Correspondence 0000726865-24-000129 from LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N (CIK 0001048606)
LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N (CIK 0001048606)
Date: March 27, 2024 · CIK: 0001048606 · Accession: 0000726865-24-000129
AI Filing Summary & Sentiment
File numbers found in text: 333-212682
Letter
Division of Investment Management Re: The Lincoln National Life Insurance Company Lincoln National Variable Annuity Account N Post-Effective Amendments No. 16 File No. 333-212682
Dear Mr. Zapata:
This letter provides our response to comments received by telephone on March 19, 2024, regarding the above-referenced filing. The attached blacklined prospectus reflects the changes we have made to address your comments.
1.
Key Information Table: Consider including whether any restrictions should be noted in the Table with the addition of the Guarantee of Principal death benefit.
Response: We believe that restrictions relevant to the Guarantee of Principal benefit are covered adequately in the Key Information Table. Additionally, we note a minor change in the Key Information Table under Optional Benefits, where we have changed the fifth bullet point to read “If you elect certain optional benefits, you may be limited in the amount of Purchase Payments that you can make (and when).” The language was made more generic so that it will apply to “optional benefits” where it previously applied to the “Earnings Optimizer Death Benefit”.
2.
Death Benefits – Guarantee of Principal Death Benefit - Availability: The last two paragraphs, which depict two different scenarios that can be elected un the GOP death benefit, do not read clearly. Consider re-writing the paragraphs and consider sub-headings.
Response: We have revised the paragraphs in this section and the section that follows (Earnings Optimizer Death Benefit) as follows:
If the Beneficiary is the spouse of the Contractowner, the surviving spouse may elect to continue the Contract in one of two ways:
•
Continue the Contract – No increase in Contract Value: The surviving spouse may elect to continue the Contract as the new Contractowner without taking an increase in Contract Value, and the spouse may continue the Guarantee of Principal Death Benefit with no change in the way it is calculated. The rider charge rate that was in effect immediately prior to the death will continue to apply.
•
Continue the Contract – Increase in Contract Value. The surviving spouse may elect to continue the Contract as the new Contractowner and elect to have a portion of the Death Benefit credited to the Contract and increase the Contract Value. Any portion of the Death Benefit that would have been payable (if the Contract had not been continued) that exceeds the current Contract Value on the Valuation Date we approve the claim will be added to the Contract Value. If the Contract is continued in this way, the Guarantee of Principal Death Benefit rider and charge will terminate, and the spouse will have the Contract Value Death Benefit.
Lastly, on page 16, in the Guarantee of Principal charge section, we removed “and is added to your base contract expense” at the end of the first sentence, as it was a redundancy (it is included in the final sentence of the paragraph).
The effective date for Post-Effective Amendment No. 16 will continue to be delayed until May 1, 2024, with filings under Rule 485BXT (Post-Effective Amendments 17 & 18).
On April 10, we will submit a new filing under Rule 485(a) (Post-Effective Amendment No. 19) which will serve as a “template” filing pursuant to Rule 485(b)(1)(vii). Subsequently, we intend to file a request, pursuant to Rule 461 for an accelerated effective date of May 1, 2024, for Post-Effective Amendment No. 19.
We sincerely appreciate your attention to this filing, and your review and comments. Please call me at 860-466-1111 with any questions or additional comments.
Sincerely,
Carolyn Augur
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filename1.htm
Law Department
The Lincoln National Life Insurance Company
350 Church Street
Hartford, CT 06103
Carolyn Augur
Assistant Vice President
and Senior Counsel
Phone: 860-466-1111
Carolyn.Augur@LFG.com
VIA Email & EDGAR
March 27, 2024
Alberto Zapata
U.S. Securities and Exchange Commission
Division of Investment Management
Disclosure Review and Accounting Office
100 F Street, NE
Washington, DC 20549
Re: The Lincoln National Life Insurance Company
Lincoln National Variable Annuity Account N
Post-Effective Amendments No. 16
File No. 333-212682
Dear Mr. Zapata:
This letter provides our response to comments received by telephone on March 19, 2024, regarding the above-referenced filing. The attached blacklined prospectus
reflects the changes we have made to address your comments.
1.
Key Information Table: Consider including
whether any restrictions should be noted in the Table with the addition of the Guarantee of Principal death benefit.
Response: We believe that restrictions relevant to the
Guarantee of Principal benefit are covered adequately in the Key Information Table. Additionally, we note a minor change in the Key Information Table under Optional Benefits, where we have changed the fifth bullet point to read “If you elect certain
optional benefits, you may be limited in the amount of Purchase Payments that you can make (and when).” The language was made more generic so that it will apply to “optional benefits” where it previously applied to the “Earnings Optimizer Death
Benefit”.
2.
Death Benefits – Guarantee of Principal Death Benefit -
Availability: The last two paragraphs, which depict two different scenarios that can be elected un the GOP death benefit, do not read clearly. Consider re-writing the paragraphs and consider sub-headings.
Response: We have revised the paragraphs in this section and
the section that follows (Earnings Optimizer Death Benefit) as follows:
If the Beneficiary is the spouse of the Contractowner, the surviving spouse may elect to continue the Contract in one of two ways:
•
Continue the Contract – No increase in Contract Value: The surviving spouse may elect to continue the Contract as the new Contractowner without taking an
increase in Contract Value, and the spouse may continue the Guarantee of Principal Death Benefit with no change in the way it is calculated. The rider charge rate that was in effect immediately prior to the death will continue to apply.
•
Continue the Contract – Increase in Contract Value. The surviving spouse may elect to continue the Contract as the new Contractowner and elect to have a
portion of the Death Benefit credited to the Contract and increase the Contract Value. Any portion of the Death Benefit that would have been payable (if the Contract had not been continued) that exceeds the current Contract Value on the
Valuation Date we approve the claim will be added to the Contract Value. If the Contract is continued in this way, the Guarantee of Principal Death Benefit rider and charge will terminate, and the spouse will have the Contract Value Death
Benefit.
Lastly, on page 16, in the Guarantee of Principal charge section, we removed “and is added to your base contract expense” at the end of the
first sentence, as it was a redundancy (it is included in the final sentence of the paragraph).
The effective date for Post-Effective Amendment No. 16 will continue to be delayed until May 1, 2024, with filings under Rule 485BXT
(Post-Effective Amendments 17 & 18).
On April 10, we will submit a new filing under Rule 485(a) (Post-Effective Amendment No. 19) which will serve as a “template” filing pursuant
to Rule 485(b)(1)(vii). Subsequently, we intend to file a request, pursuant to Rule 461 for an accelerated effective date of May 1, 2024, for Post-Effective Amendment No. 19.
We sincerely appreciate your attention to this filing, and your review and comments. Please call me at 860-466-1111 with any questions or additional comments.
Sincerely,
Carolyn Augur
Lincoln Investor Advantage® Advisory
Individual Variable Annuity Contracts
Lincoln Life Variable Annuity
Account N
May 1, 2024
Home Office:
The Lincoln National Life Insurance Company
1301 South Harrison Street
Fort Wayne, IN 46802
1-888-868-2583
www.LincolnFinancial.com
This prospectus describes an individual flexible premium deferred variable annuity contract issued by The Lincoln National Life Insurance Company (Lincoln Life or Company). This Contract can be purchased for use as either a nonqualified annuity or qualified retirement annuity under Sections 408 (IRAs) and 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. IRAs provide tax deferral, 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.
This Contract is available through third-party financial intermediaries who charge an advisory fee for their services. That fee is in addition to contract fees and expenses. If you elect to pay third-party advisory fees out of your Contract Value, this deduction may reduce the Death Benefit(s) and other guaranteed benefits, and may be subject to federal and state income taxes and a 10% federal penalty tax. For more details, see Advisory Fee Withdrawals.
The Contract is designed to accumulate Contract Value and to provide 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 fixed amount, if available, or a combination of 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.
If you are a new investor in the Contract, you may cancel your Contract within ten days of receiving it without paying fees or
penalties. In some states, and under certain scenarios, this free look or cancellation period may be longer. Upon cancellation, you will receive either a full refund of the amount you paid with your application or your total Contract Value. You should review this prospectus and consult with your financial professional for additional information about the specific cancellation terms that may apply.
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 contact the Home Office or your financial professional regarding availability.
The minimum initial Purchase Payment for the Contract is $10,000. The minimum initial Purchase Payment for nonqualified contracts where i4LIFE® Advantage is elected, and where the Contractowner, joint owner and/or Annuitant are ages 86 to
90 (subject to additional terms and limitations, and Home Office approval) is $50,000. 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.
Except as noted below, you choose whether your Contract Value accumulates on a variable or a fixed (guaranteed) basis or both. Your Contract may not offer a fixed account or if permitted by your Contract, we may discontinue accepting Purchase Payments or transfers into the fixed side of the contract at any time. If any portion of your Contract Value is in the fixed account, we promise to pay you your principal and a minimum interest rate. We may impose restrictions on the fixed account for the life of your Contract or during certain periods. The fixed account is not available at this time.
We offer variable 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.
All Purchase Payments for benefits on a variable basis will be placed in Lincoln Life Variable Annuity Account N (Variable Annuity Account [VAA]). You take all the investment risk on the Contract Value and the retirement income for amounts placed into one or more of the Contract’s variable options (“Subaccounts”), which, in turn, invest in corresponding underlying funds. If the Subaccounts you select make money, your Contract Value goes up; if they lose money, it goes down. How much it goes up or down depends on the performance of the Subaccounts you select. We do not guarantee how any of the
Subaccounts or their funds will perform. Also,
1
neither the U.S. Government nor any federal agency insures or guarantees your investment in the Contract. The
contracts are not bank deposits and are not endorsed by any bank or government agency.
All prospectuses and other shareholder reports, will be made available on www.lfg.com/VAprospectus. If you wish to receive future shareholder reports in paper, free of charge, please call us at 1-888-868-2583, send an email request to CustServSupportTeam@lfg.com, or contact your financial professional. Your election to receive reports in paper will apply to all funds available
under your Contract. This prospectus gives you information about the Contract that you should know before you decide to buy a Contract and make a Purchase Payment.
You should also review the prospectus for the funds and keep all prospectuses for future reference.
Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved this Contract or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
Additional information about certain investment products, including variable annuities, has been prepared by the SEC’s staff and is available online at Investor.gov.
2
Table of Contents
Item
Page
Special Terms
4
Important Information You
Should Consider About the Lincoln Investor Advantage® Advisory Variable Annuity Contract
6
Overview of the Contract
8
Fee Tables
10
Principal Risks
11
Investments of the Variable
Annuity Account
13
Charges and Other Deductions
15
The Contracts
17
Purchase Payments
18
Large Account Credit
19
Transfers On or Before the
Annuity Commencement Date
20
Surrenders and Withdrawals
23
Benefits Available Under
the Contract
24
Death Benefits
25
i4LIFE® Advantage
31
Annuity Payouts
36
Fixed Side of the Contract
37
Distribution of the
Contracts
39
Federal Tax Matters
40
Additional Information
46
Voting Rights
46
Return Privilege
46
State Regulation
46
Records and Reports
46
Legal Proceedings
47
Appendix A — Funds Available
Under The Contract
A-1
Appendix B — Investment
Requirements
B-1
3
Special Terms
In this prospectus, the following terms have the indicated meanings:
Access Period—Under i4LIFE® Advantage, a defined period of time during which we make Regular Income Payments to you while you still have access to your Account Value. This means that you may make withdrawals, surrender
the Contract, and have a Death Benefit.
Account or Variable Annuity Account (VAA)—The
segregated investment account, Account N, into which we set aside and invest the
assets for the variable side of the contract offered in this prospectus.
Account Value—Under i4LIFE®Advantage, the initial Account Value is the Contract Value on the Valuation Date that i4LIFE® Advantage is effective (or initial Purchase Payment if i4LIFE® Advantage is purchased at contract issue), less any applicable premium taxes. During the Access Period, the Account Value on a Valuation Date equals the total
value of all of the Contractowner's Accumulation Units plus the Contractowner's value
in the fixed account, reduced by Regular Income Payments and withdrawals.
Accumulation Unit—A measure used to calculate
Contract Value for the variable side of the contract before the Annuity Commencement
Date and to calculate the i4LIFE® Advantage Account
Value during the Access Period.
Advisory Fee Withdrawal—Withdrawals from your
Contract Value to pay the advisory fees associated with your Fee-Based Financial Plan.
Annuitant—The person upon whose life the annuity
benefit payments are based, and upon whose death a Death Benefit may be paid.
Annuity Commencement Date—The Valuation Date when funds are withdrawn or converted into Annuity Units or fixed dollar payout for payment of retirement
income benefits under the Annuity Payout option you select(other than i4LIFE® Advantage).
Annuity Payout—A regularly scheduled payment (under
any of the available annuity options) that occurs after the Annuity Commencement Date
(or Periodic Income Commencement Date if i4LIFE® Advantage has been elected). Payments may be variable or fixed, or a combination of both.
Annuity Unit—A measure used to calculate the amount
of Ann