crediting Base/ Anniversary Value |
1/8/2023 | +7% | +7% | $7,000 | $107,000 |
1/8/2024 | +12% | +10% | $10,700 | $117,700 |
1/8/2025 | -13% | -3% | -$3,531 | $114,169 |
1/8/2026 | -5% | 0% | $0 | $114,169 |
1/8/2027 | +5% | +5% | $5,708 | $119,877 |
1/8/2028 | +17% | +10% | $11,988 | $131,865 |
Indexed Account = 1-Year S&P 500 with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2023
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment Maturity Value = $95,000 ($100,000 - $5,000)
(The Indexed Segment Maturity Value is used to establish the Indexed Crediting Base for the new Indexed Segment.)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Maturity Value = $95,000 ($95,000 - $0)
Indexed Account = 1-Year S&P 500 with a -10% Floor Protection
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2024
Index Value at End Date = 1,333
Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Segment loss = $10,000 (-10% x $100,000)
Indexed Segment Maturity Value = $90,000 ($100,000 - $10,000)
Indexed Crediting Base = $90,000
Indexed Term Segment End Date = 1/8/2024
Index Value percentage change = -3%
Indexed Segment loss = $2,700 (-3% x $90,000)
Indexed Segment Maturity Value = $87,300 ($90,000 - $2,700)
• | If you choose an Indexed Segment with a Performance Cap, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date could be less than the actual index performance. If the actual index performance is greater than the Performance Cap, your Performance Rate will be lower, possibly significantly lower, than the actual index return. |
• | If you choose an Indexed Segment with a Participation Rate, and there is positive performance, the Performance Rate that we apply on the Indexed Segment End Date may be less than, equal to, or greater than the actual index return. |
• | If you choose an Indexed Segment with a Performance Trigger Rate, and there is positive performance, the Performance Rate on the Indexed Segment End Date, could be lower, possibly significantly lower, that the actual index return. |
• | If you choose an Indexed Segment with a Spread Rate, and there is positive performance, the Performance Rate we apply on the Indexed Segment End Date will be less than the actual index performance. If the positive index performance is less than the Spread Rate, your return will be zero. |
• | If you choose an Indexed Segment with an Annual Lock, and there is positive performance, the Performance Rate on the Indexed Segment End Date could be less than the actual index performance. |
• | If you select an Indexed Segment with a Protection Level of a certain percentage and there is a negative index performance, we absorb the first portion of a negative performance up to the stated percentage and you bear the risk of loss after your chosen Protection Level. |
• | If you previously selected an Indexed Segment with a Floor Protection and there is a negative index performance, you absorb the first portion of loss and we absorb the risk of loss beyond the Floor Protection. The Floor Protection method is no longer available. |
• | An index is discontinued; |
• | We are engaged in a contractual dispute with the index provider; |
• | We determine that our use of an index should be discontinued because, for example, changes to the index make it impractical or expensive to purchase securities or derivatives to hedge the index; |
• | There is a substantial change in the calculation of an index, resulting in significantly different values and performance; or |
• | A legal reason we cannot offer the index. |
• | There is a sufficiently large market in exchange traded and/or over-the-counter options, futures and similar derivative instruments based on the index to allow the company to hedge crediting rates; |
• | The index is recognized as a broad-based index for the relevant market; |
• | We can offer the same Crediting Method or protection method on the substitute index; and |
• | The publisher of the index permits the use of the index in the Contract and other materials for a reasonable fee. |
• | remove, combine, or add Subaccounts and make the new Subaccounts available to you at our discretion; |
• | transfer assets supporting the contracts from one Subaccount to another or from the VAA to another separate account; |
• | combine the VAA with other separate accounts and/or create new separate accounts; |
• | deregister the VAA under the 1940 Act; and |
• | operate the VAA as a management investment company under the 1940 Act or as any other form permitted by law. |
• | processing applications for and issuing contracts; |
• | processing purchases and redemptions of fund shares and from Indexed Accounts as required (including portfolio rebalancing, and automatic withdrawal services if available – See Additional Services and the SAI for more information on these programs); |
• | maintaining records; |
• | administering Annuity Payouts; |
• | furnishing accounting and valuation services (including the calculation and monitoring of daily Subaccount values, Indexed Contract Values and Interim Values); |
• | reconciling and depositing cash receipts; |
• | providing contract confirmations; |
• | providing toll-free inquiry services; and |
• | furnishing telephone and other electronic surrenders, withdrawals and fund transfer services. |
• | the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed); |
• | the risk that more Contractowners than expected will qualify for waivers of the surrender charge; |
• | the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change); |
• | the risks related to supporting and replicating Indexed Account performance with our assets; and |
• | the risk that Death Benefits paid will exceed the actual Contract Value. |
Guarantee of Principal Death Benefit | 1.30%* |
Account Value Death Benefit | 1.10%* |
Number of contract anniversaries since Purchase Payment was invested | |||||||||||||
0 | 1 | 2 | 3 | 4 | 5 | 6 | |||||||
Surrender charge as a percentage of the surrendered or withdrawn Purchase Payments | 7% | 7% | 6% | 5% | 4% | 3% | 0% |
• | A surrender or withdrawal of a Purchase Payment beyond the sixth anniversary since the Purchase Payment was invested; |
• | Withdrawals of Contract Value during a Contract Year to the extent that the total Contract Value withdrawn during the current Contract Year does not exceed the free amount. The free amount is equal to the greater of 10% of the current Contract Value or 10% of the total Purchase Payments (this does not apply upon surrender of the Contract); |
• | Purchase Payments used in the calculation of the initial benefit payment to be made under an Annuity Payout option (other than the i4LIFE® Indexed Advantage option); |
• | A surrender or withdrawal of any Purchase Payments, as a result of permanent and total disability of the Contractowner as defined in Section 22(e)(3) of the tax code, if the disability occurred after the effective date of the Contract and before the 65th birthday of the Contractowner. For contracts issued in the state of New Jersey, a different definition of permanent and total disability applies;; |
• | A surviving spouse, at the time he or she assumes ownership of the Contract as a result of the death of the original owner (however, the surrender charge schedule of the original Contract will continue to apply to the spouse's Contract); |
• | A surrender or withdrawal of any Purchase Payments, as a result of the admittance of the Contractowner to an accredited nursing home or equivalent health care facility, where the admittance into the facility occurs after the effective date of the Contract and the owner has been confined for at least 90 consecutive days; |
• | A surrender or withdrawal of any Purchase Payments as a result of the diagnosis of a terminal illness of the Contractowner. Diagnosis of a terminal illness must be after the effective date of the contract and results in a life expectancy of less than one year as determined by a qualified professional medical practitioner; |
• | A surrender of the Contract as a result of the death of the Contractowner or Annuitant; |
• | Purchase Payments when used in the calculation of the initial Account Value under i4LIFE® Indexed Advantage; |
• | Periodic Income Payments made under i4LIFE® Indexed Advantage or periodic payments made under any Annuity Payout option made available by us; or |
• | A surrender of the Contract or a withdrawal of Contract Value from contracts issued to Selling Group Individuals; |
1. | The free amount will be withdrawn from Purchase Payments on a first in-first out (“FIFO”) basis. |
2. | Prior to the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) until exhausted; then |
• | from earnings until exhausted. |
3. | On or after the sixth anniversary of the Contract, any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order: |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge no longer applies until exhausted; then |
• | from earnings until exhausted; then |
• | from Purchase Payments (on a FIFO basis) to which a surrender charge still applies until exhausted. |
• | the use of mass enrollment procedures, |
• | the performance of administrative or sales functions by the employer, |
• | the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees, |
• | the issue of a new Lincoln contract with the proceeds from the surrender of an existing Lincoln variable annuity contract, if available with your broker-dealer and in your state, or |
• | any other circumstances which reduce distribution or administrative expenses. |
1. | The total value of the fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus |
2. | The liabilities of the Subaccount at the end of the Valuation Period; these liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by us that we determine result from the operations of the VAA; and |
3. | The result is divided by the number of Subaccount units outstanding at the beginning of the Valuation Period. |
1. | proportionately from all Subaccounts within the VAA, until exhausted; then |
2. | the transfer account; then |
3. | proportionately from all Indexed Accounts. |
1/1/2022 Indexed Crediting Base = $80,000
6/1/2022 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Maturity Value will be based on the $16,000 Indexed Crediting Base
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Standard Benefits | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
Account Value Death Benefit | Provides a Death Benefit equal to the Contract Value. | • 1.10% (as a percentage of Contract Value invested in the Subaccounts) | • Poor investment performance could significantly reduce the benefit.• Withdrawals could significantly reduce the benefit. |
Guarantee of Principal Death Benefit | Provides a Death Benefit equal to the greatest of (1) Contract Value; (2) all Purchase Payments, adjusted for withdrawals. | • 1.30% (as a percentage of Contract Value invested in the Subaccounts) | • Withdrawals could significantly reduce the benefit. |
Portfolio Rebalancing | Allows you to automatically reallocate your Contract Value among the Subaccounts on a periodic basis based on your standing allocation instructions. | None | • Not available for the portion of Contract Value held in the Indexed Accounts. |
Automatic Withdrawal Service | Allows you to take periodic withdrawals from your Contract automatically. | None | • Not available when i4LIFE® Indexed Advantage is in effect. |
Optional Benefits – Available for Election | |||
Name of Benefit | Purpose | Maximum Fee | Brief Description of Restrictions / Limitations |
i4LIFE® Indexed Advantage | Provides:• Variable periodic Regular Income Payments for life.• The ability to make additional withdrawals and surrender the Contract during the Access Period. | • 0.40% in addition to your base contract expense, if any | • Withdrawals could significantly reduce or terminate the benefit.• Restrictions apply to the length of the Access Period.• Additional Purchase Payments may be subject to restrictions. |
upon death of: | and... | and... | Death Benefit proceeds pass to: |
Contractowner | There is a surviving joint owner | The Annuitant is living or deceased | Joint owner |
Contractowner | There is no surviving joint owner | The Annuitant is living or deceased | Designated Beneficiary |
Contractowner | There is no surviving joint owner and the Beneficiary predeceases the Contractowner | The Annuitant is living or deceased | Contractowner's estate |
Annuitant | The Contractowner is living | There is no contingent Annuitant | The youngest Contractowner becomes the contingent Annuitant and the Contract continues. The Contractowner may waive* this continuation and receive the Death Benefit proceeds. |
Annuitant | The Contractowner is living | The contingent Annuitant is living | Contingent Annuitant becomes the Annuitant and the Contract continues |
Annuitant** | The Contractowner is a trust or other non-natural person | No contingent Annuitant allowed with non-natural Contractowner | Designated Beneficiary |
* | Notification from the Contractowner to receive the Death Benefit proceeds must be received within 75 days of the death of the Annuitant. |
** | Death of Annuitant is treated like death of the Contractowner. |
• | the Contract Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments decreased by all withdrawals in the same proportion that withdrawals reduce the Contract Value. |
1. | on the Annuity Commencement Date; |
2. | upon payment of a Death Benefit under the Guarantee of Principal Death Benefit (unless the Contract is continued by the surviving spouse); or |
3. | at any time all Contractowners or Annuitants are changed. |
1. | an original certified death certificate, or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | if any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or |
• | if no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate. |
Minimum Access Period | Maximum Access Period |
The greater of 20 years or the difference between your nearest age and age 90, based on the youngest covered life if joint life is elected | The length of time between your age and age 115 for nonqualified contracts (based on the youngest covered life if joint life is elected); age 100 for qualified contracts. |
• | the age and sex of the Annuitant and Secondary Life, if applicable; |
• | the length of the Access Period selected; |
• | the 3% Assumed Interest Rate (AIR); and |
• | the Individual Annuity Mortality table specified in your Contract. |
• | the Account Value as of the Valuation Date we approve the payment of the claim; or |
• | the sum of all Purchase Payments, less the sum of the Periodic Income Payments and other withdrawals where: |
• | Periodic Income Payments and any additional Required Minimum Distribution payments reduce the Death Benefit by the dollar amount of the payment; and |
• | All other withdrawals, if any, reduce the Death Benefit in the same proportion that withdrawals reduce the Contract Value or Account Value. |
Guarantee of Principal Death Benefit | $200,000 |
i4LIFE® Indexed Advantage Periodic Income Payment | $25,000 |
Additional withdrawal | $15,000 ($15,000/$150,000 = 10% withdrawal) |
Account Value at the time of withdrawal | $150,000 |
Reduction in Death Benefit value for withdrawal = $175,000 x 10% = $17,500
Death Benefit value after withdrawal = $175,000 - $17,500 = $157,500
1. | an original certified death certificate or any other proof of death satisfactory to us; and |
2. | written authorization for payment; and |
3. | all required claim forms, fully completed (including selection of a settlement option). |
• | proof, satisfactory to us, of the death; |
• | written authorization for payment; and |
• | all claim forms, fully completed. |
• | the Contract Value on the Annuity Commencement Date, less any applicable premium taxes; |
• | the annuity tables contained in the Contract; |
• | the annuity option selected; and |
• | the investment performance of the fund(s) selected. |
1. | Determine the dollar amount of the first periodic payout; then |
2. | Credit the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and |
3. | Calculate the value of the Annuity Units each period thereafter. |
• | your Contract Value drops below certain state specified minimum amounts ($1,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Subaccounts you selected; |
• | no Purchase Payments have been received for two (2) full, consecutive Contract Years; and |
• | the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month (these requirements may differ in some states). |
• | when the NYSE is closed (other than weekends and holidays); |
• | times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or |
• | when the SEC so orders to protect Contractowners. |
• | An individual must own the Contract (or the Code must treat the Contract as owned by an individual). |
• | The investments of the VAA must be “adequately diversified” in accordance with Treasury regulations. |
• | Your right to choose particular investments for a Contract must be limited. |
• | The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy. |
• | Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees; |
• | Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period; |
• | Contracts acquired by an estate of a decedent; |
• | Certain qualified contracts; |
• | Contracts purchased by employers upon the termination of certain qualified plans; and |
• | Certain contracts used in connection with structured settlement agreements. |
• | If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts. |
• | If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner. |
• | If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income. |
• | If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of Purchase Payments not previously received. |
• | you receive on or after you reach 59½, |
• | you receive because you became disabled (as defined in the Code), |
• | you receive from an immediate annuity, |
• | a Beneficiary receives on or after your death, or |
• | you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify). |
• | Individual Retirement Accounts and Annuities (“Traditional IRAs”) |
• | Roth IRAs |
• | Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”) |
• | SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees) |
• | 401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans) |
• | 403(a) plans (qualified annuity plans) |
• | 403(b) plans (public school system and tax-exempt organization annuity plans) |
• | H.R. 10 or Keogh Plans (self-employed individual plans) |
• | 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations) |
• | Increased the required beginning date measuring age from 70½ to 72 for any participant or IRA owner who did not attain age 70½ prior to January 1, 2020. As a result, required minimum distributions are generally required to begin by April 1 of the year following the year in which a participant or IRA owner reached age 72. |
• | Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age. |
• | Changed the required minimum distribution rules that apply after the death of a participant or IRA owner. |
• | Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions. |
• | Federal tax rules limit the amount of Purchase Payments or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation). |
• | Minimum annual distributions are required under some qualified retirement plans once you reach age 72 or retire, if later as described below. |
• | Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans. |
• | Distribution received on or after the Annuitant reaches 59½, |
• | Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code), |
• | Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy), |
• | Distribution received as reimbursement for certain amounts paid for medical care, or |
• | Distribution received for a “qualified birth or adoption” event. |
• | deduction of any account fee or rider charges; |
• | any rebalancing event under the portfolio rebalancing service; |
• | any transfer or withdrawal under AWS; and |
• | Periodic Income Payments from i4LIFE® Indexed Advantage. |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
High total return (including income and capital gains) consistent with preservation of capital over the long term. | American Funds Asset Allocation Fund - Class 4 | 0.80% | 14.84% | 11.43% | 11.13% |
Growth of capital. | American Funds Growth Fund - Class 4 | 0.85% | 21.68% | 25.12% | 19.44% |
High total investment return. | BlackRock Global Allocation V.I. Fund - Class III This fund will be substituted with the LVIP BlackRock Global Allocation Fund on or about June 3, 2022. Consult your registered representative. | 1.00%2 | 6.42% | 9.71% | 7.68% |
Long-term growth of capital. | Fidelity® VIP Mid Cap Portfolio - Service Class 2 | 0.86% | 25.31% | 13.32% | 13.00% |
To provide capital appreciation. | First Trust Capital Strength Portfolio – Class I | 1.10%2 | 25.30% | N/A | N/A |
To provide total return by allocating among dividend-paying stocks and investment grade bonds. | First Trust/Dow Jones Dividend & Income Allocation Portfolio - Class I6, | 1.19% | 12.25% | 9.54% | N/A |
Long-term capital appreciation; preservation of capital is also an important consideration. | Franklin Rising Dividends VIP Fund - Class 4 | 0.98% | 26.63% | 16.69% | 14.28% |
To seek to achieve a high level of total return on its assets through a combination of capital appreciation and current income. | Invesco V.I. Equally-Weighted S&P 500 Fund - Series II Shares5, This fund is not available in contracts issued on or after June 21, 2021. | 0.60% | 28.88% | 15.14% | 14.91% |
To maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. | JPMorgan Insurance Trust Core Bond Portfolio - Class 2 | 0.79%2 | -1.66% | 3.32% | 2.72% |
High total investment return. | LVIP BlackRock Global Allocation Fund - Service Class This fund will be available on or about June 3, 2022. Consult your registered representative. | 0.98%2 | 7.31% | N/A | N/A |
Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your initial investment (preservation of capital). | LVIP Government Money Market Fund - Service Class | 0.67% | 0.02% | 0.61% | 0.32% |
Capital Appreciation. | LVIP MFS Value Fund - Service Class | 0.87%2 | 25.15% | 12.04% | 13.21% |
To seek a high level of current income consistent with preservation of capital. | LVIP PIMCO Low Duration Bond Fund - Service Class | 0.75%2 | -0.89% | 1.66% | N/A |
Investment Objective | Fund and Adviser/Sub-adviser1 | Current Expenses | Average Annual Total Returns (as of 12/31/2021) | ||
1 year | 5 year | 10 year | |||
To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. | LVIP SSGA International Index Fund - Service Class | 0.62%2 | 10.78% | 9.13% | 7.45% |
To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. | LVIP SSGA S&P 500 Index Fund - Service Class4 | 0.48% | 28.10% | 17.89% | 15.98% |
To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. | LVIP SSGA Small-Cap Index Fund - Service Class | 0.63%2 | 14.27% | 11.28% | 12.48% |
1 | The name of the adviser or sub-adviser is not listed if the name is incorporated into the name of the fund or the fund company. |
2 | This fund is subject to an expense reimbursement or fee waiver arrangement. As a result, this fund’s annual expenses reflect temporary expense reductions. See the fund prospectus for additional information. |
3 | Investments in Delaware VIP Series, Delaware Funds, Ivy Variable Insurance Portfolios, Ivy Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
4 | The index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S& P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
5 | Standard & Poor’s®,” “S&P®,” “Standard & Poor’s Equal Weight Index,” “S&P EWI,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Invesco V.I. Equally-Weighted S&P 500 Fund. The fund is not sponsored, endorsed, sold or promoted by S&P, and S&P makes no representation regarding the advisability of investing in the fund. |
6 | Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademark has been licensed to S&P Dow Jones Indices LLC and has been sublicensed for use for certain purposes by First Trust Advisors L.P. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of purchasing the product. |
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed in the Indexed Term divided by total number of days in the Indexed Term.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = the greater of 0 and the Index performance for the Indexed Segment as determined on the Valuation Date the Interim Value is calculated;
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = Performance Trigger Rate;
H = 0, if the Index performance on the Valuation Date the Interim Value is calculated is less than 0; or the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term, if the Index performance is greater than or equal to 0.
D = the Reference Rate;
E = the total number of days remaining in the Indexed Term divided by 365.
G = 999% minus the Spread Rate;
H = the total number of days elapsed in the Indexed Term divided by the total number of days in the Indexed Term;
I = the greater of zero, or the percentage change of the Index Value between the Start Date and Valuation Date of the calculation minus the Spread Rate.
E = the total number of days remaining in the Indexed Term divided by 365.
G = the Performance Cap for the Indexed Segment;
H = the total number of days elapsed since the prior Indexed Anniversary Date divided by 365.
1. | Fair Value of the Indexed Crediting Base. The fair value of the Indexed Crediting Base of an Indexed Segment with no Annual Locks or an Indexed Segment with Annual Locks is meant to represent the market value of the investment instruments supporting the Indexed Segment. It is the present value of the Indexed Crediting Base of the Indexed Segment discounted at a rate that reflects movements in the interest rate market. The Reference Rate will apply on a uniform basis for a class of Contractowners in the same Indexed Segment and will be administered in a uniform and non-discriminatory manner. |
The Reference Rate is based on a U.S. Treasury Constant Maturity yield plus a market observable spread of investments grade U.S. Corporate Bonds. The U.S. Treasury Constant Maturity yield is the rate for the maturity using a set duration. The duration is |
set to represent the duration of the investment instruments supporting the Indexed Segment and may not match the actual length of the Indexed Segment. | |
If the U.S. Treasury Constant Maturity yield is not published for a particular day, then we will use the yield on the next day it is published. If the U.S. Treasury Constant Maturity yield is no longer published, or is discontinued, then we may substitute another suitable method for determining this component of the Reference Rate. If a U.S. Treasury Constant Maturity yield is not published for a time to maturity that matches the selected duration, then the yield will be interpolated between the yield for maturities that are published. | |
If the market observable spread of investments grade U.S. Corporate Bonds are no longer available, or is discontinued, we will substitute another suitable index or indexes for determining this component of the Reference Rate. We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion. | |
The Reference Rate may be reduced by a rate reduction factor, which increases the value of (1) above. This rate reduction factor will vary with each Indexed Account option and will be declared at the same time a Performance Cap, Participation Rate, Performance Trigger Rate, or Spread Rate is declared. Currently, the rate reduction factor does not apply to 1-year Indexed Accounts. This rate reduction factor is available upon request by calling us. State variations may apply. Consult your registered representative. | |
2. | Fair Value of Replicating Portfolio of Options. We utilize a fair market value methodology to value the replicating portfolio of options that support this product. |
3. | Part B depends on the type of Crediting Method and places an upper limit on the performance crediting during the Indexed Term. |
1 Year | 6 Year | 6 Year | |
Indexed Term length | 12 months | 72 months | 72 months |
Months since Indexed Term Start Date | 9 | 69 | 15 |
Indexed Crediting Base | $1,000 | $1,000 | $1,000 |
Protection Level | 10% | 10% | 10% |
Performance Cap | 11.25% | 100% | 100% |
Months to End Date | 3 | 3 | 57 |
Change in Index Value is -30% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(202) | $(223) |
A. Sum of 1 + 2 | $796 | $796 | $738 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $796 | $796 | $738 |
Change in Index Value is -10% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(29) | $(57) |
A. Sum of 1 + 2 | $969 | $969 | $904 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $969 | $969 | $904 |
Change in Index Value is 20% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $99 | $201 | $197 |
A. Sum of 1 + 2 | $1,097 | $1,199 | $1,158 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,199 | $1,158 |
Change in Index Value is 40% | 1 Year | 6 Year | 6 Year |
1. Fair Value of the Indexed Crediting Base | $998 | $998 | $961 |
2. Fair Value of Replicating Portfolio of Options | $108 | $398 | $343 |
A. Sum of 1 + 2 | $1,106 | $1,396 | $1,304 |
B. Application of pro-rated Performance Cap | $1,084 | $1,958 | $1,208 |
Account Interim Value = Minimum of A and B | $1,084 | $1,396 | $1,208 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection | -10% | -10% | |
Performance Cap | 5% | 5% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(86) | $(77) | |
A. Sum of 1 + 2 | $910 | $916 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $910 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(27) | |
A. Sum of 1 + 2 | $965 | $966 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $965 | $966 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $28 | $21 | |
A. Sum of 1 + 2 | $1,024 | $1,014 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,024 | $1,014 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $39 | $32 | |
A. Sum of 1 + 2 | $1,035 | $1,025 | |
B. Application of pro-rated Performance Cap | $1,029 | $1,017 | |
Account Interim Value = Minimum of A and B | $1,029 | $1,017 |
3 Year | 3 Year | ||
Indexed Term length | 36 months | 36 months | |
Months since Indexed Term Start Date | 33 | 15 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Participation Rate | 70% | 70% | |
Months to End Date | 3 | 21 |
Change in Index Value is -30% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(202) | $(214) | |
A. Sum of 1 + 2 | $797 | $783 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $797 | $783 |
Change in Index Value is -10% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $(29) | $(73) | |
A. Sum of 1 + 2 | $970 | $924 | |
B. Application of pro-rated Participation Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $970 | $924 |
Change in Index Value is 20% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $139 | $131 | |
A. Sum of 1 + 2 | $1,138 | $1,128 | |
B. Application of pro-rated Participation Rate | $1,140 | $1,140 | |
Account Interim Value = Minimum of A and B | $1,138 | $1,128 |
Change in Index Value is 40% | 3 Year | 3 Year | |
1. Fair Value of the Indexed Crediting Base | $999 | $997 | |
2. Fair Value of Replicating Portfolio of Options | $278 | $264 | |
A. Sum of 1 + 2 | $1,277 | $1,261 | |
B. Application of pro-rated Participation Rate | $1,280 | $1,280 | |
Account Interim Value = Minimum of A and B | $1,277 | $1,261 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 10% | 10% | |
Performance Trigger Rate | 9.50% | 9.50% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $(65) | $(72) | |
A. Sum of 1 + 2 | $930 | $920 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $930 | $920 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $5 | $(3) | |
A. Sum of 1 + 2 | $1,000 | $989 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $1,000 | $989 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $67 | $54 | |
A. Sum of 1 + 2 | $1,062 | $1,046 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $995 | $992 | |
2. Fair Value of Replicating Portfolio of Options | $79 | $69 | |
A. Sum of 1 + 2 | $1,074 | $1,061 | |
B. Application of pro-rated Performance Trigger Rate | $1,055 | $1,032 | |
Account Interim Value = Minimum of A and B | $1,055 | $1,032 |
1 Year | 1 Year | ||
Indexed Term length | 12 months | 12 months | |
Months since Indexed Term Start Date | 7 | 4 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Floor Protection Level | -10% | -10% | |
Performance Trigger Rate | 4.75% | 4.75% | |
Months to End Date | 5 | 8 |
Change in Index Value is -15% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(85) | $(77) | |
A. Sum of 1 + 2 | $911 | $916 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $911 | $916 |
Change in Index Value is -5% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $(31) | $(29) | |
A. Sum of 1 + 2 | $965 | $964 | |
B. Application of pro-rated Performance Trigger Rate | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $965 | $964 |
Change in Index Value is 10% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $23 | $15 | |
A. Sum of 1 + 2 | $1,019 | $1,008 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,019 | $1,008 |
Change in Index Value is 20% | 1 Year | 1 Year | |
1. Fair Value of the Indexed Crediting Base | $996 | $993 | |
2. Fair Value of Replicating Portfolio of Options | $34 | $27 | |
A. Sum of 1 + 2 | $1,030 | $1,020 | |
B. Application of pro-rated Performance Trigger Rate | $1,028 | $1,016 | |
Account Interim Value = Minimum of A and B | $1,028 | $1,016 |
6 Year | 6 Year | ||
Indexed Term length | 72 Months | 72 Months | |
Months since Indexed Term Start Date | 60 | 12 | |
Indexed Crediting Base | $1,000 | $1,000 | |
Protection Level | 15% | 15% | |
Spread Rate | 5% | 5% | |
Months to End Date | 12 | 60 |
Change in Index Value is -20% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $(90) | $(120) | |
A. Sum of 1 + 2 | $901 | $843 | |
B. Interim Value Limit | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $901 | $843 |
Change in Index Value is -5% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $(11) | $(6) | |
A. Sum of 1 + 2 | $980 | $957 | |
B. Interim Value Limit | $1,000 | $1,000 | |
Account Interim Value = Minimum of A and B | $980 | $957 |
Change in Index Value is 60% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $541 | $558 | |
A. Sum of 1 + 2 | $1,532 | $1,521 | |
B. Interim Value Limit | $1,550 | $1,550 | |
Account Interim Value = Minimum of A and B | $1,532 | $1,521 |
Change in Index Value is 100% | 6 Year | 6 Year | |
1. Fair Value of the Indexed Crediting Base | $991 | $963 | |
2. Fair Value of Replicating Portfolio of Options | $933 | $927 | |
A. Sum of 1 + 2 | $1,924 | $1,890 | |
B. Interim Value Limit | $1,950 | $1,950 | |
Account Interim Value = Minimum of A and B | $1,924 | $1,890 |
• | Mailing: The Lincoln National Life Insurance Company, PO Box 2348, Fort Wayne, IN 46801-2348 |
• | Visiting: www.lfg.com/VAprospectus |
• | Emailing: CustServSupportTeam@lfg.com |
• | Calling: 1-877-737-6872 |
EDGAR Contract Identifier C000222779