Table of Contents
- Quick Take
- Who Is Lincoln Benefit Life Company?
- How the Lincoln Benefit Life Annuity Works
- Key Benefits & Built-In Protections
- Fees, Surrender Charges & Transfer Rules
- Financial Strength & Credit Ratings
- How It Compares to Other Annuity Providers
- Is the Lincoln Benefit Life Annuity Right for You?
- FAQs
- Final Thoughts
Quick Take
The Lincoln Benefit Life Annuity is a long-term investment product designed to turn a lump-sum or periodic premium into a future income stream—often for life. It combines insurance guarantees such as a death benefit with market-linked growth potential similar to a mutual fund. Because Lincoln Benefit Life no longer writes new contracts, you’ll typically encounter these annuities if you’re a current policyowner or if your advisor recommends a 1035 exchange into an existing chassis. That makes understanding the fine print—especially fees and credit ratings—critical before you lock in your policy numbers.
Who Is Lincoln Benefit Life Company?
Founded in 1938 and now headquartered in Rosemont, IL, Lincoln Benefit Life Company (LBL) spent decades as an Allstate subsidiary before being acquired by Kuvare Holdings in 2019. Today, LBL sits inside a family of insurance companies that includes Guaranty Income Life Insurance Company and United Life Insurance Company, giving it access to broader annuity solutions and reinsurance expertise.
While LBL remains in runoff—meaning it services existing contracts instead of writing new ones—it continues to honor obligations and provide customer service through its dedicated policyholder portal.
How the Lincoln Benefit Life Annuity Works
LBL originally issued both fixed and variable annuities. Most contracts still on the books are variable, allowing owners to allocate premiums across professionally managed unit investment trusts and sub-account portfolios.
- Base option: You choose either an immediate income stream or a deferred accumulation phase.
- Investment choices: Sub-accounts track diversified mutual fund-style portfolios ranging from conservative bond to aggressive equity models.
- Guarantees: Optional riders can lock in a lifetime withdrawal rate, step-up the death benefit, or credit a minimum rate even if markets fall.
- Payouts: At annuitization you convert the account to guaranteed income—fixed, inflation-adjusted, or life-plus-period-certain.
Pro tip: Before committing, compare Lincoln Benefit’s variable annuity design to the SEC’s baseline guide on variable annuities for a clear view of how growth, fees, and guarantees interact.
Key Benefits & Built-In Protections
| Benefit | Why It Matters |
|---|---|
| Tax-deferred growth | Gains compound without an annual tax drag until withdrawals. |
| Custom death benefit | Protects heirs even if markets correct after you retire. |
| Guaranteed income | Optional living benefit riders can create pension-like cash flow. |
| Creditor protection | In many states, annuity values enjoy stronger protections than brokerage assets. |
| Flexible investment lineup | Access to diversified portfolios and ETFs inside the insurance wrapper. |
Fees, Surrender Charges & Transfer Rules
- Mortality & Expense (M&E): Historically ~1.25%–1.50% on variable accounts.
- Fund expenses: Each sub-account carries its own 0.10%–1.00% expense ratio.
- Transfer fees: LBL allows 12 free transfers per policy year; extra moves run about $25 each.
- Surrender charges: Declining schedule up to 7 years on most contracts—crucial if you plan purchase orders for a shorter horizon.
- Rider costs: Income guarantees or enhanced death benefits typically add 0.40%–1.20% annually.
Always weigh these line items against the risk-adjusted return you could get from low-cost index funds or ETFs.
Financial Strength & Credit Ratings
AM Best affirmed LBL’s Financial Strength Rating at B++ (Good) with a negative outlook in November 2024. The Long-Term Issuer Credit Rating sits at bbb, reflecting adequate reserves but elevated capital pressure.
For context, A- or higher is generally considered “strong” among insurance companies. If an iron-clad guarantee is priority one, discuss diversification with a licensed financial advisor or consider higher-rated carriers alongside LBL.
How It Compares to Other Annuity Providers
| Feature | Lincoln Benefit Life | Typical A-Rated Carrier |
|---|---|---|
| New policy availability | Runoff only | Actively issuing |
| Financial strength rating | B++ | A- to A++ |
| Sub-account lineup | Legacy unit investment trusts; may lack ESG or tactical options | Frequent lineup updates |
| Customer service | Dedicated call center & online portal | Similar; some offer live chat |
| Fees | Competitive for its era; higher than today’s stripped-down products | Often lower on newer contracts |
If you need the most current policy design or cutting-edge riders, shopping the open market may yield better value. Yet existing LBL owners often keep their contracts to preserve grandfathered guarantees unavailable elsewhere.
Is the Lincoln Benefit Life Annuity Right for You?
Consider LBL’s product if you:
- Already own a contract and benefit from a base option or rider no longer sold elsewhere.
- Value guaranteed income solutions but can tolerate B++ credit risk.
- Want legacy planning flexibility via an enhanced death benefit.
- Expect to keep funds invested at least seven years, minimizing transfer fees and surrender charges.
You may want to look elsewhere if you:
- Need the strongest possible credit ratings or a carrier still issuing new policies.
- Prefer ultra-low-fee index investing without an insurance wrapper.
- Plan to annuitize within three years and can’t justify the higher costs of a variable annuity.
FAQs
Are Lincoln Benefit Life annuities backed by a guaranty association?
Yes. Like other U.S. annuity providers, LBL contracts are protected—up to statutory limits—by each state’s guaranty fund. For broad consumer guidance, see the NAIC’s Deferred Annuity Buyer’s Guide.
What happens if I move my money between sub-accounts?
Transfers are free up to LBL’s annual limit; afterward, a transfer fee applies.
Where can I check daily unit values or policy numbers?
Log in to LBL’s secure portal or call customer service with your policy number handy.
How do unit investment trusts differ from mutual funds inside a variable contract?
UITs hold a fixed basket of securities for a set term, whereas mutual funds are actively managed. FINRA’s primer on Unit Investment Trusts explains the mechanics.
Final Thoughts
The Lincoln Benefit Life annuity can still be a viable retirement income tool, but only when you balance its legacy guarantees against today’s marketplace. Scrutinize fees, understand the carrier’s B++ standing, and—most importantly—run the numbers with a trusted financial advisor before you commit.
Disclaimer: This post is for educational purposes only and is not financial, legal, or tax advice. Do your own research or consult a qualified professional before making any decisions.
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