Lincoln Level Advantage Indexed Variable Annuity

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fredbogle1
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Lincoln Level Advantage Indexed Variable Annuity

Post by fredbogle1 »

Dear Sirs,
I am considering rolling over one of my retirement accounts to purchase a Lincoln Level Advantage Indexed Variable Annuity. The Variable index tracks the S & P 500 index, offers a 20% level of protection, must be held for 6 years, and has a performance cap of 150%. The are no fees according to my advisor. I can see no reason not to buy this variable annuity, especially since it has a 20% level of protection. Does anyone have any advice or words of caution? Thank, you.
petulant
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by petulant »

Why do you think this is a good idea? 20% level of protection, as in you only suffer losses worse than 20%, or your max loss is 20%? Cap of 150% of what, exactly? No fees? Really? It sounds like you are being sold by an insurance salesman.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by livesoft »

I don't even know what 20% level of protection means.

Also note that it is unlikely that you will get any of the S&P500 dividends that folks who hold an S&P500 index fund will get. At least that's how these indexed variable annuity works. In other words, the dividends you don't get could be considered a fee.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by 000 »

There are "no fees" because presumably they are eating up all your dividends, which can be a huge part of stock returns.

I'd run away.
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Brianmcg321
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Brianmcg321 »

No. Terrible product.

He’s lying to you when he says there are no fees.
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Nate79
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Nate79 »

fredbogle1 wrote: Tue Sep 01, 2020 7:47 pm Dear Sirs,
I am considering rolling over one of my retirement accounts to purchase a Lincoln Level Advantage Indexed Variable Annuity. The Variable index tracks the S & P 500 index, offers a 20% level of protection, must be held for 6 years, and has a performance cap of 150%. The are no fees according to my advisor. I can see no reason not to buy this variable annuity, especially since it has a 20% level of protection. Does anyone have any advice or words of caution? Thank, you.
Have you done a search on here for this type of product and the opinion on them?
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David Jay
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by David Jay »

No, no, no - do not put tax-advantaged funds into a variable annuity.

Your so-called “financial advisor” is just an annuity salesman who will be paid 6-8% of the amount he can talk you into putting into the annuity.

Ask him for a link to the prospectus and post the link here, we will help you to understand what you are (and are not) getting.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by arcticpineapplecorp. »

from the horse's...er, mouth (source: source: https://www.lfg.com/public/individual/e ... ladvantage):
Pay less

There are no explicit product charges on the money invested in the indexed accounts.
but then says:
...there are costs associated with the variable investment options such as product charges. There are no explicit fees associated with the index-linked accounts...
also this:
There are no explicit fees associated with the indexed-linked account options available. There are associated fees with the variable annuity subaccounts, which include a product charge, and administrative fees. Annuities are subject to market risk including loss of principal. Withdrawals are subject to ordinary income tax treatment and, if taken prior to age 59½ in nonqualified contracts, may be subject to an additional 10% federal tax. Withdrawals may also be subject to a contractual withdrawal charge.

Indexed-linked variable annuity products are complex insurance and investment vehicles and are subject to surrender charges for early withdrawals. Please reference the prospectus for information about the levels of protection available and other important product information.

The risk of loss occurs each time you move into a new indexed account after the end of an indexed term. The protection level option selected in the indexed account helps protect you from some downside risk. If the negative return is in excess of the protection level selected, there is a risk of loss of principal. Protection levels vary based on the index and term selected are subject to change and may not be available with every option. Please see the prospectus for details.
no fees? you still wanna work with this dishonest clown?

if you're not the kind of person that can say No and mean it, you'd best change the phone number you gave to the salesman. He's likely salivating for his commission and your phone will be ringing until you sign on the dotted line.
Last edited by arcticpineapplecorp. on Tue Sep 01, 2020 8:56 pm, edited 1 time in total.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by BillWalters »

Run. They take all the dividends. And watch out for “participation rate.” The salesman makes up to 10% of your investment in commission for a reason.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Stinky »

fredbogle1 wrote: Tue Sep 01, 2020 7:47 pm Dear Sirs,
I am considering rolling over one of my retirement accounts to purchase a Lincoln Level Advantage Indexed Variable Annuity. The Variable index tracks the S & P 500 index, offers a 20% level of protection, must be held for 6 years, and has a performance cap of 150%. The are no fees according to my advisor. I can see no reason not to buy this variable annuity, especially since it has a 20% level of protection. Does anyone have any advice or words of caution? Thank, you.
Welcome to the Forum!

I'm really glad that you posted your question before you committed to a horrible, awful, terrible purchase. Others have already given good advice as to why you should not buy this piece of garbage.

When the advisor tells you that "there are no fees", that is a bold-faced, red-letter lie. You may not see any explicit "fee" line on your annual report for the annuity, but the product has multiple layers of fees embedded in a way that you don't clearly see them.

Tell the salesman "no". And don't talk to him again.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Mel Lindauer »

Here's a link to a Forbes column I did some time ago on these terrible products, It's titled "The Truth About Equity-Indexed Annuities".

https://www.forbes.com/2010/08/10/truth ... 35fdaa1257
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FiveK
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by FiveK »

fredbogle1 wrote: Tue Sep 01, 2020 7:47 pm The Variable index tracks the S & P 500 index....
If you aren't an insurance sales person yourself, then it's likely you have no idea how "tracks" is defined in the contract, and how that compares with the return you would get if investing in an actual S&P 500 index fund. Is that correct?
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Raymond
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Raymond »

fredbogle1 wrote: Tue Sep 01, 2020 7:47 pm ...There are no fees according to my advisor...
When a person (the advisor in this case) starts a business or personal relationship by lying to you from the start, things are unlikely to improve with the passage of time.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by whyamihere »

BillWalters wrote: Tue Sep 01, 2020 8:55 pm The salesman makes up to 10% of your investment in commission for a reason.
David Jay wrote: Tue Sep 01, 2020 8:41 pm Your so-called “financial advisor” is just an annuity salesman who will be paid 6-8% of the amount he can talk you into putting into the annuity.

Ask him for a link to the prospectus and post the link here, we will help you to understand what you are (and are not) getting.
There can be a no commission on this annuity. There are Advisory classes distributed via the registered investment advisor channel and commissions are removed from the product. Many companies offer these but few advisors do (again no commission!)

It looks like the agent is offering the commission version but the no commission version is available and has higher rates offered.

Generic answers without doing your homework! Boo!

https://money.cnn.com/retirement/guide/ ... index6.htm
Last edited by whyamihere on Wed Sep 02, 2020 6:34 am, edited 1 time in total.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by whyamihere »

Mel Lindauer wrote: Tue Sep 01, 2020 10:06 pm Here's a link to a Forbes column I did some time ago on these terrible products, It's titled "The Truth About Equity-Indexed Annuities".

https://www.forbes.com/2010/08/10/truth ... 35fdaa1257
Hi Mel,

In that article the white paper by McCann brings up a few points:
“Existing equity-indexed annuities are too complex for the industry’s sales force and its target investors to understand the investment.

–This complexity is designed into what is actually a quite simple investment product to allow the true cost of the product to be completely hidden.

–The high hidden costs in equity-indexed annuities are sufficient to pay extraordinary commissions to a sales force that is not disciplined by sales practice abuse deterrents found in the market for regulated securities.

– Unsophisticated investors will continue to be victimized by issuers of equity-indexed annuities until truthful disclosure and the absence of sales practice abuses is assured.”
Is it fair to assume that your opinion of the use of EIAs might be different for:
-no commission and no surrender charge annuities that are simplified
-investors who purchase with expectations of bond market returns in a portfolio (not equity despite having the S&P price index plastered on the material)
-more affluent investors that can benefit from tax deferral in working years with excess non qualified savings they earmark for retirement

Generic advice on the internet can be useful but I don't think anyone should completely rule out a tool in a toolbox for someone if they know how to use it; last I checked they still rent power washers and heavy equipment at Home Depot and no one is on this forum warning of the harm of using a commercial power washer from Homer's. Then again they're not marketed as a guaranteed return investment! :sharebeer
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by jaj2276 »

whyamihere wrote: Wed Sep 02, 2020 6:15 am ...
Why are you here?
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Nate79 »

whyamihere wrote: Wed Sep 02, 2020 6:15 am
BillWalters wrote: Tue Sep 01, 2020 8:55 pm The salesman makes up to 10% of your investment in commission for a reason.
David Jay wrote: Tue Sep 01, 2020 8:41 pm Your so-called “financial advisor” is just an annuity salesman who will be paid 6-8% of the amount he can talk you into putting into the annuity.

Ask him for a link to the prospectus and post the link here, we will help you to understand what you are (and are not) getting.
There can be a no commission on this annuity. There are Advisory classes distributed via the registered investment advisor channel and commissions are removed from the product. Many companies offer these but few advisors do (again no commission!)

It looks like the agent is offering the commission version but the no commission version is available and has higher rates offered.

Generic answers without doing your homework! Boo!

https://money.cnn.com/retirement/guide/ ... index6.htm
Do you work in the insurance industry, sell insurance or are an investment advisor that sells insurance?
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by petulant »

whyamihere wrote: Wed Sep 02, 2020 6:30 am
Mel Lindauer wrote: Tue Sep 01, 2020 10:06 pm Here's a link to a Forbes column I did some time ago on these terrible products, It's titled "The Truth About Equity-Indexed Annuities".

https://www.forbes.com/2010/08/10/truth ... 35fdaa1257
Hi Mel,

In that article the white paper by McCann brings up a few points:
“Existing equity-indexed annuities are too complex for the industry’s sales force and its target investors to understand the investment.

–This complexity is designed into what is actually a quite simple investment product to allow the true cost of the product to be completely hidden.

–The high hidden costs in equity-indexed annuities are sufficient to pay extraordinary commissions to a sales force that is not disciplined by sales practice abuse deterrents found in the market for regulated securities.

– Unsophisticated investors will continue to be victimized by issuers of equity-indexed annuities until truthful disclosure and the absence of sales practice abuses is assured.”
Is it fair to assume that your opinion of the use of EIAs might be different for:
-no commission and no surrender charge annuities that are simplified
-investors who purchase with expectations of bond market returns in a portfolio (not equity despite having the S&P price index plastered on the material)
-more affluent investors that can benefit from tax deferral in working years with excess non qualified savings they earmark for retirement

Generic advice on the internet can be useful but I don't think anyone should completely rule out a tool in a toolbox for someone if they know how to use it; last I checked they still rent power washers and heavy equipment at Home Depot and no one is on this forum warning of the harm of using a commercial power washer from Homer's. Then again they're not marketed as a guaranteed return investment! :sharebeer
So in that scenario, why use an EIA instead of a traditional deferred annuity?
senex
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by senex »

Welcome, Fredbogle1.

In addition to the above comments, please read FINRA's alert before investing: https://www.finra.org/investors/alerts/ ... lex-choice (the link in Mel's article in broken).

FINRA is the self-regulatory organization for brokers. They rarely issue "alerts" for quality products sold by their members. If you browse their alerts, you see things like "Broker Imposter Scams," or "Fake Check Scams," or "Binary Options Follow-up Schemes." That is not good company.

In addition to the complexity and high hidden fees, annuities convert dividends and cap gains (which get preferential tax treatment) into ordinary income (which doesn't). They are also one of the few items that don't receive step-up basis when you die.

They are heavily promoted by salesmen because of the large commissions.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Oicuryy »

The interest crediting formula seems simple enough. Subtract the value of the S&P 500 price index on the first day of the contract from its value on the same day six years later. Divide the result by the first value and express that result as a percentage.

If the percentage is greater than 150% the annuity return is 150%. If the percentage is between 0% and 150% the annuity return is the percentage. If the percentage is between −20% and 0% the annuity return is 0%. If the percentage is less than −20% then the annuity return is the percentage plus 20 percentage points.

To backtest this I downloaded Yahoo's historical data since 2000 for the SP500 price and total return indexes. I applied the formula to the price index for each overlapping six year period. Then I divided the ending value of the annuity formula buy the ending value of an investment in the total return index. The result shows how much better the annuity would have done compared to a mutual fund that tracks the S&P 500 total return index.

Here is the graph of the results.

Image

Over most of this century so far the annuity would have returned 10%-12% less than the index fund. That is not too surprising. The total return index earns an additional roughly 2% per year from dividends that the price index doesn't.

But if the annuity had been purchased near the market highs in 2000 it would have outperformed the total return index. The S&P 500 is now at record highs. So who knows, maybe now is the time to bet on the index being much lower six years from now.

The usual disclaimers apply. Past performance does not guarantee future performance. I might be misreading the prospectus. I might have messed up the calculations. This post is for entertainment purposes only. Your mileage may vary.

Ron
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Stinky »

Oicuryy wrote: Wed Sep 02, 2020 11:54 am The interest crediting formula seems simple enough. Subtract the value of the S&P 500 price index on the first day of the contract from its value on the same day six years later. Divide the result by the first value and express that result as a percentage.

If the percentage is greater than 150% the annuity return is 150%. If the percentage is between 0% and 150% the annuity return is the percentage. If the percentage is between −20% and 0% the annuity return is 0%. If the percentage is less than −20% then the annuity return is the percentage plus 20 percentage points.

To backtest this I downloaded Yahoo's historical data since 2000 for the SP500 price and total return indexes. I applied the formula to the price index for each overlapping six year period. Then I divided the ending value of the annuity formula buy the ending value of an investment in the total return index. The result shows how much better the annuity would have done compared to a mutual fund that tracks the S&P 500 total return index.

Here is the graph of the results.

Image

Over most of this century so far the annuity would have returned 10%-12% less than the index fund. That is not too surprising. The total return index earns an additional roughly 2% per year from dividends that the price index doesn't.

But if the annuity had been purchased near the market highs in 2000 it would have outperformed the total return index. The S&P 500 is now at record highs. So who knows, maybe now is the time to bet on the index being much lower six years from now.

The usual disclaimers apply. Past performance does not guarantee future performance. I might be misreading the prospectus. I might have messed up the calculations. This post is for entertainment purposes only. Your mileage may vary.

Ron
So -

Most of the time you lose 10-12% compared to the market. And once every 20 years you MIGHT come out ahead.

Sounds like a product I wouldn’t buy.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Dottie57 »

whyamihere wrote: Wed Sep 02, 2020 6:30 am
Mel Lindauer wrote: Tue Sep 01, 2020 10:06 pm Here's a link to a Forbes column I did some time ago on these terrible products, It's titled "The Truth About Equity-Indexed Annuities".

https://www.forbes.com/2010/08/10/truth ... 35fdaa1257
Hi Mel,

In that article the white paper by McCann brings up a few points:
“Existing equity-indexed annuities are too complex for the industry’s sales force and its target investors to understand the investment.

–This complexity is designed into what is actually a quite simple investment product to allow the true cost of the product to be completely hidden.

–The high hidden costs in equity-indexed annuities are sufficient to pay extraordinary commissions to a sales force that is not disciplined by sales practice abuse deterrents found in the market for regulated securities.

– Unsophisticated investors will continue to be victimized by issuers of equity-indexed annuities until truthful disclosure and the absence of sales practice abuses is assured.”
Is it fair to assume that your opinion of the use of EIAs might be different for:
-no commission and no surrender charge annuities that are simplified
-investors who purchase with expectations of bond market returns in a portfolio (not equity despite having the S&P price index plastered on the material)
-more affluent investors that can benefit from tax deferral in working years with excess non qualified savings they earmark for retirement

Generic advice on the internet can be useful but I don't think anyone should completely rule out a tool in a toolbox for someone if they know how to use it; last I checked they still rent power washers and heavy equipment at Home Depot and no one is on this forum warning of the harm of using a commercial power washer from Homer's. Then again they're not marketed as a guaranteed return investment! :sharebeer
This is a not a generic group. There are many very knowledgable people, many of whom have already replied.

For my part, I think simplicity is a great goal. I would not purchase a blended product sold by a life insurance company. If you want growth, purchase mutual funds/etfs. If you want your own personal pension/paycheckfor pension income purchase a simple single premium immediate annuity or a single premium deferred annuity.

Don’t buy into the protection of losses. It comes at a large cost. The contracts I’ve seen that “protect” you from losses have a limit 10%, 20% or something else. Any loss greater than that is indeed your lose. In addition, you gains may be capped. My question is if market( your equities) go down 50% and the back up how much will you have? Kind of the scenario we have today. With the feb/march downturn and the recovery as of today.
whyamihere
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by whyamihere »

jaj2276 wrote: Wed Sep 02, 2020 6:52 am
whyamihere wrote: Wed Sep 02, 2020 6:15 am ...
Why are you here?
To correct the internet as best I can!
petulant wrote: Wed Sep 02, 2020 7:51 am
So in that scenario, why use an EIA instead of a traditional deferred annuity?
I think the deferred is better. An exception I ran into is the tax treatment of the i4Life rider on the Lincoln contracts (not the indexed version and not the commission version but don't get me wrong there are costs). With it you get the tax treatment of an immediate annuity (i.e. exclusion ratio) but you can invest in mutual funds (even versions of a few Vanguard index funds) and the returns are with dividends reinvested!

I'm here as a student of the game called life, with retirement being such a big boon to a person's free time why not try to correct people on the internet? I mean no offense and enjoy playing devil's advocate. I hope my posts and names make other people consider other members' points of view and discern for themselves.

I think one of the original patent holders for the EIA math said the math behind the EIA is actually simple and would be good for some conservative investors looking to get a long term average return between CDs and investment grade corporate bonds, but it's the costs of marketing/sales that makes it next to impossible to compare and find a needle (assuming you need a needle and know they are sharp). I was told that by an agent so take it with a grain of salt. Generally, I think these are marketed very misleadingly and that's unlikely to change.

MYGAs / deferred annuities on the other hand; straightforward and simple. There aren't huge costs to those like what Oicuryy posted.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by FiveK »

whyamihere wrote: Wed Sep 02, 2020 1:03 pm I think one of the original patent holders for the EIA math....
Didn't realize one could get a patent for this, but https://patentimages.storage.googleapis ... 0310A1.pdf says it's true. ;

Doesn't make it a good deal for the buyer, but of course that's not the point of the patent.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by capjak »

never mind
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Taylor Larimore
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Taylor Larimore »

FiveK wrote: Wed Sep 02, 2020 1:27 pm
whyamihere wrote: Wed Sep 02, 2020 1:03 pm I think one of the original patent holders for the EIA math....
Didn't realize one could get a patent for this, but https://patentimages.storage.googleapis ... 0310A1.pdf says it's true. ;

Doesn't make it a good deal for the buyer, but of course that's not the point of the patent.
FiveK;

Your link is an explanation of the most complicated money product that I have ever seen. Unbelievable!

In my opinion, and I was licensed to sell annuities, the only good annuity is a Single Premium Immediate Annuity (SPIA). These annuities are easily understandable (you give the company a one-time premium and they give you an income for life). I own two.

Thank you.
Taylor
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FiveK
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by FiveK »

Taylor Larimore wrote: Wed Sep 02, 2020 5:28 pm FiveK;

Your link is an explanation of the most complicated money product that I have ever seen. Unbelievable!

In my opinion, and I was licensed to sell annuities, the only good annuity is a Single Premium Immediate Annuity (SPIA). These annuities are easily understandable (you give the company a one-time premium and they give you an income for life). I own two.

Thank you.
Taylor
To be fair, it is a patent write-up. A good patent attorney can take a simple concept and write it with such an overly broad description that it covers much more than the original concept.

And yes, I was able to wade through part of it but eventually the eyes glazed over and....

I wonder if the patent grantees ever tried to enforce it against any of the major companies that sell these products?
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by whyamihere »

FiveK wrote: Wed Sep 02, 2020 5:50 pm
Taylor Larimore wrote: Wed Sep 02, 2020 5:28 pm FiveK;

Your link is an explanation of the most complicated money product that I have ever seen. Unbelievable!

In my opinion, and I was licensed to sell annuities, the only good annuity is a Single Premium Immediate Annuity (SPIA). These annuities are easily understandable (you give the company a one-time premium and they give you an income for life). I own two.

Thank you.
Taylor
To be fair, it is a patent write-up. A good patent attorney can take a simple concept and write it with such an overly broad description that it covers much more than the original concept.

And yes, I was able to wade through part of it but eventually the eyes glazed over and....

I wonder if the patent grantees ever tried to enforce it against any of the major companies that sell these products?
My understanding is that the grantees chose not to enforce the patent against anyone and allow insurance companies to use it freely. Given that the industry is regulated by state insurance commissioners, I think they may have had an overly optimistic or rosey view of how it would be marketer by carriers.

Mr. Larimore: isn't it ever! It's a mess of words and numbers. I'm in agreement with FiveK that it written in another language. The SPIA contracts I've read could be written on a napkin with no silver dollar words.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by jaj2276 »

whyamihere wrote: Wed Sep 02, 2020 1:03 pm
jaj2276 wrote: Wed Sep 02, 2020 6:52 am
whyamihere wrote: Wed Sep 02, 2020 6:15 am ...
Why are you here?
To correct the internet as best I can!
Ha, fantastic reply! Good luck, I wish you well on that endeavor.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Rob5TCP »

I see there was a post on this a couple of years ago

viewtopic.php?t=253085

Also - this is supposedly an unbiased review:
https://www.annuitygator.com/lincoln-na ... e-annuity/
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Stinky »

Rob5TCP wrote: Thu Sep 03, 2020 10:06 am I see there was a post on this a couple of years ago

viewtopic.php?t=253085

Also - this is supposedly an unbiased review:
https://www.annuitygator.com/lincoln-na ... e-annuity/
Thanks for posting the link to Annuity Gator. I hadn’t seen this site before.

It’s a pretty light-weight look at the product. Heavy on the fluff, light on the details.

In all candor, a non-knowledgeable consumer would get better information from the folks on this Forum than from Annuity Gator.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by David Jay »

Fred never came back (only 1 post as of today). Do you think he went ahead, believed his “advisor” and put his IRA money into an Equity Indexed Annuity?
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FiveK
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by FiveK »

David Jay wrote: Thu Sep 03, 2020 4:38 pm Fred never came back (only 1 post as of today). Do you think he went ahead, believed his “advisor” and put his IRA money into an Equity Indexed Annuity?
Maybe he is an "advisor"....
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Oicuryy
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Oicuryy »

David Jay wrote: Thu Sep 03, 2020 4:38 pm Fred never came back (only 1 post as of today). Do you think he went ahead, believed his “advisor” and put his IRA money into an Equity Indexed Annuity?
If I was a newcomer and my first post got all the flack his did, I wouldn't come back either.

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FiveK
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by FiveK »

Oicuryy wrote: Thu Sep 03, 2020 5:07 pm
David Jay wrote: Thu Sep 03, 2020 4:38 pm Fred never came back (only 1 post as of today). Do you think he went ahead, believed his “advisor” and put his IRA money into an Equity Indexed Annuity?
If I was a newcomer and my first post got all the flack his did, I wouldn't come back either.

Ron
One might think he would have at least come back to look at the responses but it appears he posted, immediately got out, and hasn't returned. Of course it's possible he has been following anonymously....
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Dandy »

Insurance companies burn the midnight oil to come up with features to lure customers to buy non basic annuities. They always make sure to get good compensation and minimize their risk. This often leads to such a complex product that it is hard for normal people to really understand -- including their agents.

If you need an annuity then when you are ready for monthly checks buy an immediate annuity. If you want some investment assets buy a mutual fund or three. Keep it simple and separate.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Carguy85 »

Isn’t there are significant risk of loss if an insurance company went under? My dad has given an insurance company pretty much all of his money for annuities. What happens if they were to go belly up???
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Stinky »

Carguy85 wrote: Fri Sep 04, 2020 7:11 am Isn’t there are significant risk of loss if an insurance company went under? My dad has given an insurance company pretty much all of his money for annuities. What happens if they were to go belly up???
There are state insurance guaranty funds that will substantially, and possibly fully, insulate your father from loss if his insurance company were to become insolvent.

Google "[your father's state of residence] life and health guaranty fund" to find the website for his guaranty fund. And please post back on the Forum, maybe in a separate thread, if you have questions.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by GuyInFL »

States have guarantee funds that are typically up to $250K.

https://www.annuity.org/annuities/regul ... ociations/
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Oicuryy »

Carguy85 wrote: Fri Sep 04, 2020 7:11 am Isn’t there are significant risk of loss if an insurance company went under? My dad has given an insurance company pretty much all of his money for annuities. What happens if they were to go belly up???
There is a risk. How significant it is is a matter of opinion.

The National Organization of Life & Health Insurance Guaranty Associations, NOLHGA, has a page that explains What Happens When an Insurance Company Fails

They also have a partial list of failed companies. Click on a company name to see what happened to its policies.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Carguy85 »

$250k is a small fraction of what he sent their way....I think the policies are underwritten by another insurance company...Cincinnati Life if I remember right. “Too big to fail” comes to mind... maybe I’m just a bit more of an untrusting person?
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Stinky »

Carguy85 wrote: Fri Sep 04, 2020 11:34 am $250k is a small fraction of what he sent their way....I think the policies are underwritten by another insurance company...Cincinnati Life if I remember right. “Too big to fail” comes to mind... maybe I’m just a bit more of an untrusting person?
Why don’t you find out a few more facts and post them. Especially the exact name of the company.

There is an insurance company called Cincinnati Life. I’m not familiar with them as a major annuity writer.
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Re: Lincoln Level Advantage Indexed Variable Annuity

Post by Rex66 »

States don’t actually have enough funds to protect to that limit which as mentioned above varies but is typically between 250 and 300k. They also don’t use tax payer dollars. They have the power/authority to take the remaining assets of the company going under, the small amount they have collected from insurance companies (which you pay for with policy purchase), and either further “tax” the companies viable in the state or transfer the policy to such companies to make you whole to that limit. This does take time and I think some in the countrywide debacle took years to be made whole although for me personally not getting access to my money for years would be considered a loss to some degree. Still it’s been pretty good historically as a backup but not perfect.
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