LINCOLN NATIONAL
LIFE INSURANCE CO.
A PART OF LINCOLN NATIONAL CORPORATION
ANNUITY CONTRACT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
BENEFIT PAYMENT OPTIONS
NON-PARTICIPATING
The Lincoln National Life Insurance Company (LNL) agrees to provide the benefits
and other rights described in this Contract in accordance with the terms of this
Contract.
NOTICE OF 10-DAY RIGHT TO EXAMINE CONTRACT. WITHIN 10 DAYS AFTER THIS CONTRACT
IS FIRST RECEIVED, IT MAY BE CANCELLED FOR ANY REASON WITHOUT PENALTY (E.G., NO
SURRENDER CHARGE WILL BE DEDUCTED) BY DELIVERING OR MAILING IT TO THE HOME
OFFICE OF LNL, OR BY CANCELING THE CONTRACT THROUGH LNL'S INTERNET SERVICE
CENTER. THE PURCHASE PAYMENT WILL BE INVESTED IN THE LINCOLN NATIONAL MONEY
MARKET FUND DURING THIS FREE LOOK PERIOD. UPON CANCELLATION, LNL WILL RETURN THE
VALUE OF ANY PAYMENTS MADE TO THE VARIABLE ACCOUNT.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT (SEE SECTIONS 2 AND 3).
Signed for the Lincoln National Life Insurance Company at its Home Office in
Fort Xxxxx, Indiana.
XXX X XXXXXX, PRESIDENT XXXXX X. XXXXXX, VICE PRESIDENT
Form 28977
Page 1
TABLE OF CONTENTS
ARTICLE
DEFINITIONS
1 PURCHASE PAYMENTS, OPTIONS, AND BENEFITS
2 ANNUITY PAYOUT OPTION BENEFITS
3 BENEFICIARY
4 GENERAL PROVISIONS
5 ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION
Form 28977
Page 2
CONTRACT DATA
CONTRACT NUMBER: XX-0123456
CONTRACT OWNER INFORMATION
PRIMARY JOINT
------- -----
CONTRACT OWNER: Xxxxxxx Xxxxxxx Xxxx Xxxxxxx
CONTRACT OWNER ADDRESS: 0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
CONTRACT OWNER SSN/TAX ID: 000-00-0000 000-00-0000
ANNUITANT INFORMATION
ANNUITANT: Xxxxxxx Xxxxxxx DATE OF BIRTH: 2/17/1938
SEX: Male
Contingent Annuitant: Xxxx Xxxxxxx DATE OF BIRTH: 4/12/1938
SEX: Female
CONTRACT INFORMATION
TYPE OF CONTRACT: Non-Qualified
EFFECTIVE DATE: July 1, 1998
MATURITY DATE July 1, 2048
PRODUCT: [eAnnuity]
PURCHASE PAYMENT: $1,500.00
PURCHASE PAYMENT FREQUENCY: Monthly
PURCHASE PAYMENT ALLOCATION: 25% Lincoln National Managed Fund, Inc.
75% Lincoln National Growth and Income Fund, Inc.
BENEFICIARY INFORMATION
Beneficiary Name: Xxxx Xxxxxxx
Relationship: son
LINCOLN NATIONAL LIFE INSURANCE COMPANY CONTACT INFORMATION
Lincoln National Life Insurance Company
P.O. Box 2340
Fort Xxxxx, IN 46801
URL: http:\\www.[annuitynet].com
Form 28977
Page 3
VARIABLE ACCOUNT
There are currently [fourteen] Subaccounts in the Variable Account available to
the Owner. The Owner may direct Purchase Payments under the Contract to any of
the available Subaccounts, subject to limitations. The amounts allocated to
each Subaccount will be invested at net asset value in the shares of one of the
regulated investment companies (the Funds or Series). The Funds or Series are:
1. [Lincoln National Growth and Income Fund, Inc.]
2. [Lincoln National Bond Fund, Inc.]
3. [Lincoln National Money Market Fund, Inc.]
4. [Lincoln National Managed Fund, Inc.]
5. [Lincoln National Special Opportunities Fund, Inc.]
6. [Lincoln National Global Asset Allocation Fund, Inc.]
7. [Lincoln National Equity Income Fund, Inc.]
8. [Lincoln National Aggressive Growth Fund, Inc.]
9. [Lincoln National Capital Appreciation Fund, Inc.]
10. [Lincoln National Social Awareness Fund, Inc.]
11. [Lincoln National International Fund, Inc.]
12. [Delaware Group Premium Fund, Inc. Trend Series]
13. [Delaware Group Premium Fund, Inc. Decatur Total Return Series]
14. [Delaware Group Premium Fund, Inc. Global Bond Series]
15. [Other Funds or Series made available by LNL]
See Section 2.03 for provisions governing any limitations, substitution or
elimination of Funds or Series.
Form 28977
Page 4
ARTICLE 1
DEFINITIONS
Account or Variable Account -- Lincoln National Variable Annuity Account C, the
segregated investment account into which the Lincoln National Life Insurance
Company sets aside and invests the assets attributable to this variable annuity
Contract. The Variable Account is a unit investment trust registered with the
SEC under the Investment Company Act of 1940.
Accumulation Unit -- A unit of measure used to calculate the Contract Value
during the accumulation period and in other ancillary computations.
Annuitant -- The person upon whose life the annuity benefit payments made after
the Annuity Commencement Date will be based.
Annuity Commencement Date -- The date when the funds are withdrawn for payment
of annuity benefits under the Annuity Payment Option selected.
Annuity Payment Option - Any of the forms of annuity benefit payments allowed
under this Contract.
Annuity Unit -- A unit of measure, used after the Annuity Commencement Date, to
calculate the amount of variable annuity benefit payments.
Beneficiary -- The person or entity designated by the Owner to receive the Death
Benefit, if any, payable upon the death of the Owner.
Code -- The Internal Revenue Code (IRC) of 1986, as amended.
Contract -- The agreement between LNL and the Owner in which LNL provides a
variable annuity.
Contract Surrender Value -The Contract Value less any applicable Surrender
Charges.
Contract Value -- The sum of the values of all the Accumulation Units
attributable to this Contract at a given time.
Contract Year -- Each one year period from the anniversary of the effective date
on the Contract Data page to the anniversary of that date in the following year.
Death Benefit -- The amount payable to the Owner's designated Beneficiary upon
death of the Owner.
Fund - Any of the mutual funds into which Purchase Payments are allocated.
Home Office -- The principal office of LNL located at 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxx Xxxxx, Xxxxxxx 00000, or an institution designated by LNL.
Individual Retirement Annuity (IRA) -- A retirement plan qualified for special
tax treatment under the Code, including traditional IRAs under section 408 and
Xxxx IRAs under section 408A.
Internet Service Center - The Internet site LNL maintains specifically for this
Contract to provide variable annuity contract information and other information
to current and prospective annuity Contract Owners and through which various
transactions may be performed. Certain of these transactions may require faxed
or mailed signatures. The URL for the Internet Service Center can be found on
the Contract Data page.
LNL -- The Lincoln National Life Insurance Company.
Form 28977
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Maturity Date -- The date specified on the Contract Data page. This is the date
at which annuitization will automatically occur. This date may be changed.
Net Asset Value Per Share - The market value of a Fund or Series share
calculated each day by taking the closing market value of all securities owned,
adding the value of all other assets (such as cash), subtracting all
liabilities, and then dividing the result (total net assets) by the number of
shares outstanding.
Owner -- The individual or entity who exercises rights of ownership under this
Contract.
Purchase Payments -- Amounts paid into this Contract.
Series - Any of the underlying portfolios of the [Delaware Group Premium Fund,
Inc.] in which Purchase Payments allocated to the Variable Account are
indirectly invested.
Subaccount -- That portion of the Variable Account which invests in shares of a
particular Fund or Series. There is a separate Subaccount that corresponds to
each Fund and Series.
Surrender Charge -- The charge assessed on premature withdrawals or surrender of
the Contract, calculated according to the Contract provisions.
Valuation Date -- Close of the stock market of each day that the New York Stock
Exchange (NYSE) is open for business.
Valuation Period -- The period commencing at the close of trading on the NYSE
on a particular Valuation Date and ending at the close of trading on the NYSE on
the next succeeding Valuation Date.
ARTICLE 2
PURCHASE PAYMENTS, OPTIONS, AND BENEFITS
2.01 WHERE PAYABLE
All Purchase Payments must be made either to LNL at its Home Office or through
the Internet Service Center.
2.02 AMOUNT AND FREQUENCY
The minimum initial Purchase Payment is $1,000. The minimum subsequent payment
to the Contract at any one time must be at least $100.00. Purchase Payments may
be made until the earliest of the Annuity Commencement Date, the surrender of
the Contract, the Maturity Date, or payment of any Death Benefit. LNL reserves
the right to limit the sum of Purchase Payments made under this Contract to
$5,000,000.
2.03 VARIABLE ACCOUNT
Purchase Payments under the Contract are allocated to the Variable Account. The
Variable Account is for the exclusive benefit of persons entitled to receive
benefits under variable annuity contracts. The Variable Account will not be
charged with the liabilities arising from any other part of LNL's business. The
Owner may direct Purchase Payments under the Contract to any of the available
Subaccounts. The amounts allocated to each Subaccount will be invested at net
asset value in the shares of one of the Funds or Series. The Funds and Series
are shown on the Contract Data page.
LNL reserves the right to eliminate the shares of any Fund or Series and
substitute the securities of a different Fund,
Form 28977
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Series, investment company or mutual fund if the shares of a Fund or Series are
no longer available for investment, or, if in the judgment of LNL, further
investment in any Fund or Series should become inappropriate in view of the
purposes of the Contract. LNL may add new Subaccounts investing in a new Fund
or Series. LNL will give the Owner notice of the elimination and substitution
of any Fund or Series within fifteen days after such substitution occurs. Such
notice will be posted on the Internet Service Center, and sent to the Owner's
last known e-mail address. Any such elimination, substitution or addition will
be subject to compliance with any applicable regulatory requirements.
LNL will use each Purchase Payment allocated to the Variable Account by the
Owner to buy Accumulation Units in the Subaccount(s) selected by the Owner. The
number of Accumulation Units purchased will be determined by dividing the amount
directed to the Subaccount by the dollar value of an Accumulation Unit in such
Subaccount as of the next valuation of such Subaccount immediately following
LNL's receipt of the Purchase Payment. The number of Accumulation Units held for
an Owner in a Subaccount will not change simply because of a change in the
dollar value of those Units.
2.04 VALUATION OF ACCUMULATION UNITS
The Contract Value at any time prior to the Annuity Commencement Date equals the
sum of the values of the Accumulation Units credited in the Subaccounts under
the Contract.
The value of a Subaccount on any Valuation Date is the number of Accumulation
Units in the Subaccount multiplied by the value of an Accumulation Unit in the
Subaccount at the end of the Valuation Period.
Accumulation Units for each Subaccount are valued separately. Initially, the
value of an Accumulation Unit was
arbitrarily established at the inception of the Subaccount. It may increase or
decrease from Valuation Period to Valuation Period. The Accumulation Unit value
for a Subaccount for any later Valuation Period is determined as follows:
(1) THE TOTAL VALUE OF FUND OR SERIES SHARES HELD IN THE SUBACCOUNT is
calculated by multiplying the number of Fund or Series shares owned by
the Subaccount at the beginning of the Valuation Period by the Net
Asset Value Per Share of the Fund or Series at the end of the
Valuation Period, and adding any dividend or other distribution of the
Fund or Series if an ex-dividend date occurs during the Valuation
Period; MINUS
(2) THE LIABILITIES OF THE SUBACCOUNT AT THE END OF THE VALUATION PERIOD
(such liabilities include daily charges imposed on the Subaccount, and
may include a charge or credit with respect to any taxes paid or
reserved for by LNL that LNL determines are as a result of the
operations from the Variable Account); the result DIVIDED BY
(3) THE OUTSTANDING NUMBER OF ACCUMULATION UNITS IN THE SUBACCOUNT AT THE
BEGINNING OF THE VALUATION PERIOD.
The daily charges imposed on a Subaccount for any Valuation Period represent the
annuity asset charge adjusted for the number of calendar days in the Valuation
Period. On an annual basis the annuity asset charge will not exceed 0.55%. The
Accumulation Unit value and Annuity Unit value may increase or decrease the
dollar value of benefits under the Contract. The dollar value of benefits will
not be adversely affected by expenses incurred by LNL.
2.05 TRANSFERS
Prior to the earlier of:
(1) the Maturity Date;
(2) surrender of the Contract;
(3) payment of any Death Benefit; or
Form 28977
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(4) the Annuity Commencement Date;
the Owner may direct a transfer of assets from one Subaccount to another
Subaccount.
A transfer will result in the purchase of Accumulation Units in one Subaccount
and the redemption of Accumulation Units in the other Subaccount. Such a
transfer will be accomplished at relative Accumulation Unit values as of the
Valuation Date the transfer request is received.
LNL does not currently charge for this service. However, LNL reserves the right
to impose a charge in the future for transfers between Subaccounts. In addition,
LNL reserves the right to refuse a transfer if, in the investment advisor's
judgement, LNL would be unable to invest effectively according to the Fund's or
Series' investment objectives as a result of such a transfer. LNL reserves the
right to revise the transfer privilege at any time.
2.06 WITHDRAWAL OPTION
The Owner may withdraw a part of the surrender value of this Contract, subject
to a Surrender Charge (see section 2.08). The withdrawal will be effective on
the Valuation Date on which LNL receives a request:
(1) in writing at its Home Office; or
(2) through the Internet Service Center.
The minimum withdrawal is $300. Partial withdrawals will not be permitted if
they lower the Contract Value below $1,000. LNL reserves the right to surrender
this Contract if any withdrawal reduces the total Contract Value to a level in
which this Contract may be surrendered in accordance with the terms set forth in
the nonforfeiture law, applicable in the Owner's home state, for individual
deferred annuities. LNL may surrender the Contract for its surrender value.
The request should specify from which Subaccount the withdrawal will be made.
If no Subaccount is specified, LNL will withdraw the amount requested on a
pro-rata basis from each Subaccount. Any cash payment will be mailed or
electronically transferred from LNL's Home Office within seven days after the
date of withdrawal; however, LNL may be permitted to defer such payment under
the Investment Company Act of 1940, as in effect at the time such request for
withdrawal is received.
The withdrawal option is not available after the Annuity Commencement Date.
2.07 SURRENDER OPTION
The Owner may surrender this Contract for its surrender value. On surrender,
this Contract terminates. Surrender will be effective on the Valuation Date on
which LNL receives a written request at its Home Office or a request through the
Internet Service Center. The Contract Surrender Value will be the total
Contract Value on the Valuation Date, less any Surrender Charge.
Payment will be made within seven days after the date of surrender; however, LNL
may be permitted to defer such payment under the Investment Company Act of 1940,
as in effect at the time a request for surrender is received at its Home Office.
The surrender option is not available after the Annuity Commencement Date.
2.08 SURRENDER CHARGE
The Surrender Charge is calculated as follows:
Form 28977
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Surrender
Number of complete Charge (as a
Contract years percentage of
Since initial payment Contract
was invested Value withdrawn)
1 year or less 3%
More than 1 year 2%
More than 2 years 1%
More than 3 years 0%
2.09 WAIVER OF SURRENDER CHARGES
A surrender of this Contract or withdrawal of Contract Value prior to the
Annuity Commencement Date may be subject to a Surrender Charge, except that such
charges do not apply to:
(1) a surrender of the Contract as a result of the death of the Owner; or
in the case of joint Owners, the death of one of the Owners; or
(2) annuitization of the Contract as provided for in Article 3.
The Surrender Charge will only be waived if LNL is in receipt of proof,
acceptable to LNL, of the exception.
If a non-natural person is the Owner of the Contract, the Annuitant will be
considered the Owner of the Contract for purposes of (1) above.
2.10 DEATH OF OWNER
BEFORE THE ANNUITY COMMENCEMENT DATE
ENTITLEMENT
If there is a single Owner, upon the death of the Owner LNL will pay a
Death Benefit to the designated Beneficiary(s). If the designated
Beneficiary is the surviving spouse of the deceased Owner, the designated
Beneficiary may elect to continue the Contract as the new Owner in lieu of
receiving the Death Benefit. If there are no designated Beneficiaries, LNL
will pay a Death Benefit to the Owner's estate. Upon the death of the
designated Beneficiary who continues the Contract as the new Owner, LNL
will pay a Death Benefit to the designated Beneficiary(s) named by the
spouse as new Owner.
If there are joint Owners, upon the death of the first joint Owner, the
surviving joint Owner, as the spouse of the deceased joint Owner, may
either continue the Contract as sole Owner or receive a Death Benefit.
Upon the death of the joint Owner who continues the Contract, LNL will pay
a Death Benefit to the designated Beneficiary(s).
The Death Benefit will be paid if LNL is in receipt of:
(1) proof of death acceptable to LNL;
(2) authorization for payment; and
(3) all claim forms, fully completed.
Proof of death may be:
(1) a certified copy of a death certificate;
Form 28977
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(2) a certified copy of the statement of death from the attending
physician;
(3) a certified copy of a decree of a court of competent jurisdiction
as to the findings of death; or
(4) any other proof of death acceptable to LNL.
All Death Benefit payments will be subject to the laws and regulations
governing death benefits.
Notwithstanding any provision of this Contract to the contrary, no payment
of Death Benefits provided under the Contract will be allowed that does not
satisfy the requirements of Code section 72(s) or 401(a)(9), as applicable,
and as amended from time to time.
DETERMINATION OF AMOUNTS
In the case of the death of the Owner, or in the case of joint Owners, one
of the Owners; this Contract provides a Death Benefit equal to the Contract
Value. If the Owner is a corporation or other non-individual person
(non-natural person), the death of the Annuitant will be treated as the
death of the Owner.
PAYMENT OF AMOUNTS
The Death Benefit payable on the death of the Owner, or after the death of
the first joint Owner, or upon the death of the spouse who continues the
Contract, will be distributed to the designated Beneficiary(s) as follows:
(1) The Death Benefit must be completely distributed within five
years of the Owner's date of death; or
(2) The designated Beneficiary may elect, within the one year period
after the Owner's date of death, to receive the Death Benefit in
substantially equal installments over the life of such designated
Beneficiary or over a period not extending beyond the life
expectancy of such designated Beneficiary, provided that such
distributions begin not later than one year after the Owner's
date of death.
If a lump sum settlement is elected, the proceeds will be paid within
seven days of approval by LNL of the claim. This payment may be
postponed as permitted by the Investment Company Act of 1940.
ON OR AFTER THE ANNUITY COMMENCEMENT DATE
If the Owner dies on or after the Annuity Commencement Date, any remaining
benefits payable will continue to be distributed under the Annuity Payment
Option then in effect. All of the Owner's rights granted by the Contract
will pass to the joint Owner, if any; otherwise to the designated
Beneficiary.
If there is no named Beneficiary at the time of the Owner's death, then the
Owner's rights will pass to the Annuitant, if applicable. If no named
Beneficiary, Annuitant, or joint Annuitant survives the Owner, any
remaining annuity benefit payments will continue to the Owner's estate.
2.11 DEATH OF ANNUITANT
BEFORE THE ANNUITY COMMENCEMENT DATE
If the Annuitant is also the Owner or a joint Owner, then the Death Benefit
paid will be subject to the Contract provisions regarding death of the
Owner. If, based on the provisions of the Contract, the surviving spouse of
the Owner/Xxxxxxxxx assumes the Contract, then the contingent Annuitant
becomes the Annuitant. If no contingent Annuitant is named, the surviving
spouse becomes the Annuitant.
If an Annuitant who is not the Owner or joint Owner dies, then the
contingent Annuitant, if any, becomes the Annuitant. If no contingent
Annuitant is named, the Owner (or the younger of the joint Owners) becomes
the
Form 28977
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Annuitant.
ON OR AFTER THE ANNUITY COMMENCEMENT DATE
On receipt of proof of death, as described in Section 2.10, of the
Annuitant or both joint Annuitants, any remaining annuity benefit payments
under the Annuity Payment Option will be paid to the Owner, if living,
otherwise, to the Beneficiary. If there is no Beneficiary, any remaining
benefit payments will continue to the Annuitant's estate.
ARTICLE 3
ANNUITY PAYOUT OPTION
BENEFITS
3.01 ANNUITY PAYMENTS
An election to receive payments under an Annuity Payment Option must be made
before the Maturity Date.
If an Annuity Payment Option is not chosen before the Maturity Date, payments
will commence to the Owner on the Maturity Date under the Annuity Payment Option
which provides a life annuity with annuity payments guaranteed for 10 years.
The Maturity Date may be deferred upon request (either in writing or through the
Internet Service Center) by the Owner and any Beneficiary who cannot be changed.
Purchase Payments may be made until the new Maturity Date.
3.02 CHOICE OF ANNUITY PAYMENT OPTION
BY OWNER -- Before the Annuity Commencement Date, the Owner may choose or change
any Annuity Payment Option.
BY BENEFICIARY -- At the time proceeds are payable to a Beneficiary, a
Beneficiary may choose or change any Annuity Payment Option that meets the
requirements of Code section 72(s) or 401(a)(9) if proceeds are available to the
Beneficiary in a lump sum. The Beneficiary then becomes the Annuitant.
A choice or change must be in writing to LNL, or through the Internet Service
Center.
After the Annuity Commencement Date, the Annuity Payment Option may not be
changed.
3.03 CHOICE OF ANNUITANT AND ANNUITY COMMENCEMENT DATE
If the Owner is a natural person, then prior to the earlier of:
(1) the Maturity Date;
(2) surrender of the Contract;
(3) payment of any Death Benefit; or
(4) the Annuity Commencement Date;
the Owner may change the Annuitant(s) and the Annuity Commencement Date.
However, the Annuitant(s) must be no older than 85 years upon the Annuity
Commencement Date. After the Annuity Commencement Date, the Annuity Payment
Option may not be changed.
If the Owner is a non-natural person, then prior to the earlier of:
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(1) the Maturity Date;
(2) surrender of the Contract;
(3) payment of any Death Benefit; or
(4) the Annuity Commencement Date;
the Owner may add the spouse of the Annuitant as a joint Annuitant and may
change the Annuity Commencement Date. However, the Annuitant(s) must be no older
than 85 years upon the Annuity Commencement Date. After the Annuity Commencement
Date, the Annuity Payment Option may not be changed.
3.04 ANNUITY PAYMENT OPTIONS
(1) Life annuity / life annuity with guaranteed period -- payments will be
made for life with no period certain, for life with a 10 year period
certain, or for life with a 20 year period certain.
(2) Joint life annuity / joint life annuity with guaranteed period --
payments will be made during the joint life of the Annuitant and a
joint Annuitant of the Owner's choice. Payments will be made for life
with no period certain, for life with a 10 year period certain, or for
life with a 20 year period certain. Payments continue for the life of
the survivor at the death of the Annuitant or joint Annuitant.
(3) Other Annuity Payment Options may be offered by LNL from time to time.
At the time an Annuity Payment Option is selected under the provisions of this
Contract, the total Contract Value will be applied to provide a variable annuity
payment.
The amount of annuity payment will depend on the age and sex (except in cases
where unisex rates are required) of the Annuitant as of the Annuity Commencement
Date. Annuity payments will be made once each month. The Contract Value and
Annuity Unit value used to effect benefit payments will be calculated as of the
Annuity Commencement Date and each monthly anniversary of the Annuity
Commencement Date. Payments will be made within fourteen days after the
Annuity Commencement Date and monthly anniversaries.
3.05 DETERMINATION OF THE AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
Article 6 of this Contract illustrates the minimum payment amounts and the age
adjustments that will be used to determine the first monthly payment under a
variable Annuity Payment Option. The tables show the dollar amount of the first
monthly payment that can be purchased with each $1,000 of Contract Value, after
deduction of any applicable premium taxes. Amounts shown use the 1983 'a'
individual annuity mortality table, modified, with an assumed rate of return of
5% per year.
3.06 DETERMINATION OF THE AMOUNT OF SUBSEQUENT VARIABLE ANNUITY PAYMENTS
The first variable annuity payment is sub-divided into components, each of which
represents the product of:
(1) the percentage elected by the Contract Owner of a specific Subaccount;
and
(2) the entire first variable annuity payment.
On the Annuity Commencement Date, the Contract is credited with Xxxxxxx Units
for each Subaccount. The number of Annuity Units credited is computed by
dividing the component of the first payment attributable to a specific
Subaccount by the Annuity Unit value for that Subaccount. Each component of each
variable annuity payment after the first payment attributable to a specific
Subaccount will be determined by multiplying the Annuity Unit value for that
Subaccount on the monthly anniversary of the Annuity Commencement Date by the
number of Annuity Units
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attributable to that Subaccount. The total variable annuity payment will be the
sum of the payments attributable to each Subaccount. In the absence of transfers
between Subaccounts, the number of Annuity Units attributable to each Subaccount
remains constant, although the Annuity Unit values will vary with the investment
performance of the Funds and Series.
The Annuity Unit value for any Valuation Period for any Subaccount is determined
by multiplying the Annuity Unit value for the immediately preceding Valuation
Period by the product of (A) and (B), where:
(A) is 0.999866337 raised to a power equal to the number of days in the
current Valuation Period; and
(B) is the Accumulation Unit value of the same Subaccount for this
Valuation Period divided by the Accumulation Unit value of the same
Subaccount for the immediately preceding Valuation Period.
LNL will value all assets in the Subaccount in accordance with the provisions of
applicable laws, rules, and regulations. The determination by LNL of the value
of an Accumulation Unit or of an Annuity Unit, consistent with the above
described methodology, will be binding on the Owner(s) and any Beneficiaries.
LNL guarantees that the dollar amount of each payment after the first will not
be affected by variations in mortality experience from mortality assumptions on
which the first payment is based.
After the Annuity Commencement Date, the Owner may direct a transfer of assets
from one Subaccount to another. Such transfers will be limited to three (3) per
Contract Year.
A transfer from one Subaccount to another Subaccount will result in the purchase
of Annuity Units in one Subaccount, and the redemption of Annuity Units in the
other Subaccount. Such a transfer will be accomplished at relative Annuity Unit
values as of the Valuation Date the transfer request is received.
3.07 PROOF OF AGE
Payment will be subject to proof of age acceptable to LNL, such as a certified
copy of a birth certificate.
3.08 EVIDENCE OF SURVIVAL
If payments depend upon the continuing life of an Annuitant, then LNL may
require proof that the Annuitant is alive when each payment is due.
3.09 CHANGE IN ANNUITY PAYMENT OPTION
The Annuity Payment Option may not be changed after the Annuity Commencement
Date.
ARTICLE 4
BENEFICIARY
4.01 DESIGNATION
The Owner may designate a Beneficiary(s). Unless there are joint Owners, the
designated Beneficiary(s) will receive the Death Benefit proceeds upon the death
of the Owner.
If there are joint Owners, the surviving joint Owner will receive the Death
Benefit proceeds upon the death of the first
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joint Owner. The surviving joint Owner will be treated as the primary,
designated Beneficiary. Any other Beneficiary designation on record at the time
of death of the first joint Owner will be treated as a contingent Beneficiary.
If the surviving joint Owner, as spouse of the deceased joint Owner, continues
the Contract as the sole Owner in lieu of receiving the Death Benefit proceeds,
then the designated Beneficiary(s) will receive the Death Benefit proceeds upon
the death of the surviving spouse.
Unless otherwise stated in the Beneficiary designation, designated Beneficiaries
will share the Death Benefit equally.
4.02 CHANGE
The Owner may change any designated Beneficiary, unless prohibited by the
previous designation. A change of Beneficiary will then revoke any previous
designation.
A change may be made either by filing a written request, in a form acceptable to
LNL, at its Home Office, or through the Internet Service Center. The change will
become effective upon receipt of the request by LNL.
4.03 DEATH
Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other named
Beneficiaries, according to their respective interests. If there are no other
named Beneficiaries, benefits will be paid to the contingent Beneficiary(s), if
any. Before the Annuity Commencement Date, if no Beneficiary or contingent
Beneficiary survives the Owner the proceeds will be paid to the Owner's estate.
Once a Beneficiary is entitled to Death Benefit proceeds, the Beneficiary may
name his or her own Beneficiary(s) to receive any remaining benefits due under
the Contract, should the Beneficiary die prior to receipt of all benefits. If
no Beneficiary is named, or if the named Beneficiary predeceases the original
Beneficiary, any remaining benefits will continue to the original Beneficiary's
estate. This designation must be made to the LNL Home Office or through the
Internet Service Center.
ARTICLE 5
GENERAL PROVISIONS
5.01 THE CONTRACT
The Contract, the application, and any riders attached to the Contract
constitute the entire Contract. Only the president, a vice president, the
secretary or an assistant secretary of LNL has the power, on behalf of LNL, to
change, modify, or waive any provisions of this Contract.
LNL reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.
Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have their usual and customary meaning except when specifically defined.
5.02 THE INTERNET SERVICE CENTER
The Internet Service Center is maintained to provide information to current and
prospective customers and to enable various transactions. For security LNL may
issue the Owner a PIN or password. The Owner is responsible for any use
Form 28977
Page 14
of this PIN or password. For legal reasons certain transactions require a
document with a signature (faxed or mailed). E-mailed requests for transactions
that require a signature will not be processed. Detailed instructions on how to
perform various transactions such as transferring funds from one Subaccount to
another Subaccount, changing the Beneficiary or making a withdrawal can be found
at the Internet Service Center. These procedures must be followed. The Owner
agrees to receive all required documents through the Internet Service Center.
Documents will be considered to be delivered to the Owner when they are placed
in the Owner's personal folder at the Internet Service Center.
5.03 OWNERSHIP
The Owner is the person who has the ability to exercise the rights within this
Contract.
The Owner may name only his or her spouse as a joint Owner. Joint Owner(s) will
be treated as having equal, undivided interests in the Contract, including
rights of survivorship. Either joint Owner, independently of the other, may
exercise any ownership rights in the Contract.
Before the Annuity Commencement Date, the Owner has the right to change the
Annuitant at any time by notifying LNL of the change in writing or through the
Internet Service Center. The Annuitant may not be changed in a Contract owned by
a non-natural person. The Owner may also name a contingent Annuitant by
notifying LNL in writing or through the Internet Service Center. The contingent
Annuitant designation is no longer applicable after the Annuity Commencement
Date.
5.04 ASSIGNMENTS
If used with an Individual Retirement Annuity, the Contract will not be
transferable. It may not be sold, assigned, discounted or pledged as collateral
for a loan or as security for the performance of an obligation or for any other
purpose.
5.05 INCONTESTABILITY
LNL will not contest this Contract.
5.06 MISSTATEMENT OF AGE AND/OR SEX
If the age and/or sex of the Annuitant has been misstated, the benefits
available under this Contract will be those which the Purchase Payments would
have purchased using the correct age and/or sex. Any underpayment already made
by LNL will be made up immediately and any overpayments already made by LNL will
be charged against the annuity payments falling due after the correction is
made.
5.07 NONPARTICIPATING
The Contract is nonparticipating and will not share in the surplus earnings of
LNL.
5.08 VOTING RIGHTS
LNL will vote the Fund and Series shares held in the VAA at meetings of the
various Funds and Series. The votes will be cast according to the instructions
of Owners with interests in a Fund or Series. An Owner may give instructions
for a number of votes equal to the Owner's percentage interest in a subaccount
of the total number of votes attributable to the
Form 28977
Page 15
subaccount, fractional shares will be recognized.
Ownership of this Contract will not entitle any person to vote at any meeting of
shareholders of LNL.
5.09 OWNERSHIP OF THE ASSETS
LNL will have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.
5.10 REPORTS
LNL will send a report to the Owner at least once each Contract Year. The
report will be mailed electronically to the last e-mail address known to LNL.
The report will include a statement of the number of units credited to the
Variable Account under this Contract and the dollar value of such units. The
information in the report will be as of a date not more than one month prior to
the date of e-mailing the report. In addition, LNL will e-mail to the Owner at
least once in each Contract Year a report of the investments held in the
Subaccounts under this Contract. These reports will also be available through
the Internet Service Center.
5.11 PREMIUM TAX
State and local government premium tax, if applicable, will be deducted from
Purchase Payments or Contract Value when incurred by LNL or at another time of
LNL's choosing.
5.12 MAXIMUM ISSUE AGE
This Contract will not be issued to Owners or joint Owners over the age of 85.
Form 28977
Page 16
ARTICLE 6
ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
SINGLE LIFE ANNUITIES
----------------------------------------------------------------------------------------------
MALE MALE MALE FEMALE FEMALE FEMALE
WITH NO WITH 120 WITH 240 WITH NO WITH 120 WITH 240
PERIOD MONTHS MONTHS PERIOD MONTHS MONTH
AGE CERTAIN CERTAIN CERTAIN CERTAIN CERTAIN CERTAIN
----------------------------------------------------------------------------------------------
60 $6.23 $6.09 $5.70 $5.68 $5.62 $5.43
61 $6.36 $6.20 $5.76 $5.78 $5.71 $5.49
62 $6.49 $6.31 $5.82 $5.88 $5.80 $5.56
63 $6.64 $6.43 $5.87 $5.99 $5.90 $5.62
64 $6.79 $6.56 $5.93 $6.11 $6.00 $5.68
----------------------------------------------------------------------------------------------
65 $6.96 $6.69 $5.99 $6.23 $6.11 $5.75
66 $7.14 $6.82 $6.04 $6.37 $6.23 $5.82
67 $7.34 $6.96 $6.09 $6.51 $6.35 $5.88
68 $7.54 $7.11 $6.14 $6.67 $6.48 $5.94
69 $7.77 $7.26 $6.19 $6.84 $6.62 $6.01
----------------------------------------------------------------------------------------------
70 $8.01 $7.42 $6.23 $7.02 $6.77 $6.07
71 $8.26 $7.58 $6.27 $7.22 $6.92 $6.12
72 $8.52 $7.74 $6.31 $7.43 $7.08 $6.18
73 $8.81 $7.91 $6.34 $7.67 $7.25 $6.23
74 $9.11 $8.07 $6.37 $7.92 $7.43 $6.27
----------------------------------------------------------------------------------------------
75 $9.44 $8.24 $6.40 $8.20 $7.61 $6.31
76 $9.79 $8.41 $6.42 $8.49 $7.79 $6.35
77 $10.17 $8.58 $6.44 $8.81 $7.98 $6.38
78 $10.57 $8.75 $6.46 $9.15 $8.18 $6.41
79 $11.01 $8.91 $6.47 $9.52 $8.37 $6.43
----------------------------------------------------------------------------------------------
80 $11.47 $9.07 $6.48 $9.93 $8.56 $6.45
81 $11.97 $9.22 $6.49 $10.37 $8.76 $6.47
82 $12.50 $9.37 $6.50 $10.85 $8.94 $6.48
83 $13.07 $9.51 $6.50 $11.37 $9.12 $6.49
84 $13.68 $9.64 $6.51 $11.94 $9.30 $6.50
----------------------------------------------------------------------------------------------
85 $14.33 $9.76 $6.51 $12.55 $9.46 $6.50
----------------------------------------------------------------------------------------------
Form 28977
Page 17
JOINT AND SURVIVOR ANNUITIES (1 MALE AND 1 FEMALE)
---------------------------------------------------------------------------
WITH NO WITH 120 WITH 240
JOINT PERIOD MONTHS MONTHS
AGE CERTAIN CERTAIN CERTAIN
---------------------------------------------------------------------------
60 $5.24 $5.24 $5.20
61 $5.31 $5.31 $5.26
62 $5.39 $5.38 $5.33
63 $5.47 $5.46 $5.39
64
--------------------------------------------------------------------------
$5.56 $5.55 $5.46
65 $5.65 $5.64 $5.53
66 $5.75 $5.74 $5.61
67 $5.86 $5.84 $5.68
68 $5.98 $5.96 $5.75
69 $6.10 $6.08 $5.83
--------------------------------------------------------------------------
70 $6.24 $6.20 $5.90
71 $6.38 $6.34 $5.97
72 $6.54 $6.48 $6.04
73 $6.70 $6.64 $6.11
74 $6.89 $6.80 $6.17
--------------------------------------------------------------------------
75 $7.08 $6.97 $6.23
76 $7.29 $7.15 $6.28
77 $7.52 $7.34 $6.32
78 $7.77 $7.53 $6.36
79 $8.03 $7.73 $6.40
--------------------------------------------------------------------------
80 $8.32 $7.94 $6.43
81 $8.63 $8.15 $6.45
82 $8.96 $8.37 $6.47
83 $9.32 $8.58 $6.49
84 $9.71 $8.79 $6.49
--------------------------------------------------------------------------
85 $10.13 $8.99 $6.50
--------------------------------------------------------------------------
AGE ADJUSTMENT TABLE
---------------------------------------------------------------------------
YEAR OF ADJUSTMENT YEAR OF ADJUSTMENT
BIRTH TO AGE BIRTH TO AGE
---------------------------------------------------------------------------
Before 1920 +2 1960-1969 -3
1920-1929 +1 1970-1979 -4
1930-1939 0 1980-1989 -5
1940-1949 -1 1990-1999 -6
1950-1959 -2 ETC. ETC.
---------------------------------------------------------------------------
Form 28977
Page 18
ANNUITY
CONTRACT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
BENEFIT PAYMENT OPTIONS
NON-PARTICIPATING
If you have any questions concerning
this Contract, please contact
Lincoln National Life by
mail or through the
Internet Service Center
LINCOLN NATIONAL
LIFE INSURANCE COMPANY
0000 XXXXX XXXXXXX XXXXXX
P.O. BOX 2340
FORT XXXXX, INDIANA 46801
URL: http:\\www.[annuitynet].com
Form 28977
Page 19
