Introducing Lincoln OptiChoice NY

Lincoln is pleased to introduce Lincoln OptiChoice NY, Lincoln's first fixed indexed annuity product for New York clients. Be sure to check your selling agreement for availability.

Lincoln OptiChoice NY contracts will be issued beginning March 1, 2012. Applications will be accepted beginning February 23, 2012.

Product highlights include:

• Lincoln OptiChoice NY will offer a one year Fixed Account and a variation of the Performance Triggered Indexed account.
• This is a flexible premium annuity, with minimum premium requirements of $5,000 (nonqualified) and $2,000 (qualified).
  • Subsequent premiums are allowed, subject to a minimum of $50 and a maximum of $25,000 per contract year.
• There are three product versions available, determined by the length of the surrender charge period:
  • Lincoln OptiChoice NY 5 with a 5-year surrender charge period (maximum issue age 85),
  • Lincoln OptiChoice NY 7 with a 7-year surrender charge period (maximum issue age 85), and
  • Lincoln OptiChoice NY 9 with a 9-year surrender charge period (maximum issue age 80).
• There is no market value adjustment.

Interest Account Information

Interest rates

Interest rates will be available February 23, 2012 for the March 1st timeframe. Two sets of interest rates will be published for each surrender charge period: one for premiums less than $100,000, and one set for premiums of $100,000 or more. Rates will be published for:

• Fixed Account
• Performance Triggered Account (base indexed interest rate and the specified rate)

No interest will be earned until the contract is issued.

Rate Hold

To "lock-in" the fixed interest rate and specified rate before a rate change, refer to the Lincoln OptiChoice NY

Rate Lock Procedures (Form AN10220). In general:

• For "Cash with Application" business, if the cash is received in Annuity New Business before the end of the 7-calendar day rate hold period and the paperwork is in good order, the contract's rates will be the better of:
  • The rates assigned at the beginning of the 7-calendar day rate hold period, or
  • The then-current ("new money") rates.
• For eligible transfer business, if the transfer money is received in Annuity New Business before the end of the last business day of the 75-day rate hold period, the contract's interest rate will be the interest rate assigned at the beginning of the 75-day rate hold period.
  

(Note: the rate lock procedures are different for contracts issued in other states).

Interest Accounts

• Fixed Account - The Fixed Account offers a fixed interest rate that is guaranteed for one year, and is credited and compounded daily.

The guaranteed minimum interest rate for the Fixed Account will be between 1% and 3%, will be declared at issue, and will remain in effect for the length of the surrender charge period.

• Performance Triggered Indexed Account - The Performance Triggered Indexed Account will consist of two interest crediting methods:
  • A base indexed interest rate that will be credited daily. This is a fixed interest rate that is guaranteed for one year and will be between 1% and 3%. Note: This amount is credited to the account regardless of the performance of the S&P 500 Index Value; clients are assured of earning a minimum rate of return on dollars allocated to the Performance Triggered Account.
  • The indexed credit percentage that is determined by the specified rate. The indexed credit percentage may be credited at the end of the indexed term, depending on the performance of the S&P 500 Index Value.
    • If the ending S&P 500 Index Value is the same or greater than the beginning S&P 500 Index Value, the account will be credited with the specified rate at the end of the 1-year indexed term.
    • If the ending S&P 500 Index Value is less than the beginning S&P 500 Index Value, the indexed credit percentage will be zero.
    • During times of extremely low interest rates, the declared specified rate may be set at zero.

New Business Forms

Applications (Form ANF07280-60DF) and Supplements (Form AN07263NY), as well as the Lincoln OptiChoice NY Disclosure Statement (Form AN10112-60), are available online from the Lincoln Forms Tool.

Applications will be accepted beginning February 23, 2012. No interest will be earned until the contract is issued.

Websites

Producer websites will have more information available on or about February 23, 2012. The Lincoln OptiChoice section of the website will include the marketing material, specimen contracts, reference materials, rates and product specifications.

The client website (www.lincolnfinancial.com) will be updated at the same time.

Additional Riders

Lincoln OptiChoice NY includes riders that waive the surrender charge in the event of a nursing home confinement or terminal illness. Refer to the riders for specific provisions.

Note: The Lincoln Lifetime Income Edge Rider is not available with New York contracts.

New York Reminders

Reg 60 - New York requires that the "Definition of Replacement" form be completed and signed for all potential business written in New York. If a replacement of an annuity contract or life insurance policy is involved, the
representative must follow additional disclosure procedures.

• Annuity Instructions For Completing Regulation 60 Forms (Form 29607ANY) provides more information on the Reg 60 process and is available online from the Lincoln Forms Tool.

Reg 194 - Regulation 194 (Producer Compensation Transparency) requires all producers licensed in New York to provide compensation disclosure to purchasers of insurance and annuity products issued in the state.

Producers should consult with their firm of affiliation to determine if they require any specific forms or procedures related to this regulation.