Do Lincoln National Retirees Need Life Insurance?

More than 60% of Americans who feel 'very' or 'extremely' knowledgeable about life insurance are covered. However, less than 20% of those who say they lack knowledge about life insurance have life insurance. If you work for Lincoln National and are contemplating retirement, you must consider whether life insurance is a necessary asset for retirees. Prior to making any commitments, those who are interested in life insurance can receive free price quotes from their preferred insurer. Since 2010, the number of Americans who believe they do not have sufficient life insurance has more than doubled, despite the variety of options and ease of obtaining coverage. When deciding whether or not life insurance is necessary for retirement, the following factors must be considered by Lincoln National employees.

Financial Dependents:

Regardless of age or employment status, it is imperative for Lincoln National employees with financial dependents to protect them. In the case of a retiree with a spouse and children who depend on their retirement income, an active life insurance policy could be of great benefit. Nearly half (44%) of American households would experience significant financial difficulties within six months if they lost their primary wage earner. More than one-fourth (28%) would reach this point within one month. With a policy in place, the insured's dependents would not suffer economic hardship in the event of their demise; the income would continue to be received. 70% of Americans with life insurance indicate they would still feel financially secure in the event of the death of the primary wage earner. However, only about half of uninsured Americans indicate they would be financially secure in this situation. Moreover, despite the prevalence of life insurance, having a policy does not necessarily equate to adequate coverage. More than 100 million Americans are either underinsured or completely uninsured, according to estimates. Taking this into account, Lincoln National employees seeking coverage should then determine how much life insurance coverage is required. The answer to this question depends on your standard of living, your monthly contributions, and your overall financial situation. The ideal situation would be to have sufficient life insurance to replace lost income due to death. Despite this, Lincoln National employees must recognize that purchasing insurance extending beyond this scenario is an option, making you responsible for determining which coverage meets their needs.

Outstanding Debt:

The purchase of life insurance should be a top priority for Lincoln National employees with outstanding debt transferable to beneficiaries upon death. Approximately 40% of Americans will leave a financial burden to a loved one upon their passing. In the event of your untimely demise, life insurance would relieve your beneficiaries of their financial obligations. For instance, if you have a mortgage loan, you would want to purchase a policy that allows you to pay off your debt. If you owe $100,000 on your home and cannot pay it off with your income, you may wish to purchase coverage at least equal to that amount. By doing so, Lincoln National employees can ensure that their families will not be responsible for the mortgage balance in the event of their death.

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Savings:

Life insurance may serve as a supplement for Lincoln National employees who have not amassed a sizable inheritance fund for their beneficiaries. The option to purchase a policy worth hundreds of thousands of dollars for less than $100 per month may appear attractive given that savings are not limited to cash account balances. Before purchasing insurance, Lincoln National employees should conduct research on the benefits, limitations, and price ranges to avoid overpaying and being understaffed.

The answer to whether or not insurance is necessary for Lincoln National employees varies on an individual basis. If you have dependents and beneficiaries, applying for life insurance can provide a source of income for them after your death. Purchasing life insurance would relieve your loved ones of financial obligations that would have otherwise been passed on if you are indebted. In the event that you are unable to amass a sizable nest egg for your heirs, a life insurance policy could be an effective alternative. Whether they purchase coverage or not, Lincoln National employees who are uncertain about a decision may benefit from seeking professional financial advice. By contacting The Retirement Group, you can receive a free cash flow analysis that will assist you in determining which option best meets your requirements.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Lincoln National offers a comprehensive retirement package, including a pension plan and the LNC Employees' 401(k) Savings Plan. The pension plan, also known as a defined benefit plan, provides employees with a guaranteed retirement income based on their years of service and salary. The exact formula for the pension plan includes a specific percentage of the final average salary multiplied by the number of years of service. The minimum service requirement is typically five years, and the pension benefits become fully vested at this point. Employees must meet certain age qualifications, generally beginning at age 55 with early retirement options. The 401(k) Savings Plan, also referred to as a defined contribution plan, allows employees to contribute a portion of their pre-tax salary. Lincoln National matches these contributions up to a certain percentage. In 2022, 2023, and 2024, Lincoln enhanced its 401(k) offerings by providing more investment options and improved online tools to help employees manage their retirement savings. Employees become eligible for the 401(k) plan after completing one year of service and reaching age 21. The LNC Employees' 401(k) Savings Plan is notable for its flexibility, allowing participants to make both pre-tax and Roth contributions (lincolnfinancial) (Business Wire).

Lincoln National Corporation has experienced significant restructuring efforts in 2023 and 2024, including layoffs and changes to its workforce. In early 2024, the company announced a 5% reduction in its workforce, impacting employees across various segments. These layoffs are part of a broader strategic realignment aimed at addressing the company's financial difficulties, which have been compounded by external pressures such as inflation, regulatory changes, and market volatility. Additionally, Lincoln National saw a substantial financial loss in the fourth quarter of 2023, reporting a net loss of $1.2 billion. This loss led to further emphasis on cost-cutting measures, including benefit restructuring, workforce reductions, and pension adjustments (S&P Global) (AM Best).

For Lincoln National, both employee stock options and Restricted Stock Units (RSUs) are made available as part of their equity compensation plans to incentivize and retain key employees. Lincoln National offers RSUs to employees, with vesting schedules that typically follow a multi-year plan, often with a cliff period followed by gradual vesting. This aligns with common industry practices, where RSUs are granted without an upfront purchase requirement, and they are taxed as ordinary income when they vest (Zajac Group) (Facet). RSUs at Lincoln National are distributed based on performance and employment status, with eligibility generally extending to full-time employees, directors, and some high-level contractors (MarketBeat). In addition to RSUs, Lincoln National also offers Non-Qualified Stock Options (NQSOs). These stock options provide employees the right to purchase company shares at a fixed strike price, with taxation occurring when the options are exercised and based on the difference between the exercise price and the fair market value (Facet) (Brooklyn Fi). Stock options are generally awarded to senior employees, allowing them to benefit from any increase in Lincoln National’s stock price over time.

Lincoln National offers a robust set of healthcare benefits for its employees, which has seen significant updates over the past few years. In 2023, Lincoln National continued to provide comprehensive health coverage, including medical, dental, and vision insurance, through various plan options. The company places particular emphasis on preventive care, with terms such as “Health Savings Account (HSA),” “Preferred Provider Organization (PPO),” and “Flexible Spending Account (FSA)” frequently used in their communications (lincolnfinancial). Additionally, Lincoln National promotes its Employee Assistance Program (EAP), which offers confidential support for both personal and professional challenges. With healthcare costs rising by approximately 5.4% in 2024, Lincoln National, like many employers, has been working to contain expenses while still offering high-quality healthcare options (Mercer | Welcome to brighter) (Mercer | Welcome to brighter). The importance of Lincoln National’s healthcare benefits cannot be overstated, especially given the current economic and political environment. Rising inflation and healthcare costs have pressured employers to reevaluate their healthcare strategies. Lincoln National’s focus on maintaining affordable care options, despite these challenges, highlights its commitment to employee well-being. This approach is crucial for retaining talent and managing healthcare costs effectively in a turbulent economic landscape, where investments in employee health contribute to long-term organizational success. The company's proactive stance in managing healthcare benefit expenses is a strategic response to both economic pressures and evolving healthcare legislation (lincolnfinancial) (Mercer | Welcome to brighter).