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    Lincoln
National Corporation

    150 N.
Radnor-Chester Road

    Radnor,
PA  19087

    phone
484-583-1430

    October
29, 2009

    Mr. Jim
Rosenberg

    Senior
Assistant Chief Accountant

    Securities
and Exchange Commission

    100 F.
Street, N.E.

    Washington,
D.C. 20549

    Re:  Lincoln
National Corporation

    Form 10-Q for the Quarter Ended June
30, 2009

    Form 8-K filed July 10,
2009

    Form 8-K filed August 19,
2009

    File No. 1-06028

    Dear Mr.
Rosenberg:

    This
letter is in response to the staff of the Division of Corporation Finance’s (the
“Staff”) letter of October 1, 2009, concerning Lincoln National Corporation’s
(“LNC” or the “Company”) Form 10-Q for the Quarter ended June 30, 2009, Form 8-K
filed July 10, 2009, and Form 8-K filed August 19, 2009.  Our reply
refers to the specific comments in the Staff’s letter.  In responding
to the Staff’s comments, we acknowledge the following:

              ·

              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 by the Commission or any person under the federal securities
      laws of the United States.

    The
following are the Staff’s comments and our responses:

    Form
10-Q for the quarter ended June 30, 2009

              Consolidated
      Statements of Cash Flows, page
4

              1.

              You
      disclose the increase in payables for collateral under securities loaned
      and derivatives in one line item.  Based on the significance of
      the collateral posted under these arrangements and the unrelated nature of
      these activities please disclose the increase (decrease) in payables for
      collateral under securities loaned in one line item and the increase
      (decrease) in payable for collateral related to derivative transactions in
      another line item.

          Page
2

          October
29, 2009

          Re:
Lincoln National Corp

    Response:

    We
believe it is appropriate to have this in only one line, as the derivatives
portion relates only to our derivative investments.  Accordingly,
beginning with the Form 10-Q for the quarter ended September 30, 2009, we will
change the description of the line on our statements of cash flows previously
called “Increase (decrease) in payables for collateral under securities loaned
and derivatives” to “Increase (decrease) in payables for collateral on
investments.”

              2.

              Please
      tell us the factors that you considered in classifying collateral received
      or posted on your derivative transactions as investing cash flows since it
      appears that many of your derivatives transactions appear to be related to
      your annuity and life insurance operations.  Please also tell us
      how you classified collateral posted on credit default swap transactions
      in your statements of cash flows.

    Response:

    As
discussed in our response to comment #1, all collateral received or posted on
our derivative transactions relate only to our derivative
investments.  Since changes in our derivative investments is reflected
within investing cash flows we believe that it is appropriate to reflect these
changes in collateral received or posted within investing cash flows as
well.  In response to the Staff’s comment in our notes to the
financial statements, beginning with our Form 10-Q for the quarter ended
September 30, 2009, we will include the following:

    Payables
for Collateral on Investments

    When we
enter into collateralized financing transactions on our investments a liability
is recorded equal to the cash collateral received.  This liability is
included within payables for collateral on investments on our Consolidated
Balance Sheets.  Income and expenses associated with these
transactions are recorded as investment income and investment expenses within
net investment income on our Consolidated Statements of
Income.  Changes in payables for collateral on investments are
reflected within cash flows from investing activities on our Consolidated
Statements of Cash Flows.

    The
carrying values of the payables for collateral on investments (in millions) and
the fair value of the related investments included on our Consolidated Balance
Sheets consisted of the following:

              As
      of June 30, 2009

              As
      of December 31, 2008

              Carrying

              Fair

              Carrying

              Fair

              Value

              Value

              Value

              Value

              Collateral
      payable held for derivative investments (1)

            $
            738

            $
            738

            $
            2,826

            $
            2,826

              Securities
      pledged under securities lending agreements (2)

            437

            420

            427

            410

              Securities
      pledged under reverse repurchase agreements (3)

            346

            366

            470

            496

              Securities
      pledged for Treasury Asset-Backed Securities

               Loan
      Facility ("TALF") (4)

            139

            154

            -

            -

              Securities
      pledged for Federal Home Loan Bank of

              Indianapolis
      Securities ("FHLBI") (5)

            100

            113

            -

            -

              Collateral
      posted on credit default swaps (6)

            (48
            )

            (48
            )

            (17
            )

            (17
            )

              Total
      payables for collateral on securities

            $
            1,712

            $
            1,743

            $
            3,706

            $
            3,715

          Page
3

          October
29, 2009

          Re:
Lincoln National Corp

              (1)

              We
      obtain collateral based upon contractual provisions with our
      counterparties.  These agreements take into consideration the
      counterparties’ credit rating as compared to ours, the fair value of the
      derivative investments and specified thresholds that once exceeded result
      in the receipt of cash that is typically invested in cash and invested
      cash.

              (2)

              Our
      pledged securities under securities lending agreements are included in AFS
      fixed maturity securities on our Consolidated Balance
      Sheets.  We generally obtain collateral in an amount equal to
      102% and 105% of the fair value of the domestic and foreign securities,
      respectively.  We value collateral daily and obtain additional
      collateral when deemed appropriate.  The cash received in our
      securities lending program is typically invested in cash equivalents,
      short-term investments or fixed maturity
  securities.

              (3)

              Our
      pledged securities under reverse repurchase agreements are included in AFS
      fixed maturity securities on our Consolidated Balance
      Sheets.  We obtain collateral in an amount equal to 95% of the
      fair value of the securities, and our agreements with third parities
      contain contractual provisions to allow for additional collateral to be
      obtained when necessary.  The cash received in our reverse
      repurchase program is typically invested in fixed maturity
      securities.

              (4)

              Our
      pledged securities for TALF are included in AFS fixed maturity securities
      on our Consolidated Balance Sheets.  We obtain collateral in an
      amount that has typically averaged 90% of the fair value of the TALF
      securities.  The cash received in these transactions is invested
      in AFS fixed maturity securities.

              (5)

              Our
      pledged securities for FHLBI are included in AFS fixed maturity securities
      on our Consolidated Balance Sheets.  We generally obtain
      collateral in an amount equal to 85% and 95% of the fair value of the fair
      value of the FHLBI securities.  The cash received in these
      transactions is typically invested in cash and invested cash or AFS fixed
      maturity securities.

              (6)

              Our credit default swaps, for
      which we have posted collateral, hedge items included in investments on
      our Consolidated Balance Sheets.  See Note 6 for additional
      details.

    Increase
(decrease) in payables for collateral on securities (in millions) included in
the Consolidated Statements of Cash Flows consisted of the
following:

              For
      the Six Months

              Ended
      June 30,

              2009

              2008

              Collateral
      payable held for derivative investments

            $
            (2,088
            )

            $
            408

              Securities
      pledged under securities lending agreements

            10

            -

              Securities
      pledged under reverse repurchase agreements

            (124
            )

            (53
            )

              Securities
      pledged for TALF

            139

            -

              Securities
      pledged for FHLBI

            100

            -

              Collateral
      posted on credit default swaps

            (31
            )

            -

              Total
      increase (decrease) in payables for collateral on
    securities

            $
            (1,994
            )

            $
            355

    Note
5.  Investments, page 14

              3.

              The
      last paragraph of your disclosure on page 17 states “To the extent that
      the security has already been impaired…no impairment is
      required.”  Please revise to clarify what you mean by this
      statement.  If a subsequent impairment analysis indicates that
      the principal of a particular security will not be realized, an additional
      impairment should be recognized regardless of any prior
      impairment.

    Response:

    To
address the Staff’s comment, we will update our disclosures in future filings,
beginning with our Form 10-Q for the quarter ended September 30, 2009, to state
the following:

    To the
extent that the security has already been impaired or was purchased at a
discount, such that the amortized cost of the security is less than or equal to
the present value of cash flows expected to be collected, no impairment is
required.

            Page
4

            October
29, 2009

            Re:
Lincoln National Corp

              4.

              Please
      revise your disclosure with regards to the methodology and significant
      inputs, by security type, which you use to determine the amount of credit
      loss on page 21 to quantify the significant inputs used to measure the
      amounts of your credit losses.  Please see paragraph 42 of FSP
      FAS 115-2 and FAS 124-2.

    Response:

    To
address the Staff’s comments, we will update our disclosures in future filings,
beginning with our Form 10-Q for the quarter ended September 30, 2009, by adding
the following or something similar, to these disclosures:

    Determination
of Credit Losses on Corporate Bonds

    As of
June 30, 2009, we reviewed our corporate bond portfolio for potential shortfall
in contractual principal and interest based on numerous subjective and objective
inputs.  Due to the variety of factors for each individual corporate
bond, which are used in the determination of the potential shortfall in
contractual principal and interest, including, but not limited to, near term
risk, substantial discrepancy between book and market value, sector or
company-specific volatility, negative operating trends and trading levels wider
than peers we can not quantify the significant inputs used to measure the
amounts of credit losses.

    Determination
of Credit Losses on MBS

    As of
June 30, 2009, default rates were projected by considering underlying MBS loan
performance and collateral type.  Projected default rates on existing
delinquencies vary between 25% to 100% depending on loan type and severity of
delinquency status.  In addition, we estimate the potential contributions
of currently performing loans that may become delinquent in the future based on
the change in delinquencies and loan liquidations experienced in the recent
history.  Finally, we develop a default rate timing curve by
aggregating the defaults for all loans (delinquent loans, foreclosure and real
estate owned and new delinquencies from currently performing loans) in the pool
to project the future expected cash flows.

    We use
certain available loan characteristics such as lien status, loan sizes and
occupancy to estimate the loss severity of loans.  Second lien loans
are assigned 100% severity if defaulted.  For first lien loans, we
assume a minimum of 30% loan severity with higher severity assumed for investor
properties and/or further housing price depreciation.

              5.

              You
      disclose unrealized investment losses of $542 million on commercial
      mortgage-backed securities, $509 million on hybrid and redeemable
      preferred securities and $381 million on corporate loan
      obligations.  Please disclose why you did not recognize
      other-than-temporary-impairment losses given the significance of the
      declines in the market values of these securities.  Please refer
      to paragraph 38 of FSP FAS 115-2 and FAS
124-2.

    Response:

    In our
response to #4 we added discussion related to the significant inputs used to
measure the amounts credit losses on MBS, which include commercial mortgage
backed-securities.  In addition, we believe we adequately disclosed
why we did not recognize other-than-temporary impairment (“OTTI”) losses on our
unrealized losses on commercial mortgage-backed securities and hybrid and
redeemable preferred securities on page 19, where we stated the
following:

    We
believe that the securities in an unrealized loss position as of June 30, 2009,
were not other-than-temporarily impaired as we do not intend to sell these debt
securities or it is not more likely than not that we will be required to sell
the debt securities before recovery of their amortized cost basis, and we have
the ability and intent to hold the equity securities for a period of time
sufficient for recovery.

            Page
5

            October
29, 2009

            Re:
Lincoln National Corp

    In
addition, we believe we adequately discussed why we did not recognize OTTI
losses on our unrealized losses on credit-linked notes (“CLNs”) on pages 22 and
23.

              6.

              Refer
      to the table of changes in the amount of credit loss of OTTIs recognized
      in net income (loss) where the portion related to other factors was
      recognized in OCI.

              ·

              You
      disclose credit losses on securities for which an
      other-than-temporary-impairment was not previously recognized of $95
      million for the six months ended June 30, 2009 ($72 million recognized
      during the quarter ended March 31, 2009 and $23 million in the quarter
      ended June 30, 2009).  Please disclose the factors that
      contributed to these credit losses that had not been previously
      recognized, including changes in assumptions or performance indicators of
      the underlying assets.

              ·

              With