Independent Review of the Lincoln National Life Core Income Built with iShares Variable Annuity
What is covered in this annuity review?
In this annuity review, we will be going over the following details regarding the Lincoln National Life Core Income Variable Annuity Built with iShares:
- Product Type
- Current rates
- Realistic long-term return expectations
- How this annuity is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
For anyone who is in the process of considering an annuity, the inner workings of the product may seem a bit overwhelming. One reason for this is because annuities have a number of complex “moving parts.” And, depending on the type of annuity you purchase – along with any of the other optional riders that may be added – you could find yourself having to wade through a confusing maze of small print in order to determine just exactly how the product works.
Unfortunately, many investors forgo working though all of the details and instead relying on their current insurance or financial advisor to lead them to the proper financial vehicle. Unfortunately, though, this may not necessarily work to your advantage when considering a variable annuity.
This is because, unless your advisor has a key focus on annuities, he or she may not be able to provide you with all of the insight that you may need – and in turn, many investors end up finding out too late that the annuity they chose is not going to perform the way they expected it to.
If you have been thinking about moving forward with the Lincoln Life Core Income annuity Built with iShares, then you may have noticed that, just like any other annuity, it can perform well in certain areas. However, there are other areas where it may not perform up to par – especially depending on your specific financial situation and goals.
We can help you to sort out what you need to know about the Core Income annuity from Lincoln National, and in turn, allow you to reach a better conclusion as to whether or not this is the right annuity product for you.
Annuity and Retirement Income Planning Information You Can Trust
If you have not been to our website in the past, then allow us to personally welcome you here to AnnuityGator.com. We are a team of annuity experts who are highly focused on offering in-depth, yet non-biased, annuity reviews. We have been doing this for quite some time now – much longer than our competitors – and because of that, we have come to be a trusted source of annuity information.
If you have been looking for details about annuities via the Internet, then it is probable that you have run across a lot of very conflicting opinions about them. This, however, is not really all that surprising. That is because there are many different annuity products available, and many people – both consumers and financial advisors alike – will often have differing thoughts.
You might recently have attended an annuity seminar where the presenter went over various details about the Lincoln National Life Core Income annuity (or some other similar annuity product). If so, and if you set a time to follow up with the presenter about this product, you may even be on our website right now in search of more information about it before you commit to moving forward.
In your quest for these details, you have more than likely run across other websites that tout various annuity products. But, while there are some very good websites out there that provide this type of information, a lot of them are really only after your contact information – and they tend to lure people in by making some pretty bold claims about the annuities they offer, such as:
- Lowest fees
- Highest income payouts
- Guaranteed lifetime income
- Top-rated companies
But, as enticing as these clams might sound, it makes it even more important for you to verify that they are actually true before you commit to placing a large chunk of your retirement savings into such a product.
That’s where we come in.
If you have landed on our website seeking more details on the Lincoln National Core Income annuity built with iShares, then you are certainly in the right place. In fact, dare we say that this is the only place online where you will find the good, the bad, and yes even the ugly details about this annuity. That’s because we feel that knowing the entire picture is really the only way to make a well-informed decision as to whether or not the annuity will be right for you.
If you’ve done any amount of investing in the past, you may notice that insurance and financial advisors will often tend to happily give you all of a product’s benefits, yet will simply gloss over the disadvantages – if they even discuss them at all.
For instance, when it comes to variable annuities, these products allow you a way to obtain a higher return than that of a fixed annuity – and you can also do so without having to pay tax on your gains each year (until the time you make withdrawals). However, because there are also certain costs and risks that are involved with variable annuities, you really need to know exactly what you’re getting into, and what to expect, before moving forward.
In order to be perfectly clear here, we do feel that annuities can provide investors with some very nice benefits. However, this is only the case if the product fits in with your specific short- and long-term 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 National Core Income variable annuity Built with iShares.
So, if you are ready to begin, then let’s go ahead and dive in!
Lincoln National Life Core Income Built with iShares Variable Annuity at a Glance
|Product Name||Core Income Built with iShares|
|Issuer||Lincoln Financial Group|
|Type of Product||Variable Annuity|
|Phone Number||(800) 672-4822|
Opening Thoughts Regarding the Lincoln National Life Core Income Annuity Built with iShares
The Lincoln Financial Group was established back in 1905. Over the past 110+ years, Lincoln has grown into a well-respected financial and insurance provider. Lincoln Financial Group consists of several entities, including the following:
- Lincoln National Life Insurance Company (Fort Wayne, Indiana)
- Lincoln Life and Annuity Company of New York
- Lincoln Financial Distributors
- Lincoln Financial Advisors
- Lincoln Financial Securities Corporation
- Lincoln Financial Foundation
The company has been ranked highly among its peers, and it is also considered to be strong and stable from a financial standpoint. Because of that, as well as the company’s timeliness in paying out its policy holders’ claims, it has been provided with high ratings from the insurer ratings agencies, include a(n):
- AA- from S&P
- A1 from Moody’s
- A+ from Fitch
- A+ from A.M. Best Company
Overall, variable annuities are really only supposed to do two things. These are to grow principal, and to produce income. However, in reality, this type of annuity is not actually very good at producing income, primarily because of the risk that these vehicles present to the investor, as well as to the insurance company that offers them.
Over the years, investors who have had funds in the market have been worried about not meeting their retirement goals. This has been due in large part to the substantial volatility of the market, giving way to potential loss of investor principal.
Because a variable annuity’s value can fluctuate so much, an insurance carrier can really only guarantee a lesser amount of income than the “safer” annuity alternatives like fixed annuities. So in reality, for each and every dollar that you place into a variable annuity, it is only going to promise you less income than that of a fixed annuity would do…for the exact same money! Given that, if your primary goal for purchasing an annuity is to produce an income stream in retirement, then a variable annuity may not be the best choice for you.
On the investment side, a variable annuity can offer investors the opportunity of unlimited growth. But along with that also comes downside risk. There are also a number of fees. First, within a variable annuity, you are typically invested in mutual funds. These will generally have their own fees within the funds themselves. With the Lincoln National Life Core Income annuity Built with iShares, the product instead uses ETFs (exchange-traded funds). These financial vehicles, however, will also charge a fee.
In addition, a variable annuity itself, in most cases, will oftentimes require a front-end sales/commission charge – so an investor will immediately start off with a “loss.” This, in turn, can make it pretty difficult for the account to grow when it is already starting from behind. And then there is the uncertainty of the market. While the Core Income may not necessarily charge an up-front commission, there are other fees that are involved – and that can add up substantially over time.
Before we get into the gritty details, there are some required legal disclosures here…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Lincoln National Life has not 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 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 National Describes the Core Income Variable Annuity Built with iShares
Lincoln National describes the Core Income, built with iShares variable annuity as one that offers a guaranteed lifetime income, along with a cost-effective way of building up the account value.
When this particular annuity was initially introduced in early 2017, it was the industry’s first ETF-only variable annuity designed to help fee-based financial advisors address their clients’ retirement income challenges.
ETFs (Exchange Traded Funds) have helped to make investing more simplistic, as well as transparent and cost-effective for investors. And, as a result, their popularity has more than tripled over the past several years.
The Lincoln Core Income annuity is built exclusively with ETFs, which can allow investors who like the benefits of these financial vehicles to pair them with a variable annuity that also offers a guaranteed income for life.
Developed through a strategic collaboration with BlackRock, Lincoln Core Income Built with iShares features an investment section that is comprised entirely of ETFs, which can provide advisors and investors with a cost-effective strategy, and a guaranteed lifetime income that is equal to 4% of the initial deposit that also increases annually by a 2% cost of living adjustment.
Some of the other key features of this annuity include the following:
- No surrender charge
- Costs all below 1.9% (this reflects contract charges and investment option waivers)
- Return of investment death benefit
How a Financial Advisor Might “Pitch” this Annuity
Even though variable annuities aren’t nearly as popular as they were several years ago, this particular option provides some nice built-in features – including a set amount of lifetime income that increases over time. This can help to keep purchasing power more in check with the rising future prices of goods and services you’ll need in retirement.
With that in mind, financial advisors are likely to focus in on the fact that not only can you count on a certain amount of income, but you’ll also have the opportunity to take advantage upward moving market gains before you convert the annuity to an income stream.
However, even though all of this sounds really great, just like most other things in life, nothing is really ever free. This means that you’ll need to essentially endure some “trade-offs” in order to get these benefits.
For example, you’ll still need to contend with market risk. And, while the market has come back from its recession of 2008 returns, nothing is ever guaranteed, particularly when it comes to investing in equity related vehicles.
Also, there are still some charges and fees involved on this annuity – which in turn, can end up lowering your overall return, in some cases, to an amount that is lower than that of a regular fixed annuity (but also with all of the sleepless nights worrying about a potential market downturn).
What About the Fees on the Lincoln National Life Core Income Built with iShares?
Although there is generally no up-front sales commission on this annuity, you still need to watch for regular fees that are incurred – which can oftentimes add up to much more over time than just a one-time sales commission.
In the case of this annuity, you will find fees associated with the underlying investments, as well as with the Core Income itself. First, according to Lincoln Life, the average annual net expense ratio for open to new assets is 0.76%.
In fact, the company’s self-proclaimed “low cost/cost-effective” strategy is quote: “based on a comparison by Morningstar, as of May 31, 2017, between Lincoln iShares ETF’s portfolios which range in fees from 0.28% to 0.29% (as of January 31, 2017) and Morningstar VA sub-account universe open to new assets.”
Also, there is an annual charge of 1.60%, which includes the Guarantee of the Principal death benefit, 0.75%, and the rider charge of 0.85% (single or joint). In fact, the rider charge could go as high as 1.50%.
The Annuity Gator’s End Take on the Lincoln National Core Income Built with iShares Annuity
Where it works the best:
- For those who want the opportunity for higher, market / ETF related returns.
- For those who are seeking a lifetime income
- For those who want their lifetime income to increase over time to help increase their future purchasing power
Where it works the worst:
- For those who don’t want to endure market-related risk
- For those who do not plan to use the lifetime income feature
In analyzing any type of financial vehicle, it is important for investors to determine what their overall goals are. In some cases, for example, a product may appear to offer the “best of both worlds,” such as the opportunity for growth, along with a stream of lifetime income. Yet, it is essential when considering the product to also have a good understanding of what you may be giving up in order to attain such benefits.
In the case of the Lincoln National Core Income Variable Annuity Built with iShares, there are many good features, such as the diversification of investments, as well as the future income that increases over time.
However, there are also the tradeoffs that you need to consider – which include still being exposed to market risk, as well as the fees and charges that are involved in order to have such benefits.
With this in mind, the only way to truly know if this particular annuity will be a good fit for you is to have it tested. We offer this service for free – so just contact me and I will use the calculator from the video in order to provide you with a better illustration of what this annuity could return for you.
Have Any Additional Questions on the Lincoln National Life Core Income Variable Annuity Built with iShares? See any Mistakes?
If you have any additional questions regarding the Lincoln National Life Core Income variable annuity Built with iShares, or if you see any information that doesn’t look quite right, please contact us.
We realize that this annuity review went a bit on the long side – and for that, we thank you for sticking with us through to the end here. But, it is our thought that providing “too much” information on an annuity is far better than not providing enough – particularly when someone is trying to make a decision that can have life-long financial ramifications.
Given that, if you did benefit from the information in this review, then please do feel free to share it by forwarding it on to anyone whom you know that may also benefit from it. We are always happy to help others in determining whether or not a particular annuity may be right for them.
Also, if you happened to notice anything in this review that may be outdated or in need of revision, please let us know that, too and we will make the necessary updates as soon as possible.
Are there any other annuities that you would like to have us review?
If so, let us know the name of the annuity (or annuities, if there is more than just one), and our team of annuity geeks will get on it!
The Annuity Gator