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Lincoln National (LNC) Enhances Its Life Insurance Products

Lincoln National Corporation LNC recently launched life insurance products with emphasis on catering to the customers’ requirement of ‘living benefits.’

The new products are equipped to aid customers in not only planning for their retirement savings but also provide long-term care (LTC) expenses. The new launches are unlike the traditional life insurance products, which have been offering only death benefit protection.

Notably, an upgraded version of Lincoln WealthAccumulate indexed universal life insurance (IUL) policy is among the products launched by the company. This upgraded version is apt for clients keen on getting not only death benefit protection but are also looking to drive robust cash value growth. A new version of Lincoln WealthPreserve IUL offering has also been launched. It provides customers’ the opportunities to grow and protect their assets in addition to offering a guaranteed death benefit protection over longer time frame.

The company has also come up with a new LTC rider, which can currently be availed on specific Lincoln Variable Universal Life policies. It’s worth mentioning that the same rider can be attached to the customers’ life insurance policies at the time of issue and at an added cost. In addition to the death benefit protection offered, the rider intends to reimburse the long-term care expenses of clients, incurred while getting care in a facility or at home.

Shares of this Zacks Rank #4 (Sell) life insurer have lost 26.2% in a year compared with the industry’s decline of 14.7%.

Moreover, the latest product launches of Lincoln National seem to be time opportune as the volatilities induced by the COVID-19 pandemic have necessitated the re-evaluation of policies by life insurance providers. Though death benefits continue to favor purchasing of life insurance policies, most consumers have intensified focus on policies with living benefits so that they can avail them while alive.

Also, the company has opted for digitization of the life insurance purchase process, which has made it increasingly convenient for customers to purchase policies from the comfort of their homes. This, in turn, has also led to uptick in life insurance policies purchased.

Growing Life Insurance Business

The company’s Life Insurance business has been performing well as evident from consistent revenue growth since 2010 (except in 2016). Though elevated mortality claims stemming from the COVID-19 pandemic has somewhat affected the third-quarter bottom line of this business, higher returns on alternative investment portfolio have partially offset the same.

Lincoln National has been altering its sales mix to focus on sale without long-term guarantees. Therefore, the proportion of sales with long-term guarantee in its Life Insurance segment has been diminishing over the years.

It’s worth mentioning that Lincoln National has been able to achieve more than 80% of total sales without a long-term guarantee on the back of repricing actions and this trend is likely to continue in the days ahead.

Also, the life insurance portfolio remains well diversified, which has in fact, lowered the risk profile of the company. Diversified life insurance sales and latest product enhancements are likely to position the company’s Life Insurance business well for growth.

Stocks to Consider

Some better-ranked stocks in the insurance space include Sun Life Financial Inc. SLF, Primerica, Inc. PRI and American Financial Group, Inc. AFG. While Sun Life sports a Zacks Rank #1 (Strong Buy), Primerica and American Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sun Life, Primerica and American Financial have a trailing four-quarter earnings surprise of 14.78%, 10.04% and 5.85%, on average, respectively.

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Lincoln National Corporation (LNC): Free Stock Analysis Report
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