Lincoln’s Investor Advantage investment only variable annuity was one of the strongest of its kind on the market, and with the addition of “defined outcome funds,” it just got more appealing. With the success RILA contracts are seeing in terms of sales, annuity companies are starting to look for ways to introduce components of the RILA contract into other existing products, and that is exactly what Lincoln did in introducing their new Investor Advantage Pro series.

In addition to the 125+ investment options within Lincoln’s Investor Advantage contract, with the help of Milliman, Lincoln added three defined outcome funds and the birth of the Lincoln Investor Advantage Pro series was here. These three funds are a S&P 12% buffer fund, a S&P 22% buffer fund, and a Nasdaq-100 12% buffer fund.

Like RILA contracts, they have a cap and a buffer against losses, but unlike RILA contracts, Lincoln will introduce three new funds every four months, and you can move between them at any time like any other subaccount that you may be invested in. Why would you do this? The simple answer is to protect gains and give yourself opportunity for more growth.

Each defined outcome fund will run for one calendar year and have a corridor that it will operate within – this being a pre-determined cap at the time the fund is issued, and a 12% buffer from its starting point (there is also a 22% buffer option available). Every four months, a new defined outcome fund will be released. At any time, you can leave the defined outcome fund you are in with no consequences and go into a new one. You can also invest in a defined outcome fund at any time during its one-year term. However, if you do this, you go into the fund wherever it is at, but you are still operating off the original parameters.

For example, if you invested into the S&P 12% buffer fund with a pre-set cap of 14% (14% cap for illustration purposes only) that had been opened for five months and was up 4% to that point, you would only have a 10% growth opportunity left until you hit the 14% cap, and you would be subject to 4% losses before your 12% buffer protection would kick in. On the flip side, if the fund was down 4% when you exchanged into it, you would only have an 8% buffer left, but your cap would have essentially been increased by 4% because the fund was already down 4% when you exchanged into it. Last, if you were in this fund for a certain period of time and were up 10% and a new one opened that you exchanged into it right away, you would keep your 10% earnings (locking it in) and start fresh with a new predetermined cap and new buffer protection in the new fund.

This is a very brief overview of the new Investor Advantage Pro series and the new Defined Outcome Funds, so for a more detailed look, please see marketing material below and/or click on to view current funds, starting and remaining buffers and caps, and detailed information about each fund’s current Outcome Period.

dof brochure
Fact Sheet PRO BC
Investor Advantage PRO

Contact Micah Hesting for more information:
Business Development and Service Support Team Manager
Ext. 1130