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Lincoln National (LNC) Collaborates to Address Retirement Needs

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Lincoln National Corporation (LNC - Free Report) recently introduced a defined contribution solution named Income America 5ForLife in a bid to provide a guaranteed monthly retirement income to its plan participants.

Notably, the new solution has been devised by Lincoln National in collaboration with other well-established retirement firms including American Century Investments, Nationwide, Prime Capital Investment Advisors and Wilshire, among others. Based on the sound pricing capabilities of these retirement firms, Income America will be a cost-effective one.

While the solution can be availed as a traditional series of target date portfolios in the form of Income America, the same can be utilized as a companion series of target date portfolios integrated with an in-plan Guaranteed Lifetime Withdrawal Benefit (GLWB) named Income America 5ForLife. Having said that, both the series can be put to use as the Qualified Default Investment Alternative (QDIA) of a plan. The liquid nature of the new solution also enables plan participants to withdraw the Income America account balance from their selected series at any time without incurring any penalty charges.

The latest solution will provide relief to retirement plan participants, who would place their accumulated retirement assets in the same, as they will be entitled to get an assured monthly source of income in return post retirement. Notably, per the 2020 Retirement Plan Participant study conducted by American Century Investments, over 80% of participants, if given with an income option, were keen to place their assets in their retirement plan.   

It has to be noted that Lincoln National has consistently undertaken initiatives to address the retirement goals of the company’s plan participants. These endeavors have been ramped up further with the ongoing COVID-19 pandemic, which induced financial insecurities worldwide. Markets have remained volatile since the onset of the outbreak, which heightened the need of offering protection to savings of Americans. Therefore, Income America seems to be a well-timed move on the part of Lincoln National, as for Americans, their workplace retirement plan leading to a secured financial future seems to be the need of the hour.

The fact has been further substantiated by a survey conducted by Lincoln National last year, which highlighted the lucrativeness for products offering guaranteed retirement income. Per the survey, over seven in 10 workers were not only eager to use such products but also felt that these products are likely to boost their confidence in saving for retirement.

Shares of Lincoln National have surged 42.2% in a year compared with the industry’s growth of 6.4%.

As a testament to the company’s constant efforts to meet retirement needs, Lincoln National has been launching variable universal life (VUL) insurance offerings from the beginning of this year with an added emphasis to include a long-term care (LTC) rider. Identified as yet another tool for meeting diversified financial goals, the notable VULs launched last month include Lincoln VUL and Lincoln Survivorship VUL (SVUL). It has also unveiled a variable universal life insurance policy named MoneyGuard Market Advantage in February 2021.

Apart from helping retirement plan participants to attain their retirement goals, back-to-back launching of solutions are likely to pave way for efficient performance of the Retirement Plan Services segment of Lincoln National in the days ahead. Notably, the segment has gained momentum from favorable returns stemming from the company’s alternative investment portfolio and growing account values emerging from strong equity market performance in fourth-quarter 2020. Also, an aging U.S. population and increased number of people attaining the retirement age accentuate the need for enhanced retirement plans.

Lincoln National currently has a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Some better-ranked stocks in the insurance space include Old Republic International Corporation (ORI - Free Report) , Sun Life Financial Inc. (SLF - Free Report) and James River Group Holdings, Ltd. (JRVR - Free Report) . While Old Republic sports a Zacks Rank #1 (Strong Buy), Sun Life and James River Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Old Republic, Sun Life and James River Group have a trailing four-quarter earnings surprise of 65.77%, 18.19% and 11.63%, on average, respectively.

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