Lincoln unwraps a new annuity

Lincoln National Corp. is rolling out its first deferred-income annuity, jumping into a small but rapidly growing product category. The insurer, which already has a major presence as a seller of variable and indexed annuities, has launched Lincoln Deferred Income Solutions, which permits clients to pay for a stream of income that they will receive years after the transaction. With Lincoln's new annuity, clients will learn at the outset exactly how much money they will be getting. That income stream won't change over the course of the contract. Deferred-income annuities are a growing part of the annuity market. Year-to-date through June 30, sales reached just $930 million, a drop in the bucket compared with the $34.5 billion in total fixed-annuity sales during the same period but up 151% from the $370 million sold in the first six months of 2012, according to LIMRA. Two common adviser and client objections to deferred-income annuities are the fact that clients have no liquidity once they hand their money to the insurer and that heirs will collect nothing once the client dies. Lincoln hopes to address the liquidity concern by giving clients the flexibility to receive six months of payments in one shot to help fund medical expenses if the customer is in a crunch. The insurer also offers a death benefit that can kick in regardless of whether the client dies during the deferral or income phase.