Client Guide

Lincoln New Directions SM fixed indexed annuity

The nature of protection takes a new direction

Growth potential with multiple types of interest crediting accounts

Wealth preservation through “locked-in” interest earnings and protection from losses

Income options, including one guaranteed to last a lifetime

Protection of a death benefit

Fixed Indexed Annuities

Lincoln New DirectionsSM single

premium fixed indexed annuity

Available for qualified (IRA and Roth

IRA) and nonqualified money, as well

as TSA transfers1

$10,000 minimum single premium

Maximum premium without prior

home office approval:

$2,000,000 for ages 0 – 65,

$500,000 for ages 65+

Issue ages 0 – 85

Two indexed interest accounts

Fixed Account with initial multi-year

guarantee period

Provides a Guaranteed Minimum

Cash Surrender Value

Nursing home and terminal illness

benefits available

Withdrawals from the contract

(also known as policy) are subject

to surrender charges and a

Market Value Adjustment. See the

current Lincoln New Directions

Facts-At-A-Glance for details.

2

1TherearenoTSAloanprovisions.

The nature of retirement and fixed indexed annuities

The concept of retirement is changing. Individuals are living

longer, facing increasing costs, and addressing new challenges.

Today’s retirees are relying less on traditional retirement income

sources than in the past and instead planning and creating their

own retirement savings plan. A fixed indexed annuity can help

address some of the challenges facing retirees by providing greater

potential growth than many types of fixed interest products, yet

with less risk than investment vehicles based on equities. By their

very nature, fixed indexed annuities offer many advantages as a

retirement savings vehicle.

What should you know about fixed indexed annuities?Afixedindexedannuityisintendedforretirementandotherlong-term

financialneeds.It’sdesignedforindividualswhohaveenoughcashor

otherliquidassetstocoverlivingexpensesandunexpectedemergencies,

suchasmedicalexpenses.Sinceafixedindexedannuityisnotaregistered

securityanddoesnotparticipatedirectlyinthestockmarketoranyindex,

itisnotaninvestment.Itisaninsuranceproductdesignedtohelpyou

prepareforyourfuture.

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Growth potential

How can tax deferral help?Lincoln New DirectionsSMisatax-deferredfixedindexedannuity,whichallowsforgreater

growthpotentialthanasimilartaxablefixedproduct.Yourassetsearninterestanddonot

impactyourtaxbilluntiltheyarewithdrawn.Withtaxdeferral:

•Yourprincipalearnsinterest,and

•Allofyourinterestearnsinterest

Theseadvantagesmayhelpyoutoachieveyourretirementgoals.Withdrawalsaresubject

toincometaxand,ifwithdrawnbeforeage59½,maybesubjecttoa10%federal

penaltytax.Withdrawalsduringthesurrenderchargeperiodarealsosubjecttosurrender

chargesandaMarketValueAdjustment.

What are my account choices?Lincoln New Directionsoffersyoumultipleaccountswithdifferentinterestcrediting

methods.Youmaychoosehowyourmoneyisallocatedbetweenthreeinterestaccounts:

•FixedAccount,offeringaninitialfixedinterestrateguaranteeperiod2

•PerformanceTriggeredIndexedAccount3

•2-YearPoint-to-PointIndexedAccount

2 Guaranteesarebackedbytheclaims-payingabilityofTheLincolnNationalLifeInsuranceCompany.3NotavailableforcontractsissuedinthestateofWashington.

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Fixed Account

Can I get predictability and a multi-year guarantee?Lincoln New DirectionsSMfeaturesaFixed

Account.Withinthisaccount:

• Thereisafixedinterestrate,statedinadvance

•Therateremainsfixedformultipleyears2for

predictablegrowth

•Moneyallocatedtothisaccountwillalwaysaccumulate,

regardlessofanyindexperformance

WiththeFixedAccount,fixedinterestiscreditedand

compoundeddaily,givingtheFixedAccountsteady,

predictableaccumulation.Thefixedinterestratewillbe

declaredannuallyattheendoftheinterestrateguarantee

periodandwillnotbelessthantheguaranteedminimum

fixedinterestrateapplicableforthecontractyear.4

4 InterestratesaredeclaredbyTheLincolnNationalLifeInsuranceCompanyatitsdiscretion.Subsequentinterestratesmaybehigherorlowerthantheinitialonesandmaydifferfromthoseusedfornewcontracts.

5

6

Performance Triggered Indexed Account

•Providesthepotentialforgreatergrowththanafixedrate

•Minimizestheimpactofindexfluctuationsonyourcreditedrate

•Offersprincipalprotection

Thishypotheticalexampleassumes:5

•PerformanceTriggeredIndexedAccountwithaspecifiedrateof5%fortheone-yearindexedterm

•A$100,000accountvalueatthebeginningoftheindexedterm

•Beginningindexvalueof1000

Indexedinterestiscreditedattheendoftheindexedtermandiscompoundedannually.Anewspecifiedrateisdeclaredforeachone-yearindexedterm,whichcanneverbelessthan2.5%.6

ThePerformanceTriggeredIndexedAccountisnotavailableforcontractsissuedinthestateofWashington.

1300

1200

1100

1000

900

800Beginningindexvalue Endingindexvalue

Beginningaccountvalue$100,000

Index%change

Indexedcredit%

Endingaccountvalue

10% 5% $105,000

0% 5% $105,000

-10% 0% $100,000

S&P

500

Inde

x va

lue

Growth potential. ThePerformanceTriggeredIndexedAccountcomparesthevalueoftheS&P500Indexatthebeginningandendoftheone-yearindexedterm(alsoreferredtoasindexterm).Ifthepercentagechangeofthosetwovaluesiszeroorpositive,you’llreceiveaspecifiedrateofindexedinterest.

Wealth preservation.Ifthedifferenceisnegative,youraccountiscreditedat0%,protectingyourprincipal.RegardlessofwhathappenstotheS&P500Index,youwillneverreceiveanegativerateonyourmoney.Inaddition,witheachindexedterm,anyinterestearningsare“lockedin.”BecauseyoudonotparticipatedirectlyintheS&P500Index,youraccountvaluewillnotbeerodedbyanysubsequentindexdeclines.Thismeansthatyouwillnotneedtoreboundfrompoorindexperformancebeforeyoucanbenefitfrompositiveindexperformanceduringsubsequentindexedterms.

5 Theseratesarehypotheticalandforillustrationpurposesonly.PastperformanceoftheS&P500IndexisnoguaranteeoffuturechangesintheS&P500IndexoroffutureindexedinterestearningsofLincoln New DirectionsSM.

6 Interestrates,specifiedrates,andindexedinterestcapsaredeclaredbyTheLincolnNationalLifeInsuranceCompanyatitsdiscretion.Subsequentinterest

rates,specifiedrates,andindexedinterestcapsmaybehigherorlowerthantheinitialonesandmaydifferfromthoseusedfornewcontractsorcontractsissuedatdifferenttimes.TheLincolnNationalLifeInsuranceCompanyreservestherightnottooffertheindexedaccountsafterthesurrenderchargeperiod.

One-year S&P 500 Index percentage change

Specified rate is credited

0% is credited

Negative 0+

One-yearindexedterm

Growth potential.Withthe2-YearPoint-to-PointIndexedAccount,thevalueattheendofthetwo-yearindexedtermiscomparedtothevalueatthebeginningoftheindexedterm.Thepercentagechangeofthosetwovaluesdetermineswhattheaccountearns.Ifthepercentagechangeispositive,theaccountwillearnthefullpercentagechange,uptoanindexedinterestcap.

Wealth preservation.If,attheendofthetwo-yearindexedterm,thepercentagechangeisnegative,theaccountiscreditedat0%,protectingyourprincipal.Inaddition,witheachindexedterm,anyinterestearningsare“lockedin.”Becauseyoudon’tparticipatedirectlyintheS&P500Index,youraccountvaluewillnotbeerodedbyanysubsequentindexdeclines.Thismeansthatyouwillnotneedtoreboundfrompoorindexperformancebeforeyoucanbenefitfrompositiveindexperformanceduringsubsequentindexedterms.

Thishypotheticalexampleassumes:5

•2-YearPoint-to-PointIndexedAccountwithanindexedinterestcapof12%forthetwo-yearindexedterm

•A$100,000accountvalueatthebeginningoftheindexedterm

•Beginningindexvalueof1000

Anindexedcreditpercentageof12%and10%isequivalenttoanannualeffectiveinterestrateof5.83%and4.88%,respectively,compoundedovertwoyears.

Indexedinterestiscreditedattheendoftheindexedtermandcompoundedeverytwoyears.Anewindexedinterestcapisdeclaredforeachtwo-yearindexedtermandwillneverbelessthan7%.6

Indexed interest capRange of possible earnings

0% credited

0%

+

_

Two-year S&P 500 Index percentage change

20% 12% $112,000 (capped)

10% 10% $110,000

-10% 0% $100,000

1300

1200

1100

1000

900

800Beginningindexvalue Endingindexvalue

Beginningaccountvalue$100,000

S&P

500

Inde

x va

lue

2-Year Point-to-Point Indexed Account

•Providesupsidegrowthpotential,uptoacap

•Protectsprincipal

•Hasthegreatestgrowthpotential,andthegreatestpotentialoftheothertwoaccounts

forcreditingalowerrate

5 Theseratesarehypotheticalandforillustrationpurposesonly.PastperformanceoftheS&P500IndexisnoguaranteeoffuturechangesintheS&P500IndexoroffutureindexedinterestearningsofLincoln New DirectionsSM.

6 Interestrates,specifiedrates,andindexedinterestcapsaredeclaredbyTheLincolnNationalLifeInsuranceCompanyatitsdiscretion.Subsequentinterest

rates,specifiedrates,andindexedinterestcapsmaybehigherorlowerthantheinitialonesandmaydifferfromthoseusedfornewcontractsorcontractsissuedatdifferenttimes.TheLincolnNationalLifeInsuranceCompanyreservestherightnottooffertheindexedaccountsafterthesurrenderchargeperiod.

Index%change

Indexedcredit%

Endingaccountvalue

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Two-yearindexedterm

Is there opportunity for growth if the indexed accounts repeatedly earn 0%?

TheGuaranteedMinimumCashSurrenderValue(GMCSV)isadditionalprotectionwhenyouhaveminimalornogainsinyourcontractvalue(alsoknownasaccumulationvalue).Ifyousurrenderyourcontract,youwillreceivethegreaterofyouractualcontractvalue,lessanyapplicablesurrenderchargeandMarketValueAdjustment,ortheGMCSV.WithdrawalsandsurrenderchargeswillaffecttheGMCSVandcanresultintheGMCSVbeinglessthanyourpremium.TheGMCSVisbasedonaguaranteedminimumfixedinterestrate,whichrangesfrom1%–3%andvariesbycontractyear.Soaslongasyouleaveyourmoneyinthecontractuntiltheendofthesurrenderchargeperiod,youareguaranteedtoreceivenolessthanyourpremium7withinterestattheguaranteedminimumfixedinterestrate,eveniftheindexedaccountsrepeatedlyearn0%.

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7Reducedbyanyapplicablepremiumtax.

Income options

What if I need to access my money?Lincoln New DirectionsSMoffersawithdrawalprovisionintheeventthatyouneedaccesstoyourmoney:

•10%ofyourcontractvalueisavailabletoyoueachcontractyearduringthesurrenderchargeperiod,withoutincurringcharges.Thisisreferredtoasthe10%annualfreewithdrawal.

•Ifyouareconsideringtakingyour10%annualfreewithdrawal,youshouldplacethatportionofyourmoneyintheFixedAccount.Amountswithdrawnfromanindexedaccountbeforetheendofatermwillnotreceiveanyinterestforthatterm.

• Anywithdrawalsinexcessofthe10%annualfreewithdrawalwillbesubjecttoapplicablesurrenderchargesandaMarketValueAdjustment.Withdrawalsaresubjecttoincometaxesand,ifwithdrawnbeforeage59½,a10%federalpenaltytaxmayapply.

What if I decide I need regular income?ThereareseveraloptionsforyoutotakeincomefromyourLincoln New Directions contract.

Systematic withdrawals Youhavetheoptionoftakingsystematicwithdrawalseitherannually,semiannually,quarterly,ormonthly.AnysystematicwithdrawalsmustbetakenfromtheFixedAccount.

Annuitization YoucanannuitizeyourLincoln New Directionscontractafterthesecondcontractyear,convertingittoanincomestreambackedbyTheLincolnNationalLifeInsuranceCompany.YoucanannuitizeacontractpurchasedinFloridaafterthefirstcontractyear.Thereareseveralannuitizationoptionsavailable,includingoneprovidingincomeforyourlifetime.

Market Value Adjustment

What is it and when does it apply?Ifyouaccessmorethanthe10%annualfreewithdrawalbeforetheendofthesurrenderchargeperiod,itmaybesubjecttosurrenderchargesandaMarketValueAdjustment(MVA).TheMVAisapositiveornegativeadjustment,basedonthecurrentinterestrateenvironmentatthetimeofthesurrender.TheMVAdoesnotapplyto:withdrawalsafterthesurrenderchargeperiod,10%annualfreewithdrawals,thedeathbenefit,annuitizedcontracts,andcontractsissuedinthestateofMinnesota.

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Protection

Does Lincoln New Directions SM offer death benefit protection?Yes.Lincoln New Directionsoffersadeathbenefit,availablebeforethecontractisannuitized.Uponthedeathofacontractownerorannuitant,beneficiariesmayreceivethegreaterofthe:

•Contractvalue,or

•Premiumpaid,minusanypriorsurrendersandsurrendercharges,accumulatedattheguaranteedminimumfixedinterestrate.ThisisalsoknownastheGuaranteedMinimumNon-SurrenderValue.

Thedeathbenefitispayabledirectlytothecontractbeneficiaries,whichavoidsthepossibledelaysofprobate.Thedeathbenefitissubjecttoanyapplicabletaxes.

Can I access my money if my health becomes a concern?Yes.Lincoln New Directionsfeaturesnursinghomeandterminalillnessbenefits(providedthroughriders).Thesebenefitsofferaccesstoyourmoneywithoutchargesafterthefirstcontractyear,ifacontractownermeetsoneofthefollowingconditions:

•Firstdiagnosedwithaterminalillnessafterthecontractissuedate;or

•Confinedtoanursinghomeorhospitalforatleast30consecutivedays,beginningafterthefirstcontractanniversary.

SeetheDisclosureStatementfornecessaryrequirementsandadditionaldetails.ThenursinghomebenefitisnotavailableforcontractsissuedinthestateofMassachusetts.

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Other Lincoln New DirectionsSM information

Contractissue:Lincoln New Directionsfixedindexedannuityisissuedfourtimesamonth.Interestiscalculatedandcreditedfromthedatethecontractisissued.Nointerestiscreditedbetweenthedatethepremiumisreceivedandthedatethecontractisissued.

Allocations:WhenyoupurchaseLincoln New Directionsyoucandecidewhatwholepercentagesofyourmoneytoplaceineachaccount.Eachyear,afterthecontractanniversarydate,duringthe25-dayreallocationperiod,youwillbesentaReallocationNoticealongwithyourannualStatementofAccount.YourReallocationNoticewillincludethefixedinterestrate,specifiedrate,andcapforeachoftheaccountsavailableduringtheyear.Whenyoureceiveyournotice,aftertheendoftheindexedterm,youmaymoveyourmoneybetweentheavailableaccountspriortotheendofthe25-dayreallocationperiod.Thereallocationwillbeeffectiveasofthecontractanniversarydate.

Withdrawals:Whenyouaccessmoney,withdrawalsandanychargesaredeductedfirstfromtheFixedAccount.AnywithdrawalstakenfromtheFixedAccountwillreducetheactualamountofinterestcredited.AftertheFixedAccountisexhausted,withdrawalsandanychargesaredeductedpro-ratafromtheindexedinterestaccounts.Ifwithdrawalsaretakenfromanindexedinterestaccount,theamountwithdrawnwillnotreceiveanyindexedinterestforthatterm.

Righttocancel:Youhavearighttocancelyour Lincoln New Directions annuitycontractwithin20daysafteryoureceiveyourcontract(statevariationsapply).Tocancelyourcontract,sendawrittenrequestforcancellationtoTheLincolnNationalLifeInsuranceCompany’shomeoffice.Wewillreturnyourpremiumpaiduponreceiptofyourwrittenrequest.Cancelingyourcontractvoidsitfromthebeginning.Ifyoucancelyourcontract,youwillnotbepermittedtopurchaseanotherLincolnfixedannuityproductforaperiodofsixmonths.

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Important disclosures. Please read.

ThereisnoadditionaltaxdeferralbenefitforannuitycontractspurchasedinanIRAorothertax-qualifiedplan,sincethesearealreadyaffordedtax-deferredstatus.Therefore,anannuityshouldonlybepurchasedinanIRAorqualifiedplaniftheclientvaluessomeoftheotherfeaturesoftheannuity.

LincolnNewDirectionsSMsinglepremiumdeferredannuity(contractform94-523,orstatevariation)isafixedindexedannuityissuedbyTheLincolnNationalLifeInsuranceCompanyandmaynotbeavailableinallstates(maybereferredtoas“equityindexedannuity”incertainstates).ThecontractmaybesubjecttoaMarketValueAdjustment.Contractmaybereferredtoas

“certificate”incertainstates.ThecertificateisagroupannuitycertificateissuedunderagroupannuitycontractissuedbyTheLincolnNationalLifeInsuranceCompanytoagroupannuitytrust.

WaiverofSurrenderChargesforNursingHomeConfinementRiderandWaiverofSurrenderChargesforTerminalIllnessRider(formAE-119andformAE-170,respectively,orstatevariation)maynotbeavailableinallstates.

Theexacttermsoftheannuityarecontainedinthecontractsandanyattachedriders,whichwillcontrolTheLincolnNationalLifeInsuranceCompany’scontractualobligations.Forcompleteinformationabouttheannuity,pleasealsoreadtheDisclosureStatementandFacts-At-A-Glance,orcontactyourLincolnNationalLifeInsuranceCompanyrepresentative.

“Standard&Poor’s®”and“S&P500®”aretrademarksofTheMcGraw-HillCompanies,Inc.andhavebeenlicensedforusebyTheLincolnNationalLifeInsuranceCompany.TheLincolnNewDirectionsannuityisnotsponsored,endorsed,sold,orpromotedbyStandard&Poor’s,andStandard&Poor’smakesnorepresentationregardingtheadvisabilityofpurchasingthisAnnuity.

TheS&P500Indexisapriceindexanddoesnotreflectdividendspaidontheunderlyingstocks.

This material was prepared to support the promotion and marketing of an insurance product. Neither the insurance company, its distributors nor their respective employees and representatives 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. Clients should consult their own independent advisor as to any tax, accounting, or legal statements made herein.

www.LFG.com

©2007LincolnNationalCorporation

LincolnFinancialGroupisthemarketingnameforLincolnNationalCorporationanditsaffiliates.Affiliatesareresponsiblefortheirownfinancialandcontractualobligations.

LFD0612-2680FAX-0114-06RP02/07Order FA-CORE-NEW

A century of integrityAtLincolnFinancialGroup,wehavea100-year-oldheritageofhelpingpeoplefindsolutionstotheirfinancialchallenges.Asoneofthelargestfinancialservicescompaniesinthenation,weareaprovenindustryleaderinidentifyinganddeliveringsophisticatedfinancialstrategiesandproductsolutionsforthecreation,protection,andenjoymentofwealth.Wearecommittedtohelpingclientsredefinetheirretirementbecausewedon’tbelieveretirementisanend—it’sanopportunityforeveryonetostartdoingwhattheyweremeantforallalong.

The stability of The Lincoln National Life Insurance Company Acompany’spromisesareonlyasstrongasitsreputation,integrity,andfinancialstrength.TheLincolnNationalLifeInsuranceCompanyhasconsistentlyreceivedhighmarksfromindependentevaluatorsincludingA.M.Best,Fitch,Moody’s,andStandard&Poor’s.Theseratingsapplytotheclaims-payingabilityoftheinsurancecompany.

RatingsareasofApril2006.

Not a deposit

May go down in value

Not FDIC-insured Not insured by any federal government agency

Not guaranteed by any bank or savings association

A.M. Best A+(2ndhighestof16)

“Excellentfinancialstrength...strongabilitytomeettheirongoingobligationstopolicyholders.”

Fitch AA(3rdhighestof24)

“...reflectsthecompany’slong-standingcompetitiveposition.”

Moody’s Aa3(4thhighestof21)

“...offersexcellentfinancialsecurity.”

Standard & Poor’s

AA-(4thhighestof21)

“...arecognizedleaderinthehighincomemarket.”