What will we be going over in this annuity review?
In this review of the Lincoln National OptiBlend 5 fixed indexed annuity, we will be discussing the following concepts:
- Annuity type
- How this annuity works
- Fees and other potential drawbacks
- Where this annuity may or may not fit
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you are considering the purchase of an annuity because you would like to generate tax-deferred savings, along with the assurance that you will have an ongoing income stream during your retirement years, then the Lincoln National OptiBlend 5 annuity could be a good possibility for you.
However, before you commit to this product – or to any annuity – it is recommended that you take a closer look at how it works, and how it may or may not necessarily fit in with your specific financial needs and objectives (both now and in the future).
Throughout the past decade or so, fixed index annuities have become increasingly more popular. This is due in part to the fact that these financial vehicles can offer a guaranteed income stream during retirement. This, in turn, can give you the peace of mind in knowing that you won’t outlive your income, no matter how long you may live.
Fixed indexed annuities (or FIAs, as they are commonly referred) can also provide you with a “best of both worlds” scenario during their “accumulation” phase, as well. For example, these annuities track a given market index (or sometimes more than one index), such as the S&P 500. If the index performs well during a given period of time, the annuity will be credited with a positive return – usually up to a certain “cap,” or maximum.
However, if the underlying index performs poorly during a certain time frame, no losses are incurred in the annuity. Rather, the account value is just simply credited with a 0% return – which can still be a “win,” given that you don’t have to make up for any losses going forward, and the account can continue building on previous gains.
Because of the increased popularity of fixed index annuities, many insurance carriers are continuing to add new products to their proverbial “shelves”. Likewise, there are more financial and insurance advisors who offering fixed index annuities to their clients – but this is not necessarily a good thing.
One reason for this is because, even though financial advisors work hard to offer the best possible information for their clients, because fixed indexed annuity products are complex and have a lot of “moving parts”, even the insurance and financial advisors who sell them may not always be familiar with the intricate details about them.
In fact, some advisors are so fearful that they’ll be asked a question they can’t answer, they don’t even bother to offer fixed indexed annuities at all as a solution for clients’ objectives – even if this type of annuity could be just exactly what an individual or a couple is looking for.
In any case, though, because fixed indexed annuities – or for that matter, any annuities – can oftentimes require a large percentage of your savings, you really need to know how the product will work, because if you change your mind later on and want to get out of it, you will find yourself paying a pretty hefty surrender penalty.
Annuity and Retirement Income Planning Information that You Can Trust
If this is your very first visit to our website, please allow us to officially welcome you here to Annuity Gator. We are a team of financial and retirement income specialists who are focused on providing comprehensive, yet unbiased, annuity reviews. We’ve been doing this for quite a while now – and far longer than our competitors have – and because of that, we’ve come to be a highly trusted source of annuity information on the Internet.
When looking for details about annuities online, it’s possible that you have run across a lot of conflicting opinions about them. This, however, is not all that surprising to us. That’s because there are many different annuity products available today, and many people – both consumers and financial advisors alike – will oftentimes have differing thoughts.
It could also be that you have attended an annuity seminar in the past where, in return for a “free” lunch or dinner, the presenter provided you with a great deal of information about the Lincoln National OptiBlend 5 fixed index annuity, or some other similar product.
You may have even set a follow-up meeting with the seminar presenter, which in turn, has led you here to the Internet – and thus, to our website – in search of more detailed information about this (and/or other annuities).
Yet, even though there are a number of decent websites online that provide information about annuities, there are some other sites that will work hard at “luring” you in by making some pretty bold claims about annuities like the following:
- Lowest fees
- Highest income payouts
- Guaranteed lifetime income
- Top-rated companies
Does this happen to look familiar?
It’s certainly easy to see why these claims are so enticing. But the problem is, they aren’t necessarily true! In fact, they are often based on “what ifs,” rather than on hard evidence. And we all know that “hope” is not a strategy – especially when you’re planning your retirement income.
This is where the Annuity Gator comes in.
In our massive annuity review database, you will find the whole gamut of information about fixed, fixed indexed, variable, MYGA, and a whole host of other specific annuities.
This includes information regarding the good features, as well as the not-so-good. And, while discussing annuity drawbacks might end up turning some people away from these products, it is much better to know “the whole story” up-front, rather than making an expensive (and long term) mistake with your retirement savings.
In fact, we would much rather see people shop for a little bit longer to find the financial product(s) that works best for them, rather than jumping in and getting the wrong thing – and then oftentimes having to pay a hefty “surrender” penalty to get out of it.
In order to be perfectly clear, here, we do want to state that we like annuities very much here at Annuity Gator. In fact, these products can provide some wonderful benefits – but this is really only the case if the product actually fits in with your specific financial goals.
The review that you are in the process of reading right now was created with the intent of assisting you with better understanding all of the “fine print” that is associated with the Lincoln Life OptiBlend 5 Fixed Index Annuity.
So, if you’re ready to get started, let’s go ahead and dive in!
The Lincoln National OptiBlend 5 Fixed Index Annuity at a Glance
|Product Name||OptiBlend 5|
|Issuer||Lincoln National Life Insurance Company|
|Type of Annuity||Fixed Indexed Annuity|
|A.M. Best Rating||A+|
|Phone Number||(877) 275-5462|
Opening Thoughts on the Lincoln National OptiBlend 5 Annuity
Lincoln Financial Group was originally founded in 1905, with the endorsement of Abraham Lincoln’s son, Robert Todd Lincoln. For more than 115 years, Lincoln has stuck with honest values and dependable service so its clients can better achieve their short- and long-term wealth enhancement and protection goals.
Today, Lincoln National Corporation operates as the parent company for numerous affiliates, which includes Lincoln National Life Insurance Company. As of year-end 2019, Lincoln National was ranked as the fourth largest life and health insurer, with more than $16.4 billion in (2018) revenue.
The company has also achieved other accolades, too, including:
- #1 in variable universal life insurance sales
- #2 in universal life insurance sales
- #4 in term life insurance sales
- #1 in total life insurance sales
- #5 in 401(b) employer-sponsored retirement plan market assets
- #3 in healthcare segment assets
- #9 in 401(k) market assets
- #2 in variable annuity sales
- #6 in fixed indexed annuity sales
- #8 in total fixed annuity sales
- #3 in total annuity sales
- #5 in long-term disability
- #3 in short-term disability
- #7 in total employee-paid coverage
Due in large part to its financial strength and good reputation for paying out policyholders’ claims, Lincoln National Life Insurance Company has also earned some impressive financial strength ratings, including a(n):
- A+ from A.M. Best
- A+ from Fitch Ratings
- A1 from Moody’s Investor Service
- AA- from Standard & Poor’s
Due to the constant volatility of the stock market over the past several years, fixed index annuities have become extremely popular with investors as a way to both grow and protect principal, as well as to obtain an ongoing income in retirement. However, while these features may seem highly attractive at first glance, it is important that you look at the whole picture because there is typically some type of “tradeoff” required.
Before we get into the gritty details, here are some necessary legal disclosures..
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Neither Lincoln Financial Group nor Lincoln National Life Insurance Company has endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and / or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
For additional information on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How Lincoln Life Describes the OptiBlend 5 Fixed Indexed Annuity
Lincoln Financial Group describes the OptiBlend fixed indexed annuity as being a flexible premium annuity that can provide several features to help with meeting both accumulation and income needs.
The OptiBlend’s key features include:
- A fixed account that offers a set interest rate for one year
- Four indexed accounts that have the potential to earn interest that is tied to the performance of outside indices. These include the 1-Year Fidelity AIM Dividend Participation, the 1-Year S&P 500 5% Daily Risk Control Spread, the 1-Year S&P 500 Cap, and the 1-Year S&P 500 Participation index
- Optional benefits that provide protected income for life
- Varying surrender charge schedule. (Note that in addition to the OptiBlend 5, Lincoln also offers the OptiBlend 7 and OptiBlend 10, and the surrender charge times line up with the option that you choose)
This annuity offers some other bells and whistles, such as a nursing home and terminal illness benefits. These benefits can allow you to access your annuity contract value without incurring a surrender charge (even during the surrender charge period) if you meet the qualification criteria. (Also, these benefits may not be available in all states).
There is also a death benefit whereby, upon the death of the contract owner or annuitant, a named beneficiary (or multiple beneficiaries) may receive the greater of the contract value or the guaranteed surrender value.
For more of the details directly from Lincoln Financial, you can view the OptiBlend 5 annuity Fact Sheet HERE.
How a Financial or Insurance Advisor Might “Pitch” this Annuity to a Client
There is definitely a lot to like about the Lincoln Life OptiBlend 5 annuity – starting with its opportunity for growth, protection of principal, tax-deferred earnings, and future lifetime income payout.
With that in mind, it is possible that if you’ve been approached by an insurance or financial advisor about the OptiBlend 5 annuity from Lincoln, they keyed in on the exponential contract build-up, as well as the income stream that pays for as long as you need it – regardless of how long that may be.
Now, that’s all well and good. But, what an advisor might not be so apt to focus on is that fixed indexed annuities typically impose “caps,” or maximums, as well as other “limitations” on their growth. This is the “tradeoff” of sorts that is made by limiting the losses in a down market.
So, even if the underlying index(es) has an absolutely stellar year, the return that is credited to the annuity will be limited to whatever the cap is in a given time period. As an example, let’s say that the OptiBlend annuity has a 5% cap, and the underlying index that is being tracked has a 15% return during that given time period. In this case, the return in the account would be capped at just 5%.
On the other hand, if the underlying index had a horrible year, and it returned a loss of 20%, the OptiBlend annuity’s account would incur a return of 0% – and this is a lot nicer than a negative 20%.
You can check out all of the features of the Lincoln OptiBlend 5 annuity by viewing the Facts at a Glance HERE.
What About Any Fees on the Lincoln OptiBlend 5 Annuity?
As with other financial products, there are some fees you need to be mindful of with the Lincoln Life OptiBlend 5 fixed indexed annuity. One biggie is the potential surrender fee you may incur if you make a withdrawal of more than 10% of the contract’s value over the first five full contract years. In this case, the surrender penalty in Year 1 and Year 2 is 9%, then it gradually decreases until after Year 5.
Lincoln OptiBlend 5 Annuity Surrender Charge Schedule
In addition, if you access more than the 10% annual free withdrawal before the end of the surrender charge period, it may also be subject to a market value adjustment, or MVA. The MVA could be either a positive or a negative adjustment, based on the current interest rate environment at the time of the surrender.
Plus, if you are under the age of 59 ½ when you make a withdrawal, you could also incur – in addition to the other charges (and taxes) – an additional 10% “early withdrawal” penalty from the IRS. With that in mind, it is important to note that the purchase of an annuity is always a long-term financial commitment.
The Annuity Gator’s End Take on the Lincoln Life OptiBlend 5 Fixed Index Annuity
Where it works best:
This particular annuity will usually work the best for those who are looking for:
- Safety of principal
- The opportunity for index-linked growth
- Guaranteed lifetime income in retirement
Where it works the worst:
The OptiBlend 5 Annuity from Lincoln Life Insurance Company may not be an ideal fit for you if you:
- Need access to most or all of your money within the first several contract years – in this case, 5 years
- Do not intend to use the lifetime income feature of the annuity
In order to truly get an idea of whether or not a fixed indexed annuity such as the Lincoln OptiBlend 5 or similar product is right for you, click here so that you can access our free annuity buyer’s report.
There is a long list of criteria that should be considered when you are thinking about the purchase of an annuity. One of the primary reasons for that is because these products could require that you plunk down a large amount of your overall retirement savings. So, you definitely want to know that you’re making the right choice.
In any case, an annuity should always be considered as a long-term financial decision – and because of that, it is truly important that you are confident about how the product may or may not fit in with your specific financial goals.
When you are considering a fixed indexed annuity, you can be comfortable in that your principal will be safe from market fluctuations, as well as in that you can set it up to provide you with an ongoing retirement income in the future. Given that, you can also attain the security that you won’t run out of income during retirement.
In the case of the Lincoln Life OptiBlend 5 Fixed Index Annuity, there can definitely be some great benefits. But that being said, this particular annuity could also fall somewhat short, and quite frankly, there may be some better options that are out there for you – primarily if you are in search of guaranteed lifetime income, along with the opportunity for growth.
Do You Have Any Additional Questions on the Lincoln Financial OptiBlend 5 Fixed Index Annuity? Did You Find Any Mistakes in this Annuity Review?
We understand that this annuity review went a tad bit long, so we definitely appreciate you sticking with us thus far. However, in this regard, we would much rather that you have “too much” information on this product than to not have enough. So, if you found this annuity review to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it.
We also know that, just as with other financial products and services, the information about annuities can change quite frequently. So, if you happened to notice any information in this annuity review that may need to be updated or revised, then please let us know that, too, and we will be happy to make any of the needed updates.
Are there any other annuities that you would like us to review?
If so, great! Just give us the name of the annuity (or annuities), and our team of highly trained annuity experts will get to it as quickly as we possibly can.
The Annuity Gator
P.S. If you would like to read more of our Lincoln annuity reviews here are some links to check out:
- Independent Review of the Lincoln National Life Level Advantage Advisory Indexed Variable Annuity.
- Independent Review of the Lincoln Financial Deferred Income Solutions Advisory Annuity.
- Independent Review of the Lincoln Life Insurance Company’s Level Advantage B Share Annuity.
- Independent Review of the Lincoln National Investor Advantage Fee-Based Variable Annuity.
- Independent Lincoln ChoicePlus Assurance Variable Annuity Review – [February 2020 Update].
- Independent Review of the Lincoln National Life ChoicePlus Assurance Fee Based Variable Annuity.
- Independent Review of the Lincoln Financial Insured Income Advisory Annuity.
- Independent Review of the Lincoln Financial MYGuarantee Plus Fixed Deferred Annuity.
- Independent Review of the Lincoln Financial Lifetime Income Edge Fixed Index Annuity.
- Independent Review of the Lincoln National Life Core Income Built with iShares Variable Annuity.
- Independent Review of the Lincoln Financial Group Impact Advantage Fixed Indexed Annuity.
- Independent Review of the Lincoln National Covered Choice 5 Annuity.
- Independent Review of the Lincoln National Lincoln OptiChoice Fixed Index Annuity.
- Independent Review of the Lincoln National Life Lincoln Core Capital Annuity.