Lincoln may get more defensive with MoneyGuard hybrid

Lincoln National Corp. may raise fees and change its benefits on its popular MoneyGuard Reserve product, a combination of universal life insurance and long-term-care benefits. The insurer is weighing the possibility of making changes to MoneyGuard in light of low interest rates, according to Edward Dunn, a spokesman for Lincoln. Such changes, which could include raising fees, reducing benefits and changing commissions to advisers, would take place in the first half of next year. Low interest rates have hampered insurers for some time, as the companies make money from investment income and have been generating lower reinvestment yields. Traditional universal life and long-term-care insurance both depend heavily on interest rates. Carriers guarantee that UL policies will grow at a certain interest rate, while insurers use some of the yield they get from fixed-income investments to pay out LTC insurance benefits. The possible product changes follow on the heels of benefit reductions Lincoln made for new business only as of Oct. 1. That change cut back on benefits by 9% to 10% for purchasers between 30 and 67. Benefit cuts on new purchases ranged from 11% to 15% for buyers between 68 and 75, and were as high as 16% to 17% for customers between 76 and 80.