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Lincoln Financial offers annuity with no surrender charge

Lincoln Financial Group has introduced a new variable annuity with no surrender charge.

Traditionally, surrender charges for annuities are imposed during the first five to seven years of the contract, starting at about 8 percent, if the policy is terminated in the first year, and decreasing with each following year until the fee goes to zero.

The new VA

has no

surrender fees, but early withdrawal still has tax implications.

The American Legacy C-Share variable annuity imposes no such charges (however, funds withdrawn before age 59 1/2 are still subject to 10 percent income tax penalty). The annuity is meant to appeal to annuity buyers who require liquidity and access to funds, says Kelly Updike, spokesperson for Lincoln Financial Group.

Annual fees associated with the American Legacy C-Share annuity are a 1.65 percent "mortality & expense" (M&E) fee and an investment account (12b-1) fee of 0.25 percent.

The annuity offers one fixed account and 11 variable subaccounts, all managed by Capital Research and Management Co.

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