Secure your retirement future Managing the financial risk of long-term care [Name] [Title] [Date] LCN /07

©2007 Lincoln National Corporation LCN MG /07 Protect your retirement income Few things matter more than your retirement assets Protect them against the challenges of long-term care

©2007 Lincoln National Corporation LCN MG /07 Managing assets in retirement Variable expenses Fixed expensesWealth transfer Healthcare expenses Emergency/opportunity funds

©2007 Lincoln National Corporation LCN MG /07 What if the balance is destroyed? Variable expenses Fixed expensesWealth transfer Healthcare expenses Emergency/opportunity funds

©2007 Lincoln National Corporation LCN MG /07 Agenda Understanding the facts of long-term care How would you pay for it? How MoneyGuard ® Reserve can offer one simple solution

©2007 Lincoln National Corporation LCN MG /07 Chances are, you’ll need care 1 Source: U.S. Department of Health and Human Services — National Clearinghouse for LTC Information, 10/19/07. At least 60% of Americans over age 65 will need some form of long-term care 1 60%

©2007 Lincoln National Corporation LCN MG /07 Per dayPer year Nursing home – semi-private$285.13$104, Nursing home – private$297.60$108,624 Full-time (12 hours per day) care by home health aide $270$98,550 What does long-term care cost? Average costs of long-term care in NY in 2006 Source: U.S. Department of Health and Human Services — National Clearinghouse for LTC Information, How would you pay for it if you needed long-term care?

©2007 Lincoln National Corporation LCN MG /07 What you can’t rely on Medicare — acute care only Medicaid — must spend down assets

©2007 Lincoln National Corporation LCN MG /07 How to cover long-term care costs It’s up to you. You have three choices: Pay Self-insure Reposition

©2007 Lincoln National Corporation LCN MG /07 Traditional long-term care insurance Advantages Guaranteed benefits Most policies cover all levels of care Disadvantages Premiums you pay may be expensive Recurring premium payments Premiums may increase You typically don’t get your money back

©2007 Lincoln National Corporation LCN MG /07 Self-insuring Advantages You maintain control You don’t pay for coverage you may never use Disadvantages You must set aside significant liquid assets You may deplete assets too quickly

©2007 Lincoln National Corporation LCN MG /07 How to cover long-term care costs If you’re not doing anything, you’re self-insuring.

©2007 Lincoln National Corporation LCN MG /07 Now you can reposition with MoneyGuard ® Reserve MoneyGuard ® Reserve, a universal life insurance policy, is a smart way to cover long-term care costs. It makes sense — for today and tomorrow.

©2007 Lincoln National Corporation LCN MG /07 Designated for long-term care costs One simple solution Life insurance House Cash reserves Investments MoneyGuard ® Reserve While the actual proportions in this chart will differ based on a specific investor’s needs, it does show the different types of assets in a typical retirement-oriented portfolio.

©2007 Lincoln National Corporation LCN MG /07 If you need long-term care Life insurance House Cash reserves Investments MoneyGuard ® Reserve Up to 500% with MoneyGuard ® Reserve Long-term care reimbursements are income tax-free under IRC Section 104(a)(3).

©2007 Lincoln National Corporation LCN MG /07 If you need it back Take it back; it’s in their reserve. Life insurance House Cash reserves Investments MoneyGuard ® Reserve premium is returned Up to 500% with MoneyGuard ® Reserve

©2007 Lincoln National Corporation LCN MG /07 If you never need long-term care Unused portion goes to their beneficiary income tax-free. Life insurance House Cash reserves Investments MoneyGuard ® Reserve death benefit Beneficiaries receive an income tax-free death benefit under IRC Section 101(a)(1).

©2007 Lincoln National Corporation LCN MG /07 Long-term care coverage You need the full benefits of MoneyGuard ® Reserve 1 This hypothetical example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), the Nonforfeiture Benefit Rider, and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender, and health status. Benefits are adjusted for loans and withdrawals and may have tax implications. Long-term care reimbursements are income tax-free under IRC Section 104(a)(3). 3 possibilities 1 You need the full benefits of MoneyGuard ® 2 You change your mind 3 You die

©2007 Lincoln National Corporation LCN MG /07 3 possibilities 1 Your client needs the full benefits of MoneyGuard ® 2 You change your mind 3 You die Money back guarantee You change your mind 2 This hypothetical example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), the Nonforfeiture Benefit Rider, and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender, and health status. Benefits are adjusted for loans and withdrawals. A portion of the amount returned may have tax implications.Guarantees are backed by the claims-paying ability of Lincoln Life & Annuity Company of New York. 1 You needs the full benefits of MoneyGuard ® 2 You change your mind

©2007 Lincoln National Corporation LCN MG /07 All 3 outcomes are guaranteed 3 possibilities 1 You need the full benefits of MoneyGuard ® 2 Your client changes her mind 3 Income tax-free death benefit You never need long-term care 3 This hypothetical example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), the Nonforfeiture Benefit Rider, and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender, and health status. Beneficiaries receive death benefits income tax-free under IRC Section 101(a)(1). 2 You change your mind 3 You never need long-term care 1 You need the full benefits of MoneyGuard ® 2 You change your mind 3 You never need long-term care Guarantees are backed by the claims-paying ability of Lincoln Life & Annuity Company of New York.

©2007 Lincoln National Corporation LCN MG /07 Nancy Arneau Age 65 Let’s look at Nancy Arneau Good health, nonsmoker Decided against traditional long-term care insurance Currently self-insuring Wants to protect her retirement income Hypothetical example only. Benefit amounts vary by age, gender, and health status.

©2007 Lincoln National Corporation LCN MG /07 Repositioning assets Hypothetical example only. Benefit amounts vary by age, gender, and health status. $300,000 Set aside for long-term care costs $200,000 Freed up for retirement $100,000 Repositioned for MoneyGuard ® Reserve payment Up to $499,218 Death benefit or long-term care benefit $166,406 $332,812 Additional long-term care benefit Benefits are adjusted for loans and withdrawals and may have tax implications. Long-term care reimbursements are income tax-free under IRC Section 104(a)(3). Beneficiaries receive death benefits income tax-free under IRC Section 101(a)(1).

©2007 Lincoln National Corporation LCN MG /07 Three possibilities – all guaranteed This hypothetical example is based on a 65-year-old, nonsmoking female in good health with a $100,000 single premium for a policy with the two-year Convalescent Care Benefits Rider (CCBR), the four-year Extension of Benefits Rider (EOBR), the Nonforfeiture Benefit Rider, and the Return of Premium Rider (ROPR). Benefit amounts vary by age, gender, and health status. Beneficiaries receive death benefits income tax-free under IRC Section 101(a)(1). 1 You need the full benefits of MoneyGuard ® Reserve 2 You change your mind 3 You never need long-term care

©2007 Lincoln National Corporation LCN MG /07 What you should know about MoneyGuard ® Reserve Reimburses for qualified long-term care costs Includes a money back guarantee Helps you leave money to loved ones Helps you maintain control of assets Protects assets now and in the future

©2007 Lincoln National Corporation LCN MG /07 Which option fits your strategy? Government programs Traditional long-term care insurance Self-insuring MoneyGuard ® Reserve

©2007 Lincoln National Corporation LCN MG /07 The challenge of long-term care Do you have enough assets set aside for long-term care? Do you have access to assets? If you don’t need long-term care, what happens to the assets?

©2007 Lincoln National Corporation LCN MG /07 Retirement income security MoneyGuard ® Reserve helps you leverage dollars available for long-term care costs. MoneyGuard Reserve offers a money back guarantee. MoneyGuard Reserve offers efficient transfer to your heirs.

©2007 Lincoln National Corporation LCN MG /07 Next steps Talk with your financial advisor/insurance agent. Be sure you’re protecting your retirement income.

©2007 Lincoln National Corporation LCN MG /07 MoneyGuard® Reserve is a universal life insurance policy with a rider that accelerates the specified amount of death benefit to pay for covered long-term care expenses. An Extension of Benefits Rider (EOBR) is available to continue long-term care benefit payments after the entire specified amount of death benefit has been paid. The Return of Premium Rider (ROPR) is included at issue (single premium only). The cost for these riders will be deducted from the policy account value. Guarantees are backed by the claims-paying ability of the issuer and are subject to policy terms and conditions. The policy and riders have exclusions, limitations, and/or reductions. This material was prepared to support the promotion and marketing of a universal life insurance product. Lincoln Financial Group ® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein. MoneyGuard Reserve is issued by Lincoln Life & Annuity Company of New York, Syracuse, NY on Policy Form LN850 (8/05) with a Convalescent Care Benefits Rider (CCBR) on Rider Form LR851 (8/05), an Extension of Benefits Rider (EOBR) on Rider Form LR852 (8/05), a Terminal Illness Accelerated Death Benefit Rider on Rider Form LR853 (8/05), and a Return of Premium Rider (ROPR), on Rider Form LR850 (8/05). Contractual obligations are backed by the claims- paying ability of Lincoln Life & Annuity Company of New York. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations. Important disclosures