SecProbe.io

Via Facsimile and U.S. Mail Mail Stop 6010                                                                                                   April 21, 2009   Frederick J. Crawford Executive Vice President and CFO Lincoln National Corporation 150 N. Radnor Chester Road Suite A305 Radnor, PA 19087
Re:      Lincoln National Corporation
Form 10-K for the Fiscal Year Ended December 31, 2008
 File No. 1-06028

Dear Mr. Crawford:
We have reviewed your filing and have the following comments.  In our
comments, we ask you to provide us with  information to better understand your
disclosure.  Where a comment requests you to  revise disclosure, the information you
provide should show us what the revised disc losure will look like and identify the annual
or quarterly filing, as appli cable, in which you intend to fi rst include it.  If you do not
believe that revised disclosure  is necessary, explain the reason in your response.  After
reviewing the information provided, we may raise additional comments and/or request
that you amend your filing.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.
 Item 1.  Business, page 1

 Reinsurance, page 19

1. You disclose that Swiss Re represents  your largest reinsu rance exposure. In
addition, on page 40 you disclose that “a reinsurer’s insolven cy, inability or
unwillingness to make payments under th e terms of a reinsurance contract,
especially Swiss Re, could have a mate rial adverse effect on our results of

Mr. Frederick J. Crawford
Lincoln National Corporation April 21, 2009 Page 2
 operations and financial condi tion.”  It appears that the reinsurance agreement
with Swiss Re is material to  your business.  Please revi se to provide a description
of each of the material te rms of the agreement, including, but not limited to any
payment provisions, rights obtained, material obligations that must be met to keep
the agreement in place, term and termina tion provisions.  In addition, please file a
copy of the agreement as an exhibit.  Alternatively, please provide us with a
detailed analysis which supports your apparent conclusion that you are not
substantially dependent on this rein surance agreement pursuant to Item
601(b)(10)(ii)(B) of Regulation S-K.
 Item 1A.  Risk Factors, page 28

2. You state on page 143 that you anticipate that “unless market conditions improve,
the dividend capacity of our insurance subsidiaries will be substantially constrained in 2009.”  Please revise to in clude a risk factor which appropriately
discloses the risks associated with your  holding company struct ure and the ability
of your operating subsidiaries to divide nd payments to you. Also, consider the
need to expand the disclosure on page 143 to include the consequences that a
constrained dividend capacity of your in surance subsidiaries in 2009 could have
on your financial position, results of opera tions and cash flows as may be required
by Financial Reporting Codi fication Section 501.02.

Critical Accounting Policies and Estimates

Investment Valuation, page 61
3. You disclose that you use pricing servi ces and broker quotes to estimate fair
value.  To the extent third parties are used  to assist in the determination of fair
value, please revise your disclo sure to address the following:

• The number of quotes or prices you gene rally obtained per instrument, and if
you obtained multiple quotes or prices, how you determined the ultimate value used in your financial statements; and
• The extent to which third parties are ga thering observable market information
as opposed to using unobservable inputs and/or proprietary models in making
valuation judgments and determinations.

Guaranteed Living Benefits, page 64

4. Your exposure to variable annuities that contain a guaranteed withdrawal benefit,
after reinsurance, increased from $8 8 million as of December 31, 2007 to $5
billion as of December 31, 2008.  Please revise your disclosures as follows:

• Disclose the guaranteed amounts before th e consideration of any reinsurance;
and

Mr. Frederick J. Crawford
Lincoln National Corporation April 21, 2009 Page 3
 • Disclose the nature of your models, es timates of future cash flows, market-
consistent scenarios selected and ot her relevant assumptions used in
estimating the fair value of the guarant eed withdrawal benefit liability.

Results of Retirement Solutions

Future Expectations, page 75

5. Your fixed annuity business includes products  with credit rates that are reset on
an annual basis.   You disclose th at the average crediting rates were
approximately 51 basis points in excess of average minimum guaranteed rates.
Please quantify and provide additional di sclosure regardi ng your increased
exposure to losses due to the difference between average crediting rates and the
average minimum guaranteed rates for the current period.  For example, disclose the notional amount of these annuity cont racts and the maximum basis points for
which you could be exposed. Please also disc lose the combination of rate actions
and portfolio management that you expect to undertake to manage the effects of
credit spreads on near-term income from operations.

Results of Insurance Solutions

Comparison of 2008 to 2007, page 88
6. Please disclose what you mean by “stranger-originate d life insurance
characteristics” and why these characteristic s generate lower returns.  Please also
disclose why you do not believe that thes e policies will have a material impact on
profitability given your disclosures th at you cannot accurately identify these
policies.

Results of Lincoln UK
Income from Operations, page 102

7. You disclose that the increase in income from operations was partially offset by
an increase in our mis-selling reserves.  Please revise your disclosures to clarify
what you mean by a decrease in income fr om operations due to “an increase in
mis-selling reserves.”
 Realized Gain (Loss)

Comparison of 2008 to 2007, page 109

8. You disclose that as account values d eclined, the characteristics of certain
Guaranteed Income Benefit features shifted towards insurance benefits as
opposed to embedded derivatives.  Please di sclose why a decline in the capital
markets would shift Guaranteed Income  Benefit features toward insurance
benefits and the nature of th e features that contribute to this shift in benefits.

Mr. Frederick J. Crawford
Lincoln National Corporation April 21, 2009 Page 4
 Operating Realized Gain, page 110

9. Please disclose what “other amortiza tion” represents for your GLB and GDB
indexed annuity products in your table and the reasons for the increased amortization.
 GLB Net Derivatives Results and GDB Derivative Results, page 112

10. Please disclose what “other amortiza tion” represents for your GLB and GDB
annuity products in your table and the reasons for the increased amortization.
 GLB Net Derivative Results, page 112

11. You disclosed that the change in NPR (non-performance risk) resulted in the
reduction of your guaranteed living benefits liabilities by $640 million since January 1, 2008.  Please disclose the following:

• The change in your credit rating and th e increase in your cr edit spreads that
resulted in a gain of $640 million due to non-performance risk;
• The model and assumptions used to determine the non-performance risk
adjustment; and
• A sensitivity analysis of reasonably likely changes in your non-performance
credit risk given the significant estimat es and management judgment involved
in the computation.

Note 4 – Variable Interest Entities

Affiliated Trust, page 186

12. Considering the fact that the company gua rantees the obligations of the trust,
please tell us why the company does not have  exposure to loss from the trust and
why the trust is not consolidated.
 Note 5 – Investments

Available-for-sale Securities, page 187

13. You disclose that mortgage-backed securi ties represent $10.1 billion of your fixed
income securities.  Please revise your disc losures to discuss the level of recent
cash flows compared to the projecte d cash flows underlying your mortgage-
backed securities when the transactions were originated.  In those cases where the monthly cash flows during the fourth qua rter are materially lower than the
originally projected cash flows please tell us the factors considered in concluding
that the investments are not impaired.

Mr. Frederick J. Crawford
Lincoln National Corporation April 21, 2009 Page 5
 14. You disclose that overall market conditions  in both the equity and credit markets
caused your alternative inve stments portfolio, which consists mostly of hedge
funds and various limited partnership i nvestments, to under-perform relative to
your long-term expectations, and that you e xpect these assets to under-perform at
least in the short term.  Please enhance your disclosure s with respect to limited
partnership investments as follows:

• Disclose the amounts allocated to each  respective investment strategy;
• Provide a more robust description of each investment strategy;
• Disclose how you determine fair value for your hedge funds and limited
partnership investments; and
• Provide a sensitivity analysis that reas onably likely changes in assumptions
could have on your returns on your hedge funds and limited partnership
investments.
 Credit-Linked Notes, page 193

15. You recognized unrealized losses of $550 million on $600 m illion in credit-linked
notes as of December 31, 2008.  Please di sclose the following regarding your
assessment that the securities were not other-than-temporarily impaired as of
December 31, 2008:

• The original and year-end  level of subordination;
• The dollar amount of underlying collatera l pool by credit rating from Aaa to
Caa1; and
• The factors that you considered when you feel the remaining subordination is
sufficient to absorb future credit losses , subject to changing market conditions.
Please also clarify what “subject to  changing market conditions” means.

Note 6 – Derivative Instruments
Interest Rate Swap Agreements, page 198
16. You disclose on page 198 that  interest rate sw ap agreements to hedge exposure to
floating rate bond payments and fixed ra te bond coupon payments are reported in
investment income.  However, in the ta ble on page 197 you disclose that interest
rate swap agreements are reported in net re alized gain (loss) in  your statements of
income.  Please tell us how you classified gains and losses on interest rate swap
agreements in your statements of income over each of the last three years.  Please also revise your disclosures so th at your accounting po licy regarding the
classification of gains and lo sses on interest rate swap agreements is internally
consistent.

Derivative Instruments Designated as Fair Value Hedges, page 199

Mr. Frederick J. Crawford
Lincoln National Corporation April 21, 2009 Page 6
 17. You employed an equity collar on 4 million shares of your Bank of America stock
holdings.  Due to the decline in the valu e of Bank of America’s stock you appear
to be in a gain or receivable position on the put option leg of the equity collar.
Please disclose the dollar amount due from  the counterparty to the transaction,
when you expect to receive the amounts due  from the counterpa rty and the credit
rating of the counterparty.

Credit Risk, Page 202

18. You disclose a non-performance risk adju stment of $20 milli on in the event of
nonperformance by counterparties on various  derivative contract s as of December
31, 2008.  Please disclose the assumptions a nd factors considered in determining
the amount of the credit or non- performance risk adjustment.
 Note 7 – Federal Income Taxes, page 203

19. You disclose that no valuation allowan ce is necessary on th e $1.8 billion in net
deferred tax assets recorded in 2008.  Pl ease disclose within  MD&A all of the
positive and negative factors that you considered, and the reason that you
concluded that it is more likely than not that the $1.8 billion in deferred tax assets
will be recovered.  Please refer to paragraphs 20-25 of SFAS 109.

*      *      *

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.  Please furnish a letter that  keys your response to our
comments and provide the requested information.  Detailed letters gr eatly facilitate our
review.  Please furnish the letter to us via EDGAR under the form type label CORRESP.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:  ‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
‚ the company may not assert staff comments as a defense in any proceeding initiated

Mr. Frederick J. Crawford
Lincoln National Corporation April 21, 2009 Page 7
 by the Commission or any person under the federal securities laws of the United
States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
Please contact Sasha Parikh, Staff A ccountant, at (202) 551-3627 or Gus
Rodriguez, Accounting Branch Chief, at ( 202) 551-3752 if you have questions regarding
the processing of your response as well as  any questions regarding comments on the
financial statements and related matters.   You may contact Jennifer Riegel, Staff
Attorney, at (202) 551-3575 or Jeffrey Ried ler, Assistant Director, at (202) 551-3715
with questions on any of the othe r comments. In this regard, do not hesitate to contact me
at (202) 551-3679.
 Sincerely,

Jim B. Rosenberg Senior Assistant Chief Accountant