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 Lincoln National spokesman.

FIRST-HALF CHANGES

Such changes, which could include raising fees, reducing benefits and changing commissions to financial advisers, would take place in the first half of next year. Low interest rates have been hampering insurers for some time as the companies must make money from investment income but are hurt by lower reinvestment yields. Traditional UL and LTC insurance depend heavily on interest rates. Insurers guarantee that UL policies will grow at a certain interest rate, while insurers use some of the yield that they get from fixed-income investments to pay out LTC insurance benefits. The possible product changes follow on the heels of benefit reductions that Lincoln National made for new business 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. Email Darla Mercado at dmercado@investmentnews.com