SecProbe.io

CORRESP
1
filename1.htm

    Law Department

    The Lincoln National Life Insurance Company

    350 Church Street

    Hartford, CT 06103

    Carolyn E. Augur

    Assistant Vice President

    and Senior Counsel

    Phone: 860-466-1111

    Carolyn.Augur@LFG.com

    VIA Email & EDGAR

    April 17, 2020

    Alberto Zapata

    Senior Counsel

    Disclosure Review and Accounting Office

    Division of Investment Management

    Securities and Exchange Commission

    100 F Street, NE

    Washington, DC 20549-8629

    Re:            The Lincoln National Life Insurance Company

    Post-Effective Amendment No. 3

    File No. 333-231487

    Dear Mr. Zapata:

    This letter is in response to your comments received on April 13, 2020, with respect to the above referenced matter.

              1.

              COVID-19 Disclosure – Please consider whether Lincoln’s disclosures should be revised
                to include an indication that current market conditions could impact the markets of the indices Lincoln uses to calculate its obligations under the contract.  Further, considering that Lincoln’s obligations under the contract are based on
                its financial strength and that recent events could affect the company’s financial strength and claims paying ability, please consider whether additional disclosure is necessary.

    Response:  Lincoln refers the Staff to page 15 of the prospectus, which
      provides detailed disclosure on market risk and other risk factors with respect to the indices.  In addition, the prospectus includes detailed disclosure describing the Company’s financial strength and claims paying ability.

    In addition to those disclosures, Lincoln has added enhanced disclosure related to COVID-19, on page 17 and again on page 51 of the prospectus.

              2.

              Presentation of Examples – For both new and existing examples, please use defined terms
                in the tables and amend the amend to show Performance Trigger Rate in the calculation of Segment Maturity Rate.  Consider adding equations with the defined terms.

    Response:  The disclosure has been revised accordingly.

              3.

              Crediting Method – Consider adding an additional heading to the section on the bottom
                of page 21 where there is a discussion as to choices of crediting methods to separate it from the prior section titled “Indexed Segment with Annual Locks”.

    Response: Lincoln has added a heading titled “Crediting Method
      Considerations”.

    We will file revised prospectuses along with an updated consent in an upcoming POS AM filing. We will also submit a request to accelerate the
      effective date to May 1, 2020. Please call my mobile phone at (860) 335-4855 with questions or additional comments.

    Sincerely,

    Carolyn Augur

      Lincoln Level Advantage® B-Share Individual Variable and Index-Linked Annuity Contracts

          Lincoln Life Variable Annuity Account N

      May 1, 2020

      Home Office:

        The Lincoln National Life Insurance Company

        1300 South Clinton Street

        Fort Wayne, IN 46802

        www.LincolnFinancial.com

        1-877-737-6872

      This prospectus describes an individual flexible premium variable and index-linked deferred annuity contract issued by The
        Lincoln National Life Insurance Company (Lincoln Life or Company).

      This contract can be purchased as either a nonqualified annuity or qualified retirement annuity under Section 408 (IRAs) or 408A
        (Roth IRAs) of the tax code. Generally, you do not pay federal income tax on the contract's growth until it is paid out. You receive tax deferral for an IRA whether or not the funds are invested in an annuity contract. Further, if your contract is
        a Roth IRA, you generally will not pay income tax on a distribution, provided certain conditions are met. Therefore, there should be reasons other than tax deferral for purchasing a qualified annuity contract. We offer other types of annuity
        contracts that may offer different investment options, features, and optional benefits. You should carefully consider whether or not this contract is the best product for you.

      The contract is designed to accumulate Contract Value and to provide retirement income over a certain period of time or for life
        subject to certain conditions. The benefits offered under this contract may be a variable or index-linked amount or both. This contract also offers a Death Benefit payable upon the death of the Contractowner or Annuitant. This prospectus is used by
        both new purchasers and current Contractowners.

      This prospectus describes all material rights and obligations of annuity purchasers under the contract.

      The state in which your contract is issued will govern whether or not certain features, riders, restrictions, limitations,
        charges and fees will apply to your contract. All material state variations are discussed in this prospectus, however, non-material variations may not be discussed. You should refer to your contract regarding state-specific features. Please check
        with your registered representative regarding availability.

      The minimum initial Purchase Payment for the contract is $25,000. Additional Purchase Payments may be made to the contract,
        subject to certain restrictions, and must be at least $100 per payment ($25 if transmitted electronically), and at least $300 annually. We reserve the right to limit, restrict, or suspend Purchase Payments made to the contract upon advance written
        notice. Purchase Payments and Contract Value may be allocated to the Indexed Accounts only on the initial Start Date or Indexed Anniversary Date and must be at least $2,000.

      You choose whether to invest in variable investment options, in one or more index-linked accounts, or both.

      You invest in the index-linked portion of the contract by choosing one or more of the available Indexed Accounts. Indexed
        Accounts are established for either 1-, 3-, or 6-year terms, and the return on these accounts at the end of the term is based in part on the performance of a specified index. The gain for each Indexed Segment at the end of a term is determined
        using (i) a specified Performance Cap, which is the highest Performance Rate that we will credit (ii) a specified percentage of positive performance based on a Participation Rate, or (iii) a Performance Trigger Rate that provides a specified rate
        of return if the performance of the index is zero or positive depending on which crediting method you choose. Your Contract Value will not be impacted by any loss up to the applicable Protection Level if you hold for the length of the term. The
        returns on the 6-year Indexed Accounts are calculated either with an Annual Lock or without an Annual Lock. An Interim Value for each Indexed Segment is calculated each Valuation Date prior to the last day of the term.

      The Indexed Accounts of the contract are supported by the assets of a non-registered, non-insulated separate account of the
        Company which has been established to support the Company’s obligations with respect to the Indexed Accounts. The Indexed Accounts are not invested in any underlying fund. We do not guarantee how any of the Indexed
          Accounts will perform. There is a risk of loss of your investment because you agree to absorb all losses in excess of the level of protection you selected.

      Index-linked annuity contracts are complex insurance and investment vehicles. Investors should speak with a financial
        professional about the contract’s features, benefits, risks, and fees, and whether the contract is appropriate for the investor based upon his or her financial situation and objectives.

                14.

                The only available annuitization option for the Indexed Accounts is i4LIFE®
                  Indexed Advantage, which has an additional charge.

        Risks of Investing in the
          Subaccounts

                1.

                You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Subaccounts, which invest in corresponding underlying funds. If the Subaccounts you select make
                  money, your Contract Value goes up; if they lose money, your Contract Value goes down. How much it goes up or down depends on the performance of the Subaccounts you select.

                2.

                The dollar amount of the charge for certain optional Death Benefits may increase as your Contract Value increases.

                3.

                Your receipt of a Death Benefit over and above the amounts invested in the VAA is based on the claims paying ability and credit worthiness of Lincoln Life.

                4.

                Certain classes of funds are subject to risk factors as outlined below:

        a.
          Certain funds offered as part of this contract have similar investment objectives and policies to other portfolios managed by the adviser. The investment results of the funds, however, may be higher or lower than the other portfolios that are
          managed by the adviser or sub-adviser. There can be no assurance, and no representation is made, that the investment results of any of the funds will be comparable to the investment results of any other portfolio managed by the adviser or
          sub-adviser, if applicable.

        b.
          Certain funds invest their assets in other funds. As a result, you will pay fees and expenses at both fund levels. This will reduce your investment return. These arrangements are referred to as funds of funds or master-feeder funds, which may
          have higher expenses than funds that invest directly in debt or equity securities. An advisor affiliated with us manages some of the available funds of funds. Our affiliates may promote the benefits of such funds to Contractowners and/or suggest
          that Contractowners consider whether allocating some or all of their Contract Value to such portfolios is consistent with their desired investment objectives. In doing so, we may be subject to conflicts of interest insofar as we may derive
          greater revenues from the affiliated fund of funds than certain other funds available to you under your contract.

                5.

                Some of the underlying funds have reserved the right to temporarily or permanently refuse payments or transfer requests received from us, especially in cases of suspected market timing. To the extent permitted by
                  applicable law, we, in turn, reserve the right to defer or reject your transfer request at any time we are unable to redeem shares of an underlying fund.

                6.

                Annuity Payouts will fluctuate with the performance of the Subaccounts.

        Cyber Security and Business
          Interruption Risks

        We rely heavily on
          interconnected computer systems and digital data to conduct our annuity products business. Because our business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is
          vulnerable to disruptions from utility outages, and susceptible to operational and information security risks resulting from information systems failure (e.g., hardware and software malfunctions), and cyber-attacks. These risks include, among
          other things, the theft, misuse, corruption and destruction of data maintained online or digitally, interference with or denial of service, attacks on websites and other operational disruption and unauthorized release of confidential customer
          information. Such systems failures and cyber-attacks affecting us, any third-party administrator, the underlying funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Contract Value. For
          instance, systems failures and cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website or with the underlying funds, impact our ability to calculate Accumulation Unit value,
          cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational
          damage. Cyber security risks may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your contract to lose value. There can be no assurance that we or the underlying funds or our
          service providers will avoid losses affecting your contract due to cyber-attacks or information security breaches in the future.

        <R>
        In addition to cyber security
          risks, we are exposed to risks related to natural and man-made disasters and catastrophes, such as (but not limited to) storms, fires, floods, earthquakes, public health crises, malicious acts, and terrorist acts, any of which could adversely
          affect our ability to conduct business. A natural or man-made disaster or catastrophe, including a pandemic (such as COVID-19), could affect the ability or willingness of our employees or the employees of our service providers to perform their
          job responsibilities. Even if our employees and the employees of our service providers are able to work remotely, those remote work arrangements could result in our business operations being less efficient than under normal circumstances and
          could lead to delays in our processing of contract-related transactions, including orders from contract owners. Catastrophic events may negatively affect the computer and other systems on which we rely, impact our ability to calculate
          accumulation unit values, or have other possible negative impacts. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with natural and man-made disasters and catastrophes.

        </R>

        15

        Condensed Financial Information

        Appendix A to this prospectus
          provides more information about Accumulation Unit values.

        Investment Results for the VAA

        At times, the VAA may compare
          its investment results to various unmanaged indices or other variable annuities in reports to shareholders, sales literature and advertisements. The results will be calculated on a total return basis for various periods, with or without surrender
          charges. Results calculated without surrender charges will be higher. Total returns include the reinvestment of all distributions, which are reflected in changes in unit value. The money market Subaccount's yield is based upon investment
          performance over a 7-day period, which is then annualized.

        There can be no assurance that
          a money market fund will be able to maintain a stable net asset value of $1.00 per share. During periods of low interest rates, the yield of a money market fund may become extremely low and possibly negative. In addition, if the yield of a
          Subaccount investing in a money market fund becomes negative, due in part to Contract fees and expenses, your Contract Value may decline. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance
          Corporation or any other government agency. The sponsor of a money market fund has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
          If, under SEC rules, a money marke