prospectus-sai.htm

497 1 prospectus-sai.htm PROSPECTUS/SAI prospectus-sai.htm

Lincoln Life Flexible Premium Variable Life Account M
The Lincoln National Life Insurance Company

Home Office Location:
1300 South Clinton Street
P.O. Box 1110
Fort Wayne, IN 46802
(800) 454-6265

Administrative Office:
Customer Service Center
One Granite Place
Concord, NH 03301
(800) 444-2363

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A Flexible Premium Variable Life Insurance Policy
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This prospectus describes Lincoln VULONE2012, a flexible premium variable
life insurance contract (the "Policy"), offered by The Lincoln National Life
Insurance Company ("Lincoln Life", "the Company", "We", "Us", "Our"). The
Policy provides for death benefits and policy values that may vary with the
performance of the underlying investment options. Read this prospectus
carefully to understand the Policy being offered.

The state in which your Policy is issued will govern whether or not
certain features, riders, charges and fees will be allowed in your Policy. You
should refer to your Policy for these state-specific features. Please check
with your financial advisor regarding their availability.

You, the Owner, may allocate net premiums to the variable Sub-Accounts of
our Flexible Premium Variable Life Account M ("Separate Account"), or to the
Fixed Account. Each Sub-Account invests in shares of a certain fund offered by
the following fund families. These funds are collectively known as the Elite
Series. Comprehensive information on the funds may be found in the funds
prospectus which is furnished with this prospectus.
o AllianceBernstein Variable Products Series Fund, Inc.

o American Funds Insurance Series

o BlackRock Variable Series Funds, Inc.

o Delaware VIP (Reg. TM) Trust

o DWS Variable Series II

o Fidelity (Reg. TM) Variable Insurance Products

o Franklin Templeton Variable Insurance Products Trust

o Lincoln Variable Insurance Products Trust

o MFS (Reg. TM) Variable Insurance Trust

o PIMCO Variable Insurance Trust

Additional information on Lincoln Life, the Separate Account and this
Policy may be found in the Statement of Additional Information (the "SAI"). See
the last page of this prospectus for information on how you may obtain the SAI.

Certain terms used in this prospectus are defined within the sentences
where they appear, within relevant provisions of the prospectus, including
footnotes or they may be found in the prospectus Glossary, if one is provided,
at the back of the prospectus.

To be valid, this prospectus must have the current funds' prospectuses
with it. Keep all prospectuses for future reference.

The Securities and Exchange Commission has not approved or disapproved these
securities or determined this prospectus is accurate or complete. It is a
criminal offense to state otherwise.

This Policy may not be available in all states, and this prospectus only offers
the Policy for sale in jurisdictions where such offer and sale are lawful.

Prospectus Dated: August 15, 2012
<PAGE>

Table of Contents

<TABLE>
<CAPTION>
Contents Page
-------------------------------------------------- -----
<S> <C>
POLICY SUMMARY.................................... 3
Benefits of Your Policy....................... 3
Risks of Your Policy.......................... 4
Charges and Fees.............................. 5
LINCOLN LIFE, THE SEPARATE ACCOUNT AND
THE GENERAL ACCOUNT............................. 11
Fund Participation Agreements................. 12
Distribution of the Policies and
Compensation................................ 12
Sub-Accounts and Funds........................ 13
Sub-Account Availability and Substitution of
Funds....................................... 18
Voting Rights................................. 18
POLICY CHARGES AND FEES........................... 19
Premium Load; Net Premium Payment............. 19
Surrender Charges............................. 19
Partial Surrender Fee......................... 20
Transfer Fee.................................. 20
Mortality and Expense Risk Charge............. 20
Cost of Insurance Charge...................... 21
Administrative Fee............................ 21
Policy Loan Interest.......................... 21
Rider Charges................................. 21
YOUR INSURANCE POLICY............................. 22
Application................................... 23
Owner......................................... 24
Right to Examine Period....................... 24
Initial Specified Amount...................... 24
Transfers..................................... 24
Market Timing................................. 25
Optional Sub-Account Allocation Programs...... 27
Riders........................................ 28
Continuation of Coverage...................... 44
Termination of Coverage....................... 45

</TABLE>
<TABLE>
<CAPTION>
Contents Page
-------------------------------------------------- -----
<S> <C>
State Regulation.............................. 45
PREMIUMS.......................................... 45
Allocation of Net Premium Payments............ 45
Planned Premiums; Additional Premiums......... 45
Policy Values................................. 46
Persistency Bonus............................. 47
DEATH BENEFITS.................................... 47
Death Benefit Proceeds........................ 47
Death Benefit Options......................... 48
Changes to the Initial Specified Amount and
Death Benefit Options....................... 48
Death Benefit Qualification Test.............. 49
Payment of Death Benefit Proceeds............. 50
POLICY SURRENDERS................................. 50
Partial Surrender............................. 51
POLICY LOANS...................................... 52
LAPSE AND REINSTATEMENT........................... 53
No-Lapse Protection........................... 53
Reinstatement of a Lapsed Policy.............. 54
TAX ISSUES........................................ 54
Taxation of Life Insurance Contracts in
General..................................... 55
Policies That Are MECs........................ 56
Policies That Are Not MECs.................... 56
Other Considerations.......................... 57
Fair Market Value of Your Policy.............. 58
Tax Status of Lincoln Life.................... 58
RESTRICTIONS ON FINANCIAL
TRANSACTIONS.................................... 58
LEGAL PROCEEDINGS................................. 59
FINANCIAL STATEMENTS.............................. 59
CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION.......................... 60
GLOSSARY OF TERMS................................. 61
</TABLE>

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<PAGE>

POLICY SUMMARY

Benefits of Your Policy
Death Benefit Protection. The Policy this prospectus describes is a variable
life insurance policy which provides death benefit protection. Variable life
insurance is a flexible tool for financial and investment planning for persons
needing death benefit protection. It is not meant to be used for speculation,
arbitrage, viatical arrangements or other collective investment schemes. The
Policy may not be traded on any stock exchange and is not intended to be sold
on any secondary market. You should consider other forms of investments if you
do not need death benefit protection, as there are additional costs and
expenses in providing the insurance. Benefits of the Policy will be impacted by
a number of factors discussed in this prospectus, including adverse investment
performance and the amount and timing of Premium Payments.

Tax Deferred Accumulation. Variable life insurance has significant tax
advantages under current tax law. Policy values accumulate on a tax-deferred
basis. A transfer of values from one Sub-Account to another within the Policy
currently generates no current taxable gain or loss. Any investment income and
realized capital gains within a Sub-Account or interest from the Fixed Account
are automatically reinvested without being taxed to the Owner.

Access to Your Policy Values. Variable life insurance offers access to policy
values. You may borrow against your Policy or surrender all or a portion of
your Policy. Your Policy can support a variety of personal and business
financial planning needs.

Flexibility. The Policy is a flexible premium variable life insurance contract
in which flexible Premium Payments are permitted. You may select death benefit
options and policy riders. You may increase or decrease the amount of death
benefit. You are able to select, monitor, and change investment Sub-Account
choices within your Policy. With the wide variety of investment Sub-Accounts
available, it is possible to fine tune an investment mix to meet changing
personal objectives or investment conditions. Premium Payments and cash values
you choose to allocate to Sub-Accounts are used by us to purchase shares of
Funds which follow investment objectives similar to the investment objectives
of the corresponding Sub-Account. Those funds are referred to in this
prospectus as "underlying funds" (or "Underlying Funds"). You should refer to
this prospectus and the prospectus for each Underlying Fund for comprehensive
information on the Sub-Accounts and the Underlying Funds. You may also allocate
Premiums and Accumulation Values to the Fixed Account.

No-Lapse Protection. Your Policy will include two riders which may help you
manage some of the risk of Policy Lapse.

The No-Lapse Enhancement Rider may prevent a policy from lapsing where the Net
Accumulation Value under your Policy is insufficient to cover the Monthly
Deductions if the requirements of the rider, including requirements as to
timing and amount of Premium Payments, are met. The Net Accumulation Value of
your Policy is defined in the policy values section of the prospectus. The
duration of lapse protection provided will be determined monthly, and it will
vary based on the calculations described in detail in the rider. Those
calculations credit the actual amounts of Net Premium Payments made, deduct for
the actual amount of any Partial Surrenders you make, and then adjust the net
of those actual amounts by a formula which increases the net of Premiums less
surrenders by an assumed interest crediting rate and reduces that net amount by
certain assumed charges rates and fees referred to by the rider as "reference
rates". All assumed rates, charges, and fees are set forth in the rider.
Payment of Premiums higher than the Planned Premium and assumed interest
credited by the rider's formula on net Premiums will increase the duration of
lapse protection. Partial Surrenders and rider reference charges, rates, and
fees deducted by the rider formula will reduce the duration of lapse
protection. In addition, if the provisions of this rider are invoked to prevent
lapse of the Policy, the death benefit provided by this rider will be different
from the death benefit otherwise in effect under the Policy. Refer to the
section headed "No-Lapse Enhancement Rider" in the Riders section of this
prospectus for more information about the amount of the death benefit which
would be provided by the rider as well as the determination of the duration of
protection. Finally, the rider reserves to us the right to restrict your
allocations to certain Sub-Accounts to a maximum of 40% of the Policy
Accumulation Value. The decision to enforce this restriction will be based on
an annual review of the Separate Account investments for

3
<PAGE>

this product. If we determine that the allocations by all Owners of this
product are highly concentrated in certain Sub-Accounts, then Sub-Accounts with
higher concentrations than anticipated will be subject to the restriction. You
must maintain automatic rebalancing and comply with these investment
restrictions in order to keep this rider in effect.

The Premium Reserve Rider allows you to pay Premiums in addition to those you
plan to pay for the base policy and to have such amounts accumulate in the same
manner as if they had been allocated to your Policy. This rider's Accumulation
Value generated by these additional Premiums will automatically be transferred
to your Policy at the end of the Grace Period to help keep your Policy in force
in the event (i) the Net Accumulation Value under your Policy is insufficient
to cover the Monthly Deductions and your Policy's No-Lapse Enhancement Rider
described above is not at the time preventing your Policy from lapsing; and
(ii) you do not respond to the Lapse Notice by paying at least the amount set
forth in that notice. If the Premium Reserve Rider Accumulation Value on the
day the Grace Period ends is insufficient to meet the amount then due, your
Policy and this rider will lapse without value. You may also request us to
transfer the Premium Reserve Rider Accumulation Value to your Policy at any
time. As with your Policy, you bear the risk that investment results of the
Premium Reserve Rider Sub-Accounts you have chosen are adverse or are less
favorable than anticipated. Adverse investment results will impact the
Accumulation Value of the rider, and, therefore, the amount of the Premium
Reserve Rider Accumulation Value which may be available to prevent your Policy
from lapsing or for providing policy benefits. Refer to the section headed
"Premium Reserve Rider" in the Riders section of this prospectus for more
information about the benefits of this rider.

Risks of Your Policy

Fluctuating Investment Performance. A Sub-Account is not guaranteed and will
increase and decrease in value according to investment performance of the
Underlying Fund. Policy values in the Sub-Accounts are not guaranteed. If you
put money into the Sub-Accounts, you assume all the investment risk on that
money. A comprehensive discussion of each Sub-Account's and Underlying Fund's
objective and risk is found in this prospectus and in each fund's prospectus,
respectively. You should review these prospectuses before making your
investment decision. Your choice of Sub-Accounts and the performance of the
Funds underlying each Sub-Account will impact the policy's Accumulation Value
and will impact how long the policy remains in force, its tax status, and the
amount of Premium you need to pay to keep the Policy in force.

Policy Values in the Fixed Account. Premium Payments and Accumulation Values
allocated to the Fixed Account are held in the Company's General Account. Note
that there are significant limitations on your right to transfer amounts to the
Fixed Account and, due to these limitations, if you want to transfer all of the
balance of the Fixed Account to one or more Sub-Accounts, it may take several
years to do so. Therefore, you should carefully consider whether the Fixed
Account meets your investment needs. Unlike assets held in the Company's
Separate Account, of which the Sub-Accounts form a part, the assets of the
General Account are subject to the general liabilities of the Company and,
therefore, to the Company's general creditors. The general liabilities of the
Company include obligations we assume under other types of insurance policies
and financial products we sell and it is important to remember that you are
relying on the financial strength of the Company for the fulfillment of the
contractual promises and guarantees we make to you in the Policy, including
those relating to the payment of death benefits. For more information, please
see "Lincoln Life, The Separate Account and The General Account" or "Transfers"
sections of this prospectus.

Unsuitable for Short-Term Investment. This Policy is intended for long-term
financial and investment planning for persons needing death benefit protection,
and it is unsuitable for short-term goals. Your Policy is not designed to serve
as a vehicle for frequent trading.

Policy Lapse. Sufficient Premiums must be paid to keep a policy in force. There
is a risk of lapse if Premiums are too low in relation to the insurance amount
and if investment results of the Sub-Accounts you have chosen are adverse or
are less favorable than anticipated. Outstanding Policy Loans and Partial
Surrenders will increase the risk of lapse.

4
<PAGE>

In addition to paying sufficient Premiums and being cognizant of the impact of
outstanding Policy Loans and Partial Surrenders on your policy values, you also
have the No-Lapse Enhancement Rider and the Premium Reserve Rider, briefly
noted above and discussed in more detail in the Riders section of this
prospectus, to help you manage some of the risk of Policy Lapse.

Decreasing Death Benefit. Any outstanding Policy Loans and any amount that you
have surrendered or withdrawn will reduce your Policy's death benefit.
Depending upon your choice of Death Benefit Option, adverse performance of the
Sub-Accounts you choose may also decrease your Policy's death benefit.

Consequences of Surrender. Surrender Charges are assessed if you surrender your
Policy within the first 10-15 Policy Years. Depending on the amount of Premium
paid, or any Reduction in Specified Amount, there may be little or no Surrender
Value available. Partial Surrenders may reduce the policy value and death
benefit, and may increase the risk of lapse. To avoid lapse, you may be
required to make additional Premium Payments. Full or Partial Surrenders may
result in tax consequences.

Tax Consequences. As noted in greater detail in the section headed "Tax
Issues", the federal income tax treatment of life insurance is complex and
current tax treatment of life insurance may change. There are other federal tax
consequences such as estate, gift and generation skipping transfer taxes, as
well as state and local income, estate and inheritance tax consequences. You
should always consult a tax advisor about the application of federal and state
tax rules to your individual situation. The following discussion highlights tax
risks in general, summary terms.

Tax Treatment of Life Insurance Contracts. The policies are designed to enjoy
the favorable tax treatment afforded life insurance, including the exclusion of
death benefits from income tax, the ability to take distributions and loans
over the life of your Policy, and the deferral of taxation of any increase in
the value of your Policy. If the Policy does fail to qualify, you will be
subject to the denial of those important benefits. In addition, if you pay more
Premiums than permitted under the federal tax law your Policy may still be life
insurance but will be classified as a Modified Endowment Contract whereby only
the tax benefits applicable to death benefits will apply and distributions will
be subject to immediate taxation and to an added penalty tax.

Tax Law Compliance. We believe that the Policy will satisfy the federal tax
law definition of life insurance, and we will monitor your Policy for
compliance with the tax law requirements. The discussion of the tax treatment
of your Policy is based on the current Policy, as well as the current rules and
regulations governing life insurance. Please note that changes made to the
Policy, as well as any changes in the current tax law requirements, may affect
the Policy's qualification as life insurance or may have other tax
consequences.

Charges and Fees

This section describes the fees and expenses that you will pay when buying,
owning and surrendering your Policy. Refer to the "Policy Charges and Fees"
section later in this prospectus for more information.

Table I describes the fees and expenses that you will pay at the time you
purchase your Policy, surrender your Policy, or transfer Accumulation Values
between Sub-Accounts.

<TABLE>
<CAPTION>
Table I: Transaction Fees
When Charge Amount
Charge is Deducted Deducted
<S> <C> <C>
Maximum sales charge When you pay a Premium. 7.0% of each Premium Payment in Policy Years
imposed on Premiums 1-20 and 4.0% in Policy Years 21 and later.1
(Premium Load) (Average
of 3.0% of this Charge is
used for state and federal
tax obligations)
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
Table I: Transaction Fees
When Charge Amount
Charge is Deducted Deducted
<S> <C> <C>
Surrender Charge*2 For up to 15 years from the
Policy Date and up to 15 years
from the effective date of each
increase in Specified Amount, a
Surrender Charge will be
deducted at the time you effect
a Full Surrender of your Policy.
For up to 10 years from the
Policy Date or up to 10 years
from the effective date of each
increase in Specified Amount, a
Surrender Charge will be
deducted at the time you effect
a Reduction in Specified
Amount.
Maximum Charge $60.00 per $1,000 of Specified Amount.
Minimum Charge $0.00 per $1,000 of Specified Amount.
Charge for a For a male, age 45, standard non-tobacco, in
Representative Insured year one the maximum Surrender Charge is
$39.38 per $1,000 of Specified Amount.

Transfer Fee Applied to any transfer request $ 25
in excess of 24 made during
any Policy Year.
</TABLE>

* These charges and costs vary based on individual characteristics. The
charges and costs shown in the table may not be representative of the
charges and costs that a particular Owner will pay. You may obtain more
information about the particular charges that would apply to you by
requesting a personalized policy illustration from your financial advisor.

1 The maximum sales charge imposed on Premiums is anticipated to cover the
Company's costs for sales expenses and any policy-related state and federal
tax liabilities. Policy-related taxes imposed by states range from 0.0% to
4.0%. In considering policy-related state taxes component of the sales
charge, the Company considers the average of the taxes imposed by the
states rather than any taxes specifically imposed by the state in which the
Owner resides.

2 During the life of the Policy, you may request one or more Partial
Surrenders, each of which may not exceed 90% of your Policy's Surrender
Value as of the date of your request. If you wish to surrender more than
90% of your Policy's Surrender Value, you must request a Full Surrender of
your Policy, which is subject to the Surrender Charge reflected in the
table above. (See section headed "Partial Surrenders" for a discussion of
Partial Surrenders of your Policy.)

Table II describes the fees and expenses that you will pay periodically during
the time that you own your Policy, not including the fund operating expenses
shown in Table III.

<TABLE>
<CAPTION>
Table II: Periodic Charges Other Than Fund Operating
Expenses
When Charge Amount
Charge is Deducted Deducted
<S> <C> <C>
Cost of Insurance* Monthly
</TABLE>

6
<PAGE>

<TABLE>
<CAPTION>
Table II: Periodic Charges Other Than Fund Operating Expenses (continued)
When Charge Amount
Charge is Deducted Deducted
<S> <C> <C>
Maximum Charge $83.33 per month per $1,000 of Net Amount at
Risk.
Minimum Charge $0.00 per month per $1,000 of Net Amount at
Risk.
Individuals with a higher mortality risk than
standard issue individuals can be charged from
125% to 800% of the standard rate.
Charge for a For a male, age 45, standard non-tobacco, in
Representative Insured year one the guaranteed maximum monthly cost
of insurance rate is $0.20 per month per $1,000
of Net Amount at Risk.
Mortality and Expense Daily (at the end of each Daily charge as a percentage of the value of the
Risk Charge ("M&E") Valuation Day). Separate Account, guaranteed not to exceed an
effective annual rate of 0.60%.1
Administrative Fee* Monthly A flat fee of $10 per month in all years.
In addition to the flat fee of $10 per month, for
the first ten Policy Years from issue date or
increase in Specified Amount, a monthly fee per
dollar of Initial Specified Amount or increase in
Specified Amount as follows:
Maximum Charge $2.56 per month per $1,000 of Initial Specified
Amount or increase in Specified Amount.
Minimum Charge $0.01 per month per $1,000 of Initial Specified
Amount or increase in Specified Amount.
Charge for a For a male age 45, standard non-tobacco, the
Representative Insured maximum additional monthly charge is $0.13
per month per $1,000 of Specified Amount.
Policy Loan Interest Annually 4.0% annually of the amount held in the Loan
Account.2
Interest on Accelerated Annually
Benefit Lien
Accelerated Benefit Up 4.0% annually of amount of Accelerated Benefit
to Surrender Value up to Surrender Value.3
Accelerated Benefit Rate not to exceed higher of (i) published
Exceeding Surrender monthly average of Moody's Corporate Bond
Value Yield Average - Monthly Average Corporates
(determined 30 days in advance of beginning of
Policy Year) and (ii) the rate used to compute
the Accumulation Value of the Fixed Account
plus 1.0%.3
No-Lapse Enhancement N/A There is no charge for this rider.4
Rider
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
Table II: Periodic Charges Other Than Fund Operating Expenses (continued)
When Charge Amount
Charge is Deducted Deducted
<S> <C> <C>
Overloan Protection Rider One-time charge when you Maximum charge of 5% of the then current
elect to use the benefit. Accumulation Value.5
Optional Rider Charges Individualized based on whether optional
Rider(s) selected.
Premium Reserve Rider When you allocate a Premium 4.0% of each Premium Payment allocated to the
Payment to this rider rider.6
When Rider Accumulation 3.0% of amount transferred
Value is transferred to Policy
during Policy Years 1-106
"Lincoln LifeEnhanceSM Monthly
Accelerated Benefits
Rider"
Cost of Insurance*
Maximum Charge $43.48 per month per $1,000 of Net Amount at
Risk or Rider Net Amount at Risk, whichever is
applicable at the time.
Individuals with higher mortality risk than
standard issue individuals can be charged from
125% to 200% of the standard rate.
Minimum Charge $0.00 per month per $1,000 of Net Amount at
Risk or Rider Net Amount at Risk, whichever is
applicable at the time.
Charge for a For a male, age 45, standard non-tobacco, in
Representative Insured year one the guaranteed maximum monthly cost
of insurance rate is $0.09 per month per $1,000
of Net Amount at Risk.
Waiver of Monthly Monthly Rate factor is percent of all other covered
Deduction Rider7 monthly charges.
Maximum Charge 12.0% of all other covered monthly charges.
Minimum Charge 2.0% of all other covered monthly charges.
Charge for a For a male, age 45, standard non-tobacco, the
Representative Insured maximum rate factor is 3.5% of all other
covered monthly charges.
Basic Accelerated When any benefit payment is $250 (deducted from amount of benefit paid)
Benefits Riders8 made
Change of Insured N/A There is no charge for this rider.
Rider
Enhanced Surrender Monthly (in Policy Years 2-5 Charge is $0.05 per $1,000 of Initial Specified
Value Rider only) Amount.
</TABLE>

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<PAGE>

1 Guaranteed at an effective annual rate of 0.60% in Policy Years 1-10 and
0.20% in Policy Years 11 and beyond.

2 Effective annual interest rate of 4.0% in years 1-10 and 3.0% in years 11
and later. Although deducted annually, interest accrues daily. As described
in the section headed "Policy Loans", when you request a Policy Loan,
amounts equal to the amount of the loan you request are withdrawn from the
Sub-Accounts and the Fixed Account in proportion to their respective
values. Such amount is transferred to the Loan Account, which is part of
the Company's general account. Amounts in the Loan Account are credited
interest at an effective annual rate guaranteed not to be less than 3.0%.

3 Under the Basic Accelerated Benefits Riders, payments of benefits are
considered as liens, which as described more fully in the section headed
"Policy Loans", are charged interest on amounts not exceeding the Surrender
Value of the Policy at an effective annual interest rate of 4.0% in years
1-10 and 3.0% in years 11 and later. To the extent the Accelerated Benefit
paid exceeds the Surrender Value of the Policy, the interest rate charged
will vary as described in the table above and in the section headed "Policy
Loans". Although deducted annually, interest accrues daily. As described in
the section headed "Policy Loans", when you request an Accelerated Benefit,
amounts equal to the amount of the Accelerated Benefit you request are
withdrawn from the Sub-Accounts and the Fixed Account in proportion to
their respective values. Such amount is transferred to the Loan Account,
which is part of the Company's general account. Amounts in the Loan Account
are credited interest at an effective annual rate guaranteed not to be less
than 3.0%.

4 There is no separate charge for the No-Lapse Enhancement Rider. The Cost
of Insurance Charge for the Policy has been adjusted to reflect the
addition of the rider to the Policy. See No-Lapse Enhancement Rider section
for further discussion.

5 Accumulation Value of the Policy is the sum of the Fixed Account Value,
the Separate Account Value, and the Loan Account Value. See Policy Values
section for detailed discussion of how each value is calculated.

6 Allocations of Premium Payments to the rider are at your discretion.
Allocations of Premium Payments to the rider are subject to the 4.0% charge
shown in Table II and are not subject to the "Maximum Sales Charge Imposed
on Premiums" shown in Table I. This 4.0% charge is called the Premium
Reserve Rider Premium Load. Rider Accumulation Value allocated to the
Separate Account is subject to the mortality and expense risk charge (which
does not exceed 0.60% for Policy Years 1-10 and 0.20% for Policy Years 11
and later).

Transfers of Accumulation Value from the rider to the Policy are not
subject to the "Maximum Sales Charge Imposed on Premiums" shown in Table I,
but are subject to a charge of 3.0% of the Accumulation Value transferred
if such transfers are made during the first 10 Policy Years. In addition,
if you request a loan from the Accumulation Value of this rider, interest
is charged at the same rate as for Policy Loans. See Premium Reserve Rider
section for further discussion.

7 These charges and costs vary based on individual characteristics. The
charges and costs shown in the tables may not be representative of the
charges and costs that a particular Owner will pay. You may obtain more
information about the particular charges, cost of insurance, and the cost
of certain riders that would apply to you by requesting a personalized
policy illustration from your financial advisor.

8 There are two versions of this rider; see Riders section for detailed
discussion of the terms of each rider, and note that the payment of a
benefit under either version of the Rider is considered a loan against the
Policy.

Table III shows the annual fund fees and expenses that are deducted daily from
the Underlying Funds in which your Sub-Account invests. The table shows the
minimum and maximum total operating expenses charged by the funds that you may
pay during the time you own your Policy. More detail concerning each fund's
fees and expenses is contained in the prospectus for each fund.

These fees and expenses may change at any time.

<TABLE>
<CAPTION>
Table III: Total Annual Fund Operating Expenses (expenses that are deducted from
fund
assets)
Total Annual Operating Expense Maximum Minimum
<S> <C> <C>
Total management fees, distribution and/or service 1.97% 9 0.28%
(12b-1) fees, and other expenses.
</TABLE>

9 The Total Annual Operating Expenses shown in the table do not reflect
waivers and reductions. Funds may offer waivers and reductions to lower
their fees. Currently such waivers and reductions range from 0.00% to
1.22%. These waivers and reductions generally extend through April 30, 2013
but may be terminated at any time by the fund. Refer to the funds
prospectus for specific information on any waivers or reductions in effect.
The minimum and maximum percentages shown in the table include Fund
Operating Expenses of mutual funds, if any, which may be acquired by the
Underlying

9
<PAGE>

Funds which operate as Fund of Funds. Refer to the funds prospectus for
details concerning Fund Operating Expenses of mutual fund shares acquired
by Underlying Funds, if any. In addition, certain Underlying Funds have
reserved the right to impose fees when fund shares are redeemed within a
specified period of time of purchase ("Redemption Fees") not reflected in
the table above. As of the date of this prospectus, none have done so.
Redemption Fees are discussed in the Market Timing section of this
prospectus and further information about Redemption Fees is contained in
the prospectus for such funds, copies of which accompany this prospectus or
may be obtained by calling 1-800-444-2363.

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<PAGE>

LINCOLN LIFE, THE SEPARATE ACCOUNT AND THE GENERAL ACCOUNT
The Lincoln National Life Insurance Company (Lincoln Life, the Company, we, us,
our) (EIN 35-0472300), organized in 1905, is an Indiana-domiciled insurance
company, engaged primarily in the direct issuance of life insurance policies
and annuities. Lincoln Life is wholly owned by Lincoln National Corporation
(LNC), a publicly held insurance and financial services holding company
incorporated in Indiana. Lincoln Life is obligated to pay all amounts promised
to Owners under the policies. Death benefit proceeds and rider benefits to the
extent those proceeds and benefits exceed the then current Accumulation Value
of your Policy are backed by the claims-paying ability of Lincoln Life. Our
claims paying ability is rated from time to time by various rating agencies.
Information with respect to our current ratings is available at our website
noted below under "How to Obtain More Information." Those ratings do not apply
to the Separate Account, but reflect the opinion of the rating agency companies
as to our relative financial strength and ability to meet contractual
obligations to our Owners. Ratings can and do change from time to time.
Additional information about ratings is included in the Statement of Additional
Information.

Lincoln Financial Group is the marketing name for Lincoln National Corporation
(NYSE:LNC) and its affiliates. Through its affiliates, Lincoln Financial Group
offers annuities, life, group life and disability insurance, 401(k) and 403(b)
plans, and comprehensive financial planning and advisory services.

Lincoln Life Flexible Premium Variable Life Account M (Separate Account) is a
Separate Account of the Company which was established on December 2, 1997. The
investment performance of assets in the Separate Account is kept separate from
that of the Company's General Account. Separate Account assets attributable to
the policies are not charged with the general liabilities of the Company.
Separate Account income, gains and losses are credited to or charged against
the Separate Account without regard to the Company's other income, gains or
losses. The Separate Account's values and investment performance are not
guaranteed. It is registered with the Securities and Exchange Commission (the
"SEC" or the "Commission") as a unit investment trust under the Investment
Company Act of 1940 ("1940 Act") and meets the definition of "Separate
Account." We may change the investment policy of the Separate Account at any
time. If required by the Insurance Commissioner, we will file any such change
for approval with the Department of Insurance in our state of domicile, and in
any other state or jurisdiction where this Policy is issued.

You may also allocate your Premium Payments and Accumulation Values in whole or
in part to the Fixed Account ("Fixed Account"). In the Fixed Account, your
principal is guaranteed. Fixed Account assets are general assets of the
Company, and are held in the Company's General Account. Our general assets
include all assets other than those held in separate accounts which we sponsor.
We will invest the assets of the General Account in accordance with applicable
law. Additional information concerning laws and regulations applicable to the
investment of the assets of the General Account is included in the Statement of
Additional Information.

Our Financial Condition. As an insurance company, we are required by state
insurance regulation to hold a Specified Amount of reserves in order to meet
all the contractual obligations of our General Account to our policyholders. In
order to meet our claims-paying obligations, we regularly monitor our reserves
to ensure we hold sufficient amounts to cover actual or expected policy and
claims payments.

State insurance regulators also require insurance companies to maintain a
minimum amount of capital in excess of reserves, which acts as a cushion in the
event that the insurer suffers a financial impairment, based on the inherent
risks in the insurer's operations. These risks include those associated with
losses that we may incur as the result of defaults on the payment of interest
or principal on assets held in our General Account, which include bonds,
mortgages, general real estate investments, and stocks, as well as the loss in
value of these investments resulting from a loss in their market value.

How to Obtain More Information. We encourage both existing and prospective
policyholders to read and understand our financial statements. We prepare our
financial statements on both a statutory basis and according to Generally
Accepted Accounting Principles (GAAP). Our audited GAAP financial statements,
as well as the financial statements of the Separate Account, are located in the
Statement of Additional Information. If you would

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<PAGE>

like a free copy of the Statement of Additional Information please contact our
Administration Office at the address or telephone number listed on the first
page of this prospectus. In addition, the Statement of Additional Information
is available on the SEC's website at http://www.sec.gov. You may obtain our
audited statutory financial statements, any unaudited statutory financial
statements that may be available as well as ratings information by visiting our
website at www.LincolnFinancial.com.

Fund Participation Agreements

In order to make the funds in which the Sub-Accounts invest available, Lincoln
Life has entered into agreements with the trusts or corporations and their
advisors or distributors. In some of these agreements, we must perform certain
administrative services for the fund advisors or distributors. For these
administrative functions, we may be compensated at annual rates of between
0.00% and 0.50% based upon the assets of an Underlying Fund attributable to the
policies. We (or our affiliates) may profit from these fees or use these fees
to defray the costs of distributing the policy. Additionally, a fund's advisor
and/or distributor (or its affiliates) may provide us with certain services
that assist us in the distribution of the policies and may pay us and/or
certain affiliates amounts to participate in sales meetings. This compensation
may come from 12b-1 fees, or be paid by the advisors or distributors. The funds
offered by the following trusts or corporations make payments to Lincoln Life
under their distribution plans in consideration of the administrative functions
Lincoln Life performs: American Funds Insurance Series, Fidelity Variable
Insurance Products, Lincoln Variable Insurance Products Trust, and PIMCO
Variable Insurance Trust.

Payments made out of the assets of the fund will reduce the amount of assets
that otherwise would be available for investment and will reduce the return on
your investment. The dollar amount of future asset-based fees is not
predictable because these fees are a percentage of the fund's average net
assets, which can fluctuate over time. If, however, the value of the fund goes
up, then so would the payment to us (or our affiliates). Conversely, if the
value of the funds goes down, payments to us (or our affiliates) would
decrease.

Distribution of the Policies and Compensation

The policy is distributed by broker-dealer firms through their registered
representatives who are appointed as life insurance agents for the Company,
subject to the terms of selling agreements entered into by such firms, the
Company and the Company's Principal Underwriter, Lincoln Financial
Distributors, Inc. ("LFD"). The Company's affiliates, Lincoln Financial
Advisors Corporation and Lincoln Financial Services Corporation (collectively,
"LFN"), have such agreements in effect with LFD and the Company. In addition to
compensation for distributing the Policy as described below, the Company
provides financial and personnel support to LFD and LFN for operating and other
expenses, including amounts used for recruitment and training of personnel,
production of literature and similar services.

The maximum total compensation we pay to any broker-dealer firm in the form of
commission or expense reimbursement allowance, inclusive of any bonus
incentives, with respect to policy sales is 140% of the first year premium and
5% of all other premiums paid. The actual amount of such compensation or the
timing and manner of its receipt may be affected by a number of factors
including: (a) choices the Owner has made at the time of application for the
policy, including the choice of riders; (b) the volume of business produced by
the firm and its representatives; or (c) the profitability of the business the
firm has placed with the Company. Also, in lieu of premium-based commission,
equivalent amounts may be paid over time based on Accumulation Value.

In some situations, the broker-dealer may elect to share its commission or
expense reimbursement allowance with its registered representatives. Registered
representatives of broker-dealer firms may also be eligible for cash bonuses
and "non-cash compensation." "Non-cash compensation", as defined under FINRA's
rules, includes but is not limited to, merchandise, gifts and prizes, office
space and equipment, seminars and travel expenses.

Broker-dealers or their affiliates may be paid additional amounts for: (1)
"preferred product" treatment of the policies in their marketing programs,
which may include marketing services and increased access to sales
representatives; (2) sales promotions relating to the policies; (3) costs
associated with sales conferences and

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<PAGE>

educational seminars for their sales representatives; (4) other sales expenses
incurred by them; and (5) inclusion in the financial products the broker-dealer
offers. Loans may be provided to broker-dealers or their affiliates to help
finance marketing and distribution of the policies, and those loans may be
forgiven if aggregate sales goals are met. In addition, staffing or other
administrative support and services may be provided to broker-dealers who
distribute the policies.

These additional types of compensation are not offered to all broker-dealers.
The terms of any particular agreement governing compensation may vary among
broker-dealers and the amounts may be significant. The prospect of receiving,
or the receipt of, additional compensation may provide broker-dealers and/or
their registered representatives with an incentive to favor sales of the
policies over other variable life insurance policies (or other investments)
with respect to which a broker-dealer does not receive additional compensation,
or receives lower levels of additional compensation. You may ask your
registered representative how he/she will personally be compensated, in whole
or in part, for the sale of the policy to you or for any alternative proposal
that may have been presented to you. You may wish to take such payments into
account when considering and evaluating any recommendation made to you in
connection with the purchase of a policy.

Depending on the particular selling arrangements, there may be others who are
compensated for distribution activities. For example, certain "wholesalers,"
who control access to certain selling offices, may be compensated for access to
those offices or for referrals, and that compensation may be separate from the
compensation paid for sales of the policies. One of the wholesalers is Lincoln
Financial Distributors, Inc. ("LFD"), a registered broker-dealer, also an
affiliate of Lincoln Life. Marketing organizations, associations, brokers or
consultants which provide marketing assistance and other services to
broker-dealers who distribute the policies, and which may be affiliated with
those broker-dealers, may also be compensated. Commissions and other incentives
or payments described above are not charged directly to Owners or the Separate
Account. The potential of receiving, or the receipt of, such marketing
assistance or other services and the payment to those who control access or for
referrals, may provide broker-dealers and/or their registered representatives
an incentive to favor sales of the policies over other variable life insurance
policies (or other investments) with respect to which a broker-dealer does not
receive similar assistance or disadvantage issuers of other variable life
insurance policies (or other investments) which do not compensate for access or
referrals. All compensation is paid from our resources, which include fees and
charges imposed on your Policy.

We do not anticipate that the Surrender Charge, together with the portion of
the Premium Load attributable to sales expense, will cover all sales and
administrative expenses which we will incur in connection with your Policy. Any
such shortfall would be available for recovery from the Company's General
Account, which supports insurance and annuity obligations.

Sub-Accounts and Funds

The variable investment options in the Policy are Sub-Accounts of the Separate
Account ("Sub-Accounts"). Each Sub-Account invests in shares in a single
Underlying Fund. All amounts allocated or transferred to a Sub-Account are used
to purchase shares of the appropriate Underlying Fund. You do not invest
directly in these Underlying Funds. The investment performance of each
Sub-Account will reflect the investment performance of the Underlying Fund.

We create Sub-Accounts and select the funds, the shares of which are purchased
by amounts allocated or transferred to the Sub-Accounts, based on several
factors, including, without limitation, asset class coverage, the strength of
the manager's reputation and tenure, brand recognition, performance, and the
capability and qualification of each sponsoring investment firm. Another factor
we consider during the initial selection process is whether the fund or an
affiliate of the fund will compensate us for providing administrative,
marketing, and/or support services that would otherwise be provided by the
fund, the fund's investment advisor, or its distributor. We review each fund
periodically after it is selected. Upon review, we may either close a
Sub-Account or restrict allocation of additional purchase payments to a
Sub-Account if we determine the fund in which such Sub-Account invests no
longer meets one or more of the factors and/or if the Sub-Account has not
attracted significant Owner assets. Alternatively, we may seek to substitute
another fund which follows a similar investment objective as the

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<PAGE>

fund in which a Sub-Account invests, subject to receipt of applicable
regulatory approvals. Finally, when we develop a variable life insurance
product in cooperation with a fund family or distributor (e.g., a "private
label" product), we generally will include funds based on recommendations made
by the fund family or distributor, whose selection criteria may differ from our
selection criteria.

A given Underlying Fund may have an investment objective and principal
investment strategy similar to those for another fund managed by the same
investment advisor or subadvisor. However, because of timing of investments and
other variables, there will be no correlation between the two investments. Even
though the management strategy and the objectives of the funds are similar, the
investment results may vary.

Several of the Underlying Funds may invest in non-investment grade, high-yield,
and high-risk debt securities (commonly referred to as "junk bonds"), as
detailed in the individual fund prospectus.

There is no assurance that the investment objective of any of the Underlying
Funds will be met. You assume all of the investment performance risk for the
Sub-Accounts you select. The amount of risk varies significantly among the
Sub-Accounts. You should read each Underlying Fund's prospectus carefully
before making investment choices. In particular, also please note, there can be
no assurance that any money market fund will be able to maintain a stable net
asset value per share. During extended periods of low interest rates, and due
in part to Policy fees and expenses, the yields of any Sub-Account investing in
a money market fund may become extremely low and possibly negative.

Additional Sub-Accounts and Underlying Funds may be made available in our
discretion. The right to select among Sub-Accounts will be limited by the terms
and conditions imposed by the Company.

The Underlying Funds and their investment advisors/subadvisors and objectives
are listed below. Comprehensive information on each Underlying Fund, its
objectives and past performance may be found in that funds' prospectus or
summary prospectus. Prospectuses for each of the Underlying Funds listed below
accompany this prospectus and are available by calling 1-800-444-2363 or by
referring to the contact information provided by the Underlying Fund's on the
cover page of its summary prospectus.

AllianceBernstein Variable Products Series Fund, Inc., advised by
AllianceBernstein, L.P.

o AllianceBernstein Global Thematic Growth Portfolio (Class A):
Long-term growth of capital.

o AllianceBernstein Small/Mid Cap Value Portfolio (Class A): Long-term
growth of capital.

American Funds Insurance Series, advised by Capital Research and Management
Company.

o Global Growth Fund (Class 2): Long-term growth of capital.

o Global Small Capitalization Fund (Class 2): Long-term growth of
capital.

o Growth Fund (Class 2): Capital growth.

o Growth-Income Fund (Class 2): Long-term growth of capital and income.

o International Fund (Class 2): Long-term growth of capital.

BlackRock Variable Series Funds, Inc., advised by BlackRock Advisors, LLC and
subadvised by BlackRock Investment Management, LLC

o Global Allocation V.I. Fund (Class I): High total investment return.

Delaware VIP (Reg. TM) Trust, advised by Delaware Management Company.*

o Diversified Income Series (Standard Class): Maximum long-term total
return consistent with reasonable risk.

o Emerging Markets Series (Standard Class): Long-term capital
appreciation.

o Limited-Term Diversified Income Series (Standard Class): Maximum total
return, consistent with reasonable risk.

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<PAGE>

o REIT Series (Standard Class): Maximum long-term total return, with
capital appreciation as a secondary objective.

o Small Cap Value Series (Standard Class): Capital appreciation.

o Smid Cap Growth Series (Standard Class): Long-term capital
appreciation.

o U. S. Growth Series (Standard Class): Long-term capital appreciation.

o Value Series (Standard Class): Long-term capital appreciation.

DWS Variable Series II, advised by Deutsche Investment Management Americas,
Inc. and subadvised by RREEF America L.L.C.

o DWS Alternative Asset Allocation VIP Portfolio (Class A)(2): Capital
appreciation.

Fidelity (Reg. TM) Variable Insurance Products, advised by Fidelity Management
& Research Company and subadvised by FMR CO., Inc.

o Contrafund (Reg. TM) Portfolio (Service Class): Long-term capital
appreciation.

o Growth Portfolio (Service Class): To achieve capital appreciation.

o Mid Cap Portfolio (Service Class): Long-term growth of capital.

Franklin Templeton Variable Insurance Products Trust, advised by Franklin
Advisers, Inc. for the Franklin Income Securities Fund and by Franklin Mutual
Advisers, LLC for the Mutual Shares Securities Fund.

o Franklin Income Securities Fund (Class 1): To maximize income while
maintaining prospects for capital appreciation.

o Mutual Shares Securities Fund (Class 1): Capital appreciation; income
is a secondary consideration.

Lincoln Variable Insurance Products Trust, advised by Lincoln Investment
Advisors Corporation.

o LVIP Baron Growth Opportunities Fund (Service Class): Capital
appreciation.
(Subadvised by BAMCO, Inc.)

o LVIP BlackRock Inflation Protected Bond Fund (Standard Class): To
maximize real return, consistent with preservation of real capital and
prudent investment management.
(Subadvised by BlackRock Financial Management, Inc.)

o LVIP Capital Growth Fund (Standard Class): Capital growth.
(Subadvised by Wellington Management Company, LLP)

o LVIP Cohen & Steers Global Real Estate Fund (Standard Class): Total
return through a combination of current income and long-term capital
appreciation.
(Subadvised by Cohen & Steers Capital Management)

o LVIP Columbia Value Opportunities Fund (Standard Class): Long-term
capital appreciation.
(Subadvised by Columbia Management Advisors, LLC)

o LVIP Delaware Bond Fund (Standard Class): Maximum current income
(yield) consistent with a prudent investment strategy.
(Subadvised by Delaware Management Company)*

o LVIP Delaware Diversified Floating Rate Fund (Standard Class): Total
return.
(Subadvised by Delaware Management Company)*

o LVIP Delaware Social Awareness Fund (Standard Class): To maximize
long-term capital appreciation.
(Subadvised by Delaware Management Company)*

o LVIP Delaware Special Opportunities Fund (Standard Class): To maximize
long-term capital appreciation.
(Subadvised by Delaware Management Company)*

o LVIP Dimensional Non-U.S. Equity Fund (Standard Class)(2): Long-term
capital appreciation.

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<PAGE>

o LVIP Dimensional U.S. Equity Fund (Standard Class)(2): Capital
appreciation.

o LVIP Dimensional/Vanguard Total Bond Fund (Standard Class): Total
return consistent with preservation of capital.

o LVIP Global Income Fund (Standard Class): Current income consistent
with preservation of capital.
(Subadvised by Mondrian Investment Partners Limited and Franklin
Advisors, Inc.)

o LVIP Janus Capital Appreciation Fund (Standard Class): Long-term growth
of capital in a manner consistent with the preservation of capital.
(Subadvised by Janus Capital Management LLC)

o LVIP J.P. Morgan High Yield Fund (Standard Class): A high level of
current income; capital appreciation is the secondary objective.
(Subadvised by J.P. Morgan Investment Management, Inc.)

o LVIP MFS International Growth Fund (Standard Class): Long-term
capital appreciation.
(Subadvised by Massachusetts Financial Services Company)

o LVIP MFS Value Fund (Standard Class): Capital appreciation.
(Subadvised by Massachusetts Financial Services Company)

o LVIP Mid-Cap Value Fund (Standard Class): Long-term capital
appreciation.
(Subadvised by Wellington Management Company, LLP)

o LVIP Mondrian International Value Fund (Standard Class): Long-term
capital appreciation as measured by the change in the value of fund
shares over a period of three years or longer.
(Subadvised by Mondrian Investment Partners Limited)

o LVIP Money Market Fund (Standard Class): To maximize current income
while maintaining a stable value of your

o shares (providing stability of net asset value) and preserving the
value of your initial investment (preservation of capital).
(Subadvised by Delaware Management Company)

o LVIP SSgA Bond Index Fund (Standard Class): To match as closely as
practicable, before fees and expenses, the performance of the Barclays
Capital U.S. Aggregate Index.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Conservative Index Allocation Fund (Standard Class)(2): A
high level of current income, with some consideration given to growth of
capital.

o LVIP SSgA Conservative Structured Allocation Fund: (Standard Class)(2):
A high level of current income, with some consideration given to growth
of capital.

o LVIP SSgA Developed International 150 Fund (Standard Class): To
maximize long-term capital appreciation.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Emerging Markets 100 Fund (Standard Class): To maximize
long-term capital appreciation.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Global Tactical Allocation Fund (Standard Class)(2):
Long-term growth of capital.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA International Index Fund (Standard Class): To approximate as
closely as practicable, before fees and expenses, the performance of a
broad market index of non-U.S. foreign securities.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Large Cap 100 Fund (Standard Class): Long-term capital
appreciation.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Moderate Index Allocation Fund (Standard Class)(2): A balance
between a high level of current income and growth of capital, with a
greater emphasis on growth of capital.

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<PAGE>

o LVIP SSgA Moderate Structured Allocation Fund (Standard Class)(2): A
balance between a high level of current income and growth of capital,
with an emphasis on growth of capital.

o LVIP SSgA Moderately Aggressive Index Allocation Fund (Standard
Class)(2): A balance between high level of current income and growth of
capital, with a greater emphasis on growth of capital.

o LVIP SSgA Moderately Aggressive Structured Allocation Fund (Standard
Class)(2): A balance between high level of current income and growth of
capital, with a greater emphasis on growth of capital.

o LVIP SSgA S&P 500 Index Fund (Standard Class)(1): To approximate as
closely as practicable, before fees and expenses, the total rate of
return of common stocks publicly traded in the United States, as
represented by the S&P 500 Index.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Small-Cap Index Fund (Standard Class): To approximate as
closely as practicable, before fees and expenses, the performance of the
Russell 2000 (Reg. TM) Index, which emphasizes stocks of small U.S.
companies.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP SSgA Small-Mid Cap 200 Fund (Standard Class): To maximize
long-term capital appreciation.
(Subadvised by SSgA Funds Management, Inc.)

o LVIP T. Rowe Price Growth Stock Fund (Standard Class): Long-term
capital growth.
(Subadvised by T. Rowe Price Associates, Inc.)

o LVIP T. Rowe Price Structured Mid-Cap Growth Fund (Standard Class):
To maximize capital appreciation.
(Subadvised by T. Rowe Price Associates, Inc.)

o LVIP Templeton Growth Fund (Standard Class): Long-term capital growth.
(Subadvised by Templeton Investment Counsel, LLC)

o LVIP Turner Mid-Cap Growth Fund (Standard Class): Capital appreciation.

(Subadvised by Turner Investment Partners)

o LVIP Vanguard Domestic Equity ETF Fund (Standard Class)(2): Long-term
capital appreciation.

o LVIP Vanguard International Equity ETF Fund (Standard Class)(2):
Long-term capital appreciation.

o LVIP Wells Fargo Intrinsic Value Fund (Standard Class): Reasonable
income by investing in income-producing equity securities.
(Subadvised by Metropolitan West Capital Management)

o LVIP Protected Profile Conservative Fund (Standard Class)(2): A high
level of current income with some consideration given to growth of
capital.

o LVIP Protected Profile Growth Fund (Standard Class)(2): A balance
between a high level of current income and growth of capital, with a
greater emphasis on growth of capital.

o LVIP Protected Profile Moderate Fund (Standard Class)(2): A balance
between a high level of current income and growth of capital, with an
emphasis on growth of capital.

MFS (Reg. TM) Variable Insurance Trust, advised by Massachusetts Financial
Services Company

o Growth Series (Initial Class): Capital appreciation.

o Utilities Series (Initial Class): Total return.

PIMCO Variable Insurance Trust, advised by PIMCO

o PIMCO VIT CommodityRealReturn (Reg. TM) Strategy Portfolio
(Administrative Class): Maximum real return.

* Investments in Delaware Investments VIP Series, Delaware Funds, LVIP
Delaware Funds or Lincoln Life accounts managed by Delaware Investment
Advisors, a series of Delaware Management Business Trust, are not and will
not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583
542 and its holding companies, including their subsidiaries or related
companies, and are subject to investment risk, including possible delays in
prepayment and loss of income and

17
<PAGE>

capital invested. No Macquarie Group company guarantees or will guarantee
the performance of the Series or Funds or accounts, the repayment of
capital from the Series or Funds or account, or any particular rate of
return.

(1) "Standard & Poor's (Reg. TM)", "S&P 500 (Reg. TM)", Standard & Poor's
500 (Reg. TM)" and "500" are trademarks of Standard & Poor's Financial
Services, LLC, a subsidiary of The McGraw-Hill Companies, Inc. and have
been licensed for use by Lincoln Variable Insurance Products Trust and its
affiliates. The product is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding
the advisability of purchasing the product.

(2) These are "Fund of Funds" and as such purchase shares of other mutual
funds rather than directly investing in debt and equity securities. As a
result, Fund of Funds may have higher expenses than mutual funds which
invest directly in debt and equity securities.

Sub-Account Availability and Substitution of Funds

Lincoln Life may close Sub-Accounts and may seek to substitute shares of other
funds as the fund in which a Sub-Account invests if:

1) the shares of any Underlying Fund should no longer be available for
investment by the Separate Account; or

2) the Sub-Account has not attracted significant Owner allocations; or

3) in our judgment, further investment in such shares ceases to be appropriate
in view of the purpose of the Separate Account, legal, regulatory or
federal income tax restrictions, or for any other reason.

We will obtain any necessary regulatory or other approvals prior to such a
change. We will endorse your policy as required to reflect any withdrawal or
substitution of underlying funds. Substitute funds may have higher charges than
the funds being replaced.

Voting Rights

The Underlying Funds do not hold regularly scheduled shareholder meetings. When
a fund holds a special meeting for the purpose of approving changes in the
ownership or operation of the fund, the Company is entitled to vote the shares
held by our Sub-Account in that fund. Under our current interpretation of
applicable law, you may instruct us how to vote those shares.

We will notify you when your instructions are needed and will provide
information from the fund about the matters requiring the special meeting. We
will calculate the number of votes for which you may instruct us based on the
amount you have allocated to that Sub-Account, and the value of a share of the
corresponding fund, as of a date chosen by the fund (record date). If we
receive instructions from you, we will follow those instructions in voting the
shares attributable to your Policy. If we do not receive instructions from you,
we will vote the shares attributable to your Policy in the same proportion as
we vote other shares based on instructions received from other Owners. Since
Underlying Funds may also offer their shares to entities other than the
Company, those other entities also may vote shares of the Underlying Funds, and
those votes may affect the outcome.

Each Underlying Fund is subject to the laws of the state in which it is
organized concerning, among other things, the matters which are subject to a
shareholder vote, the number of shares which must be present in person or by
proxy at a meeting of shareholders (a "Quorum"), and the percentage of such
shareholders present in person or by proxy which must vote in favor of matters
presented. Because shares of the Underlying Fund held in the Separate Account
are owned by the Company, and because under the 1940 Act the Company will vote
all such shares in the same proportion as the voting instruction which we
receive, it is important that each Owner provide their voting instructions to
the Company. Even though Owners may choose not to provide voting instruction,
the shares of a fund to which such Owners would have been entitled to provide
voting instruction will be voted by the Company in the same proportion as the
voting instruction which we actually receive. As a result, the instruction of a
small number of Owners could determine the outcome of matters subject to
shareholder vote. In addition, because the Company expects to vote all shares
of the Underlying Fund which it owns at a meeting of the shareholders of an

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<PAGE>

Underlying Fund, all shares voted by the Company will be counted when the
Underlying Fund determines whether any requirement for a minimum number of
shares be present at such a meeting to satisfy a Quorum requirement has been
met.

POLICY CHARGES AND FEES
Policy charges and fees compensate us for providing your insurance benefit,
administering your Policy, assuming risks associated with your Policy, and
incurring sales related expenses. We may profit from any of these charges, and
we may use this profit for any purpose, including covering shortfalls from
other charges.

In addition to policy charges, the investment advisor for each of the
Underlying Funds deducts a daily charge as a percent of the value in each fund
as an asset management charge. The charge reflects asset management fees of the
investment advisor. Other expenses are incurred by the funds (including 12b-1
fees for Class 2 shares and other expenses) and deducted from fund assets.
Values in the Sub-Accounts are reduced by these charges. Future fund expenses
may vary. Detailed information about charges and expenses incurred by an
Underlying Fund is contained in each fund's prospectus.

The Monthly Deductions, including the Cost of Insurance Charges, will be
deducted proportionately from the Net Accumulation Value of each Sub-Account
and the Fixed Account subject to the charge.

The Monthly Deductions are made on the "Monthly Anniversary Day," which is the
Policy Date and the same day of each month thereafter. If the day that would
otherwise be a Monthly Anniversary Day is non-existent for that month, or is
not a Valuation Day, then the Monthly Anniversary Day is the next Valuation
Day.

If the Net Accumulation Value is insufficient to cover the current Monthly
Deduction, you have a 61-day Grace Period to make a payment sufficient to cover
that deduction.

Premium Load; Net Premium Payment

We make a deduction from each Premium Payment. This amount, referred to as
"Premium Load," covers certain policy-related state and federal tax
liabilities. It also covers a portion of the sales expenses incurred by the
Company. We deduct 7.0% from each Premium Payment in Policy Years 1-20 and 4.0%
in Policy Years 21 and beyond. The Premium Payment, net of the Premium Load, is
called the "Net Premium Payment."

Surrender Charges

A Surrender Charge may apply if the Policy is totally surrendered or has a
decrease in the Specified Amount of death benefit. The Surrender Charge is in
part a deferred sales charge and in part a recovery of certain first year
administrative costs. A schedule of Surrender Charges is included in each
policy.

The Surrender Charge varies by age of the insured, the number of years since
the date of policy issue or the date of an increase in Specified Amount, and
the Specified Amount. The Surrender Charge will never exceed $60.00 per $1,000
of Specified Amount. A personalized schedule of Surrender Charges is included
in each policy. You may obtain more information about the Surrender Charges
that would apply to your Policy by requesting a personalized illustration from
your insurance representative.

The duration of the Surrender Charge is 15 years for full surrenders and 10
years for decreases in Specified Amount.

Surrender Charges are assessed by withdrawing value from the Sub-Accounts and
the Fixed Account proportionately. The Surrender Charge will not exceed the
policy value. All Surrender Charges decline to zero within 15 years following
policy issue, or any increase in Specified Amount.

Upon either a Full Surrender of the Policy or a decrease in Specified Amount,
the charge will be subject to the following conditions:

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A. For decreases in Specified Amount, excluding Full Surrender of the Policy,
no Surrender Charge will be applied where the decrease:

1) occurs after the tenth Policy Anniversary following policy issue or
increase in Specified Amount; or

2) is caused by a Partial Surrender; or

3) when added to the sum of all prior decreases, does not exceed 25% of
the Initial Specified Amount.

B. For all other decreases, the charge will be calculated as 1) minus 2), then
divided by 3) and then multiplied by 4), where:

1) is the amount of this decrease plus any prior decreases;

2) is the greater of an amount equal to 25% of the Initial Specified
Amount or the sum of all prior decreases;

3) is the Initial Specified Amount; and

4) is the then applicable Surrender Charge from the schedule in the
Policy.

We may refuse or limit requests for decreases in Specified Amount, to the
extent there is insufficient value to cover the necessary Surrender Charges.

If you increase the Specified Amount, a new Surrender Charge will be applicable
to each increase. This charge is in addition to any Surrender Charge on the
existing Specified Amount. Upon an increase in Specified Amount, we will send
you a confirmation of the increase.

Upon Full Surrender of your Policy following a policy decrease, the Surrender
Charge will be calculated as the entire amount shown in the policy
specifications, multiplied by one minus the percentage of the Initial Specified
Amount for which a Surrender Charge was previously assessed. The charge
assessed upon a Full Surrender will not exceed the policy's value.

In addition, if your Policy includes the Enhanced Surrender Value Rider, you
may surrender your Policy for an enhanced Surrender Value provided under the
rider, without being subject to the Policy Surrender Charges.

Any surrender may have tax implications. Consult your tax or other financial
advisor before initiating a surrender.

Partial Surrender Fee

No Surrender Charge or Administrative Fee is imposed on a Partial Surrender.

Transfer Fee

For each transfer request in excess of 24 made during any Policy Year, we
reserve the right to charge you an Administrative Fee of $25.

Mortality and Expense Risk Charge

We assess a daily mortality and expense risk charge as a percentage of the
value of the Sub-Accounts. The mortality risk assumed is that the insured may
live for a shorter period than we originally estimated. The expense risk
assumed is that our expenses incurred in issuing and administering the policies
will be greater than we originally estimated. The charge is guaranteed not to
exceed an effective annual rate of 0.60% in Policy Years 1-10 and 0.20% in
Policy Years 11 and beyond. The current charge is at an effective annual rate
of 0.60% in Policy Years 1-10, 0.20% in Policy Years 11-20, and 0.00% in Policy
Years 21 and beyond.

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Cost of Insurance Charge

A significant cost of variable life insurance is the "Cost of Insurance
Charge". This charge is the portion of the Monthly Deduction designed to
compensate the Company for the anticipated cost of paying death benefits in
excess of the policy value.

The Cost of Insurance Charge for your Policy depends on the current "Net Amount
at Risk". The Net Amount at Risk is the death benefit, without regard to any
benefits payable at the insured's death under any riders, minus the greater of
zero or the Policy's Accumulation Value. Because the Accumulation Value will
vary with investment performance, Premium Payment patterns and charges, the Net
Amount at Risk will vary accordingly.

The Cost of Insurance Charge is determined monthly by dividing the death
benefit at the beginning of the policy month by 1 plus .0008295 (the monthly
equivalent of an effective annual rate of 1.0%), subtracting the Accumulation
Value at the beginning of the policy month, and multiplying the result (the
"Net Amount at Risk") by the applicable current cost of insurance rate as
determined by the Company.

The maximum rates that we may use are found in the guaranteed maximum cost of
insurance rate table in your Policy's specifications. The applicable cost of
insurance rate used in this monthly calculation for your Policy depends upon
the policy duration, the age, gender (in accordance with state law) and
underwriting category of the insured. Please note that they will generally
increase each Policy Year as the insured ages. Current cost of insurance rates,
in general, are determined based on our expectation of future mortality,
investment earnings, persistency and expenses (including taxes). For this
reason, they may be less than the guaranteed maximum rates shown in the Policy.
Accordingly, your monthly Cost of Insurance Charge may be less than the amount
that would be calculated using the guaranteed maximum cost of insurance rate
shown in the table in your Policy. Also, your monthly Cost of Insurance Charge
will never be calculated at a rate higher than the maximum Cost of Insurance
Charge shown in "Table II: Periodic Charges Other Than Fund Operating Expenses"
in this prospectus.

Administrative Fee

There is a flat Monthly Deduction of $10 in all years.

For the first ten Policy Years from issue date or increase in Specified Amount,
there is an additional charge that varies with the insured's age, sex, Premium
class, and benefit selection option percentage, if any. This charge will never
exceed $2.56 per $1,000 of Initial Specified Amount or increase in Specified
Amount. This fee compensates the Company for administrative expenses associated
with policy issue and ongoing policy maintenance including Premium billing and
collection, policy value calculation, confirmations, periodic reports and other
similar matters.

Policy Loan Interest

If you borrow against your Policy, interest will be charged to the Loan Account
Value. The annual effective interest rate is 4.0% in years 1-10, 3.0% in years
11 and beyond. We will credit 3.0% interest on the Loan Account Value in all
years.

Rider Charges

Basic Accelerated Benefits Riders. There is a flat charge of $250 (limited in
certain states), which will be deducted from any benefit when paid.

"Lincoln LifeEnhanceSM Accelerated Benefits Rider". If you elect this rider,
there is a monthly Cost of Insurance Charge for this rider which will be part
of the Monthly Deduction made under the Policy. Also, this rider's Cost of
Insurance will be part of the No-Lapse Value Monthly Deduction and Reset
Account Value Monthly Deduction as described in the No-Lapse Enhancement Rider,
if attached to the Policy. The amount deducted each Policy Month will be
calculated as (A) multiplied by (B) where:

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(A) is the applicable rate found in the "Guaranteed Cost of Insurance Rate Per
$1,000 of Policy Net Amount at Risk or Rider Net Amount At Risk" table of
rates shown on the Policy Specifications; and

(B) is either i. or ii. noted below:

i. For any Policy Month prior to acceleration of the death benefit, the
Policy's net amount at risk divided by $1,000; or

ii. Following acceleration of the death benefit, for any Policy Month in
which benefits are not payable, the Rider's Net Amount at Risk divided by
$1,000.

The Rider's Net Amount at Risk is equal to the Remaining Benefit Amount at the
beginning of the Policy Month, divided by the Net Amount at Risk Discount
Factor shown on the Policy Specifications, minus the Policy's Accumulation
Value at the beginning of the Policy Month after the deduction of the Monthly
Administrative Fee but prior to the deduction for the monthly Cost of
Insurance.

Each Policy Month you receive a Chronic Illness Monthly Benefit Amount or the
Terminal Illness benefit, this rider's Cost of Insurance will be waived.

Enhanced Surrender Value Rider. There is a monthly charge during Policy Years 2
- 5 of $0.05 per $1,000 of initial specified amount.

Waiver of Monthly Deduction Rider. The monthly charge for this benefit is equal
to the sum of all other covered monthly charges for the Policy and all riders,
multiplied by a rate factor. The rate factor depends on the age, underwriting
category and gender of the insured. The maximum rate factor is 12.0%. If you
have elected this rider, a table of rate factors appears on the rider pages in
your Policy.

Overloan Protection Rider. There is a one-time charge for this rider if you
choose to elect the benefit. This charge will not exceed 5.0% of the then
current Accumulation Value.

Premium Reserve Rider. We deduct 4.0% from each Premium Payment you direct to
this rider. Transfers of Premium Reserve Rider Accumulation Value from this
rider to the Policy may be subject to a charge of 3.0% of amount transferred
during Policy Years 1 - 10. Premium Reserve Rider Accumulation Value allocated
to the Premium Reserve Separate Account is subject to the mortality and expense
risk charge not to exceed 0.60% for Policy Years 1-10 and 0.20% for Policy
Years 11 and later.

In addition, if you request a loan from the Premium Reserve Rider Accumulation
Value, interest is charged at the same rate as for Policy Loans.

YOUR INSURANCE POLICY
Your Policy is a life insurance contract that provides for a death benefit
payable on the death of the insured. The Policy and the application constitute
the entire contract between you and Lincoln Life.

We may add, change or eliminate any Underlying Funds that the Separate Account
or the Sub-Accounts invest in, subject to state and federal laws and
regulations. We may substitute a new fund for one that is no longer available
for investment, or is no longer suitable for the Policy. We will obtain any
required approvals from Owners, the SEC, and state insurance regulators before
substituting any funds.

We may choose to add or remove Sub-Accounts as investment options under the
policies, based on marketing needs or investment conditions. If we change any
Sub-Accounts or substitute any funds, we will make appropriate endorsements to
the policies.

If we obtain appropriate approvals from Owners and securities regulators, we
may:

o change the investment objective of the Separate Account;

o operate the Separate Account as a management investment company, unit
investment trust, or any other form permitted under applicable securities
laws;

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o deregister the Separate Account; or

o combine the Separate Account with another separate account.

We will notify you of any change that is made. (See section headed "Transfer
Fee" for explanation of an additional right to transfer accumulation values
from a Sub-Account when its investment objective changes.)

The Policy includes policy specifications pages. These pages provide important
information about your Policy such as: the identity of the insured and Owner;
Policy Date; the Initial Specified Amount; the death benefit option selected;
issue age; Planned Premium Payment; Surrender Charges; expense charges and
fees; and guaranteed maximum cost of insurance rates.

When your Policy is delivered to you, you should review it promptly to confirm
that it reflects the information you provided in your application. If not,
please notify us immediately.

The Policy is nonparticipating. This means that no dividends are payable to
you. In addition, your Policy does not share in the profits or surplus earnings
of the Company.

Before purchasing the Policy to replace, or to be funded with proceeds from an
existing life insurance policy or annuity, make sure you understand the
potential impact. The insured will need to prove current insurability and there
may be a new contestable period for the new policy. The death benefit and
policy values may be less for some period of time in the new policy.

The Policy Date is the date on which we begin life insurance coverage. This is
the date from which Policy Years, Policy Anniversary and age are determined.

Once your Policy is in force, the effective date of payments and requests you
send us is usually determined by the day and time we receive them.

We cannot process your requests for transactions relating to the Policy until
we have received the request in "good order" at our Home Office. "Good order"
means the actual receipt of the requested transaction in writing (or other form
subject to our consent) along with all information and supporting legal
documentation necessary to effect the transaction. We may, in our sole
discretion, determine whether any particular transaction request is in good
order, and we reserve the right to change or waive any good order requirements
at any time.

We allow telephone transactions when you complete our authorization form and
return it to us. Contact our Administrative Office for information on
authorization for telephone transactions.

Any telephone or other electronic transmission, whether it is yours, your
service provider's, your agent's, or ours, can experience outages or slowdowns
for a variety of reasons. Although we have taken precautions to help our
systems handle heavy use, we cannot promise complete reliability under all
circumstances. If you experience problems, you should send your request in
writing to our Administrative Office.

Application

If you decide to purchase a Policy, you must first complete an application. A
completed application identifies the proposed insured and provides sufficient
information to permit us to begin underwriting risks in the Policy. We require
a medical history and examination of the proposed insured. Based on our review
of medical information about the proposed insured, we may decline to provide
insurance, or we may place the proposed insured in a special underwriting
category. The monthly Cost of Insurance Charge deducted from the policy value
after issue varies depending on the age, gender and underwriting category of
the insured.

A Policy may only be issued upon receipt of satisfactory evidence of
insurability, and generally when the insured is at least age 15 and at most age
85. Age will be determined by the nearest birthday of the insured.

To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who applies for a Policy.

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<PAGE>

When you apply for a Policy, we will ask for your name, address, date of birth,
and other information that will allow us to identify you. We, or our agent, may
also ask to see your driver's license, photo i.d. or other identifying
documents.

Owner

The Owner on the Date of Issue is designated in the policy specifications. You,
as Owner, will make the following choices:

1) initial death benefit amount and death benefit option;

2) optional riders;

3) the amount and frequency of Premium Payments; and

4) the amount of Net Premium Payment to be allocated to the selected
Sub-Accounts or the Fixed Account.

You are entitled to exercise rights and privileges of your Policy as long as
the insured is living. These rights generally include the power to select the
Beneficiary, request Policy Loans, make Partial Surrenders, Surrender the
Policy entirely, request a Reduction in Specified Amount, name a new Owner,
and assign the Policy. You must inform us of any change in writing. We will
record change of Owner and Beneficiary forms to be effective as of the date of
the latest signature on the written request.

Right to Examine Period

You may return your Policy to us for cancellation within ten days after you
receive it (or a greater number of days if required by your state). This is
called the "Right to Examine Period". If the Policy is returned for
cancellation within the Right to Examine Period, we will refund to you the
greater of (a) all Premium Payments less any Indebtedness; or (b) the sum of
(i) the Accumulation Value less any Indebtedness, on the date the returned
Policy is received by us, plus (ii) any charges and fees imposed under the
Policy's terms. If a Premium Payment was made by check, there may be a delay
until the check clears.

If your Policy is issued in a state that requires return of Premium Payments,
any Net Premium Payments received by us within ten days of the date the Policy
was issued will be held in the money market Sub-Account. At the end of that
period, it will be allocated to the Sub-Accounts and the Fixed Account, if
applicable, which you designated. If your Policy is issued in a state that
provides for return of value, any Net Premium Payments received before the end
of the Right to Examine Period will be allocated directly to the Sub-Accounts
and the Fixed Account, if applicable, which you designated. In all cases, if
the Policy is returned for cancellation within the Right to Examine Period, we
will return to you the greater of (a) all Premium Payments less any
Indebtedness; or (b) the sum of (i) the Accumulation Value less any
Indebtedness, on the date the returned Policy is received by us, plus (ii) any
charges and fees imposed under the Policy's terms.

Initial Specified Amount

You will select the Initial Specified Amount of death benefit on the
application. This may not be less than $100,000. This amount, in combination
with a death benefit option, will determine the initial death benefit. The
Initial Specified Amount is shown on the policy specifications page.

Transfers

You may make transfers among the Sub-Accounts and the Fixed Account, subject to
certain provisions. You should carefully consider current market conditions and
each fund's objective and investment policy before allocating money to the
Sub-Accounts.

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During the first Policy Year, transfers from the Fixed Account to the
Sub-Accounts may be made only as provided for in the Dollar Cost Averaging or
Automatic Rebalancing program described below. The amount of all transfers from
the Fixed Account in any other Policy Year may not exceed the greater of:

1) 25% of the Fixed Account value as of the immediately preceding Policy
Anniversary, or

2) the total dollar amount transferred from the Fixed Account in the
immediately preceding Policy Year.

Up to 24 transfer requests (a request may involve more than a single transfer)
may be made in any Policy Year without charge. We may limit transfers from the
Fixed Account at any time. Due to these limitations, if you want to transfer
all of your value from the Fixed Account to one or more Sub-Accounts, it may
take several years to do so.

Requests for transfers may be made in writing or by telephone, if you have
previously authorized telephone transfers in writing, subject to our consent.
We will use reasonable procedures, such as requiring identifying information
from callers, recording telephone instructions, and providing written
confirmation of transactions, in order to confirm instructions are genuine. Any
instructions, which we reasonably believe to be genuine, will be your
responsibility, including losses arising from any errors in the communication
of instructions. As a result of this procedure, you will bear the risk of loss.
If we do not use reasonable procedures, as described above, we may be liable
for losses due to unauthorized instructions.

Any transfer among the Sub-Accounts or to the Fixed Account will result in the
crediting and cancellation of accumulation units. This will be based on the
accumulation unit values determined after our Administrative Office receives a
request in writing or adequately authenticated electronic transfer request.
Transfer and financial requests received in good order before 4:00 P.M. Eastern
time on a business day will normally be effective that day.

Market Timing

Frequent, large, or short-term transfers among Sub-Accounts and the Fixed
Account, such as those associated with "market timing" transactions, can affect
the Underlying Funds and their investment returns. Such transfers may dilute
the value of the fund shares, interfere with the efficient management of the
fund's portfolio, and increase brokerage and administrative costs of the funds.
As an effort to protect our Owners and the funds from potentially harmful
trading activity, we utilize certain market timing policies and procedures (the
"Market Timing Procedures"). Our Market Timing Procedures are designed to
detect and prevent such transfer activity among the Sub-Accounts and the Fixed
Account that may affect other Owners or fund shareholders.

In addition, the Underlying Funds may have adopted their own policies and
procedures with respect to frequent purchases and redemptions of their
respective shares. The prospectuses for the funds describe any such policies
and procedures, which may be more or less restrictive than the frequent trading
policies and procedures of other funds and the Market Timing Procedures we have
adopted to discourage frequent transfers among Sub-Accounts. While we reserve
the right to enforce these policies and procedures, Owners and other persons
with interests under the policies should be aware that we may not have the
contractual authority or the operational capacity to apply the frequent trading
policies and procedures of the Underlying Funds.

However, under the SEC rules, we are required to: (1) enter into written
agreement with each Underlying Fund or its principal underwriter that obligates
us to provide to the Underlying Fund promptly upon request certain information
about the trading activity of individual Owners, and (2) execute instructions
from the Underlying Fund to restrict or prohibit further purchases or transfers
by specific Owners who violate excessive trading policies established by the
Underlying Fund.

You should be aware that the purchase and redemption orders received by
Underlying Funds generally are "omnibus" orders from intermediaries such as
retirement plans or Separate Accounts to which Premium Payments and cash values
of variable insurance policies are allocated. The omnibus orders reflect the
aggregation and netting of multiple orders from individual retirement plan
participants and/or individual Owners of variable insurance policies. The
omnibus nature of these orders may limit the Underlying Funds' ability to apply
their respective disruptive trading policies and procedures. We cannot
guarantee that the Underlying Funds (and thus our Owners) will not be harmed by
transfer activity relating to the retirement plans and/or other insurance
companies that may

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<PAGE>

purchase the Underlying Funds. In addition, if an Underlying Fund believes that
an omnibus order we submit may reflect one or more transfer requests from
Owners engaged in disruptive trading activity, the Underlying Fund may reject
the entire omnibus order.

Our Market Timing Procedures detect potential "market timers" by examining the
number of transfers made by Owners within given periods of time. In addition,
managers of the funds might contact us if they believe or suspect that there is
market timing. If requested by a fund company, we may vary our Market Timing
Procedures from Sub-Accounts to Sub-Accounts to comply with specific fund
policies and procedures.

We may increase our monitoring of Owners who we have previously identified as
market timers. When applying the parameters used to detect market timers, we
will consider multiple policies owned by the same Owner if that Owner has been
identified as a market timer. For each Owner, we will investigate the transfer
patterns that meet the parameters being used to detect potential market timers.
We will also investigate any patterns of trading behavior identified by the
funds that may not have been captured by our Market Timing Procedures.

Once an Owner has been identified as a "market timer" under our Market Timing
Procedures, we will notify the Owner in writing that future transfers (among
the Sub-Accounts and/or the Fixed Account) will be temporarily permitted to be
made only by original signature sent to us by U.S. mail, standard delivery for
the remainder of the Policy Year. Overnight delivery or electronic instructions
(which may include telephone, facsimile, or Internet instructions) submitted
during this period will not be accepted. If overnight delivery or electronic
instructions are inadvertently accepted from an Owner that has been identified
as a market timer, upon discovery, we will reverse the transaction within 1 to
2 business days of our discovery. We will impose this "original signature"
restriction on that Owner even if we cannot identify, in the particular
circumstances, any harmful effect from that Owner's particular transfers.

Owners seeking to engage in frequent, large, or short-term transfer activity
may deploy a variety of strategies to avoid detection. Our ability to detect
such transfer activity may be limited by operational systems and technological
limitations. The identification of Owners determined to be engaged in such
transfer activity that may adversely affect other Owners or fund shareholders
involves judgments that are inherently subjective. We cannot guarantee that our
Market Timing Procedures will detect every potential market timer. If we are
unable to detect market timers, you may experience dilution in the value of
your fund shares and increased brokerage and administrative costs in the funds.
This may result in lower long-term returns for your investments.

Our Market Timing Procedures are applied consistently to all Owners. An
exception for any Owner will be made only in the event we are required to do so
by a court of law. In addition, certain funds available as investment options
in your Policy may also be available as investment options for Owners of other,
older life insurance policies issued by us.

Some of these older life insurance policies do not provide a contractual basis
for us to restrict or refuse transfers which are suspected to be market timing
activity. In addition, because other insurance companies and/or retirement
plans may invest in the Underlying Funds, we cannot guarantee that the funds
will not suffer harm from frequent, large, or short-term transfer activity
among Sub-Accounts and the Fixed Accounts of variable contracts issued by other
insurance companies or among investment options available to retirement plan
participants.

In our sole discretion, we may revise our Market Timing Procedures at any time
without prior notice as necessary to better detect and deter frequent, large,
or short-term transfer activity, to comply with state or federal regulatory
requirements, and/or to impose additional or alternate restrictions on market
timers (such as dollar or percentage limits on transfers). If we modify our
Market Timing Procedures, they will be applied uniformly to all Owners or as
applicable to all Owners with policy values allocated to Sub-Accounts investing
in particular Underlying Funds. We also reserve the right to implement and
administer Redemption Fees imposed by one or more of the funds in the future.

Some of the Underlying Funds have reserved the right to temporarily or
permanently refuse payments or transfer requests from us if, in the judgment of
the Underlying Fund's investment advisor, the Underlying Fund would be unable
to invest effectively in accordance with its investment objective or policies,
or would otherwise potentially be adversely affected. To the extent permitted
by applicable law, we reserve the right to defer or reject a transfer

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<PAGE>

request at any time that we are unable to purchase or redeem shares of any of
the funds in which the Separate Account invests, including any refusal or
restriction on purchases or redemptions of the Sub-Account units as a result of
the funds' own policies and procedures on market timing activities. If a fund
refuses to accept a transfer request we have already processed, we will reverse
the transaction within 1-2 business days of the day on which we receive notice
of the refusal. We will notify you in writing if we have reversed, restricted
or refused any of your transfer requests. Some of the Underlying Funds may also
impose Redemption Fees on short-term trading (i.e., redemptions of Underlying
Fund shares within a certain number of business days after purchase). We
reserve the right to administer and collect any such Redemption Fees on behalf
of the Underlying Funds. You should read the prospectuses of the funds for more
details on their ability to refuse or restrict purchases or redemptions of
their shares.

Optional Sub-Account Allocation Programs

You may elect to participate in programs for Dollar Cost Averaging or Automatic
Rebalancing. There is currently no charge for these programs. You may
participate in only one program at any time.

Dollar Cost Averaging systematically transfers specified dollar amounts during
the first Policy Year from the money market Sub-Account or the Fixed Account.
Transfer allocations may be made to one or more of the Sub-Accounts (not the
Fixed Account) on a monthly basis. These transfers do not count against the
free transfers available. By making allocations on a regularly scheduled basis,
instead of on a lump sum basis, you may reduce exposure to market volatility.
Dollar Cost Averaging will not assure a profit or protect against a declining
market.

If the Owner elects Dollar Cost Averaging from either the money market
Sub-Account or the Fixed Account the value in that account must be at least
$1,000 initially. The minimum amount that may be allocated is $50 monthly.

If Dollar Cost Averaging is desired, it must be elected at issue.

Dollar Cost Averaging terminates automatically:

1) if the value in the money market Sub-Account or the Fixed Account is
insufficient to complete the next transfer;

2) seven calendar days after our Administrative Office receives a request for
termination in writing or by telephone, with adequate authentication;

3) on the first Policy Anniversary; or

4) if your Policy is surrendered or otherwise terminates.

From time to time, we may offer special interest rate programs for Dollar Cost
Averaging. Please consult your financial advisor to determine the current
availability and terms of these programs. We reserve the right to modify,
suspend or terminate a Dollar Cost Averaging program. Any changes will not
affect Owners currently participating in the Dollar Cost Averaging program.

Automatic Rebalancing periodically restores to a pre-determined level the
percentage of policy value allocated to the Fixed Account and each Sub-Account.
The pre-determined level is the allocation initially selected on the
application, until changed by the Owner. Your Policy will be issued with
Automatic Rebalancing. When Automatic Rebalancing is in effect, all Net Premium
Payments allocated to the Sub-Accounts and Fixed Account will be subject to
Automatic Rebalancing. Transfers among the Sub-Accounts and the Fixed Account
as a result of Automatic Rebalancing do not count against the number of free
transfers available.

Automatic Rebalancing is available only on a quarterly basis. Automatic
Rebalancing may be terminated, or the allocation may be changed at any time, by
contacting our Administrative Office. Terminating Automatic Rebalancing will
terminate the No-Lapse Enhancement Rider attached to your Policy. Refer to the
"Riders" section of this prospectus for more information.

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<PAGE>

Riders

We may offer you riders to your Policy from time to time. Riders may alter the
benefits or charges in your Policy, rider availability and benefits may vary by
state of issue, and their election may have tax consequences to you. Also, if
you elect a particular rider, it may restrict or enhance the terms of your
Policy, or of other riders in force. Consult your financial and tax advisors
before adding riders to, or deleting them from, your Policy.

Basic Accelerated Benefits Riders. There are two basic Accelerated Benefits
Riders. The availability of the riders is based upon the Insured meeting our
underwriting criteria (including the Insured's age and the state of the
Insured's health at the time of your application), which will determine which,
if any, form of rider will be issued to you. If the Insured meets our
underwriting requirements and if you apply for the riders at the same time as
you apply for your Policy, you will be issued the second version of the rider
(as described below). If the Insured does not meet our underwriting
requirements (or you do not apply for the riders when you apply for your
Policy), you will be issued the first version of the rider that is described
below. There is a charge for these riders of $250 (limited in certain states),
which will be deducted from any benefit when paid. Benefits payable under
either form of rider will be considered as a lien against your Policy for the
amount of the accelerated benefit paid, and the lien will be considered as a
Policy Loan and will be charged interest. (See section headed "Policy Loans".)
As the benefit paid is a lien, you may, if you wish, repay any part (but not
less than $25) or all of the amount paid. The amount of any lien outstanding at
the time of the death of the Insured will be deducted from the death benefit
otherwise payable. In certain states, the availability of the riders, and the
benefits available thereunder, are limited; please consult with your financial
advisor as to availability and benefits.

One version of this rider pays a portion of the Death Benefit upon occurrence
of terminal illness (defined by the rider as when the Insured's life expectancy
is reduced to less than 12 months) or nursing home confinement (defined by the
rider as the Insured being confined to a qualifying nursing home for the
balance of life), subject to the terms of the rider. This version of the rider
will pay 50% of the Death Benefit for terminal illness and 40% of the death
benefit for nursing home confinement, subject to an overall maximum of $250,000
on all policies in force with us, in accordance with the terms of the rider.
You may apply for this rider either at the time your application for the Policy
is made or at any time thereafter. Our underwriting rules in effect at the time
you apply will determine whether the rider will be issued.

The second version of this rider, which must be applied for at the time you
apply for your Policy, in addition to paying the same portion of the Death
Benefit upon the occurrence of terminal illness or nursing home confinement (as
discussed above), also may pay a portion of the death benefit upon critical
illness or a condition specified in the rider. The illnesses which qualify are
detailed in the rider and generally include, but are not limited to, heart
attack (myocardial infarction) and life threatening cancer. In the instance of
critical illness, the portion of the Death Benefit payable is 5% (not to exceed
a total of $25,000) upon the occurrence of the first critical illness covered
by the rider.

To receive a benefit, you must contact us and let us know which benefit you are
requesting and the benefit amount (subject to maximum limits) you would like.
We will let you know what physician's certification or other requirements you
must submit. If you request less than the maximum benefit, you may later apply
for the balance of the benefit. For example, if the Insured is confined to a
qualifying nursing home for the balance of life, and your only policy with us
covering that Insured has a $100,000 death benefit, you could request up to 40%
or $40,000, and if the Insured is later diagnosed with a medical condition
resulting in a less than 12 month life expectancy, you may request an
additional 10% (for a total benefit of 50%) or $10,000 (for a total benefit of
$50,000). Because the benefit payable creates a lien on the Policy, the maximum
amount of your benefit may also be restricted (or no benefit may be payable) if
you have an outstanding Policy Loan or if the Policy has been assigned to a
third party. Benefits paid under the Rider may restrict your ability to request
future Policy Loans.

"Lincoln LifeEnhanceSM Accelerated Benefits Rider". The availability of this
rider is based upon the insured meeting our underwriting criteria (including
the insured's age, sex and the state of the insured's health at the time of
your application). You must apply for this rider at the time you apply for your
Policy. Charges for this rider, if elected, are part of the Monthly Deductions.

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<PAGE>

This rider provides for the acceleration of up to 100% of the Original Benefit
Amount, as determined below, upon occurrence of a Qualifying Event provided all
of the terms and conditions of this rider have been met. There are two
Qualifying Events, defined below: (1) the insured is certified as Chronically
Ill as defined in the rider; or (2) the insured is certified as Terminally Ill
as defined in the rider.

Depending on which Qualifying Event occurs and the benefit payment option you
have chosen, the Original Benefit Amount will be determined as follows,
assuming all the Conditions for Eligibility for Benefit Payments, also
described below, have been satisfied:

A. For Chronic Illness where you have elected to receive benefits in a one-time
lump sum and have met all Conditions for Eligibility of Benefit Payments:

o the Policy's Death Benefit Proceeds, without reduction by an outstanding
indebtedness, (the "Gross Death Benefit Proceeds").

o If a Premium Reserve Rider is attached to the Policy, the Policy's Gross
Death Benefit Proceeds less the Premium Reserve Rider Accumulation Value.
The Premium Reserve Rider Surrender Value will be paid to you prior to the
calculation of the Original Benefit Amount.

B. For Chronic Illness where you have elected to receive Monthly Benefit
Amounts or where you elect to receive the Terminal Illness benefit and have
met all Conditions for Eligibility for Benefit Payments:

o the Gross Death Benefit Proceeds after a (required) change to Death
Benefit Option 1; or

o If a Premium Reserve Rider is attached to the Policy, you can elect to
have the Premium Reserve Rider Surrender Value paid to you prior to the
calculation of the Original Benefit Amount.

You are eligible to receive an accelerated benefit payment if the Policy and
this rider are in force and the insured is living when all of the following
requirements (the "Conditions for Eligibility for Benefit Payment") are met:

1. Our receipt and approval of the following documentation provided by you:

a. For Chronic Illness, Written Certification or Written Re-certification
that the insured is a Chronically Ill individual; or

b. For Terminal Illness, a Terminally Ill Certification that the insured
is Terminally Ill; and

c. A written consent to make such payment from any assignee of record named
under the Policy or any irrevocable beneficiary named under the Policy;
and

2. We complete, at our discretion and expense, a personal interview with, and
an assessment of, the insured, including examination or tests by a
"Licensed Health Care Practitioner" of our choice; and our receipt of
copies of any relevant medical records from a health care provider involved
in the insured's care. A Licensed Health Care Practitioner is a physician,
as defined in Section 1861(r)(1) of the Social Security Act, a registered
professional nurse, licensed social worker, or other individual who meets
such requirements as may be prescribed by the Secretary of Treasury, or
qualifications to our satisfaction.

The Original Benefit Amount will be reduced by any benefit payments made. The
balance remaining is the "Remaining Benefit Amount". There is no waiting period
to receive a benefit under this rider once all Conditions for Eligibility for
Benefit Payments have been satisfied and benefits will be paid retroactively to
the date of our receipt of all documentation provided by you that is necessary
to satisfy all Conditions for Eligibility for Benefit Payments. Furthermore, we
do not require proof of incurred expenses for you to receive benefits under
this rider. This rider's benefits will only be paid to the Owner of the Policy
and will only be paid by check or other method made available by us. Any
benefit to be paid is subject to the "Incontestability" provision of the
Policy.

The benefit payment options available to you under this rider are as follows:

(1) For a Chronic Illness Qualifying Event

You may elect to receive the benefit as either (a) Monthly Benefit Amounts or
(b) a one-time lump sum payment.

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<PAGE>

(a) Monthly Benefit Amounts - Provided all Conditions for Eligibility for
Benefit Payments have been satisfied, you may elect to receive accelerated
monthly benefit payments (the "Monthly Benefit Amount") without losing the
option of electing a one-time lump sum payment of the Remaining Benefit
Amount.

For each Benefit Period, defined below, in which you qualify to receive
benefits, you may elect a Monthly Benefit Amount equal to or greater than
the Minimum Monthly Benefit but not exceeding the Maximum Monthly Benefit.
Both of these amounts are shown on the Policy Specifications. Please note
that the Monthly Benefit Amount is not cumulative. The entire Maximum
Monthly Benefit may be taken, but if not, the remaining portion cannot be
added to future payments. By electing an amount less than the Maximum
Monthly Benefit, the amount of the Original Benefit Amount available for
later benefit payments (the "Remaining Benefit Amount" as noted above) will
be reduced more slowly; however, you should consider that you may or may not
re-qualify for future "Written Re-certifications". A "Written Certification"
is the Written Certification that we must receive and approve prior to the
start of each Benefit Period following the initial Benefit Period in order
for you to be eligible for Chronic Illness Monthly Benefit Amounts, provided
all other Conditions for Eligibility for Benefit Payments are met. "Written
Certification" is the documentation required, in a form satisfactory to us,
certifying that the insured is Chronically Ill as defined in the rider and
providing certain other information with respect to the insured's ongoing
health service needs. A "Benefit Period" is a period of time not to exceed
twelve consecutive months. Each such period begins on the Monthly
Anniversary Day after we receive all documentation provided by you necessary
to satisfy all Conditions for Eligibility for Benefit Payments. A new
Benefit Period will begin no earlier than the end of the current Benefit
Period.

The largest amount that may be elected is the Maximum Monthly Benefit. As
shown on the Policy Specifications, the Maximum Monthly Benefit may not
exceed the lesser of the shown percentage of the Original Benefit Amount or
the monthly equivalent of the Per Diem Limit (which is set annually on
January 1 by the Internal Revenue Service.) At the time of claim and for
each subsequent Benefit Period, we will notify you of your Maximum Monthly
Benefit.

Sixty (60) days prior to the end of each Benefit Period, we will send you
documentation for Written Re-certification. As part of this documentation,
if your Maximum Monthly Benefit is based on the Per Diem Limit and the Per
Diem Limit increases, we will provide you with an adjusted Maximum Monthly
Benefit. If your Maximum Monthly Benefit is based on the Per Diem Limit, the
Maximum Monthly Benefit in this documentation will be based on a 30 day
Policy Month. If you elect the Maximum Monthly Benefit, the actual amount
you receive will be adjusted based on the number of days in each Policy
Month.

Chronic Illness Monthly Benefit Amounts will end when any of the
following occur:

(1) the insured fails to meet any one of the Conditions for Eligibility
for Benefit Payments;

(2) you notify us to discontinue Monthly Benefit Amount payments; or

(3) this rider terminates.

In the event you request that we discontinue Monthly Benefit Amount payments
and then, at a later date, you desire to begin a new Benefit Period, we will
allow you to do so provided all of the Conditions for Eligibility for
Benefit Payments are met.

(b) One-Time Lump Sum - If you elect a one-time lump sum payment, the
Remaining Benefit Amount will be multiplied by the then applicable Chronic
Illness one-time lump sum actuarial discount factor when determining the
amount of the payment (as described in the discussion of actuarial discount
factors below). The payment of a one-time lump sum will cause termination of
both this rider and the Policy.

(2) For a Terminal Illness Qualifying Event

The maximum Terminal Illness benefit payment will be the lesser of 1) 50% of
the Remaining Benefit Amount; or 2) $250,000. Note: This benefit will only be
paid once and will be paid as a lump sum, if you elect less than the maximum
benefit, the remainder will not be available at a later date. The amount
accelerated will be greater than the Terminal Illness benefit payment and will
be determined by dividing the requested benefit payment

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<PAGE>

by the applicable Terminal Illness actuarial discount factor discussed below.
The amount accelerated will not be allowed to exceed the Remaining Benefit
Amount.

As described above, a Chronic Illness one-time lump sum actuarial discount
factor will be applied to the Chronic Illness one-time lump sum and a Terminal
Illness actuarial discount factor will be applied to the Terminal Illness
amount accelerated. These actuarial discount factors reflect the early payment
of benefits available under the Policy. The actuarial discount factor used will
be based on a mortality assumption and an interest rate which has been declared
by us in effect on the date the benefit payment is determined. The maximum
interest rate used shall not exceed the greater of:

a) the current yield on 90 day treasury bills available on the date the benefit
payment is determined; or

b) the current Maximum Statutory Adjustable Policy Loan Interest Rate (the
highest variable interest rate permitted under state law) in effect on the
date the benefit payment is determined. This maximum rate will not be more
than the higher of the following:

(1) The published monthly average (defined below) for the calendar month
ending 2 months before the date on which the rate is determined; or

(2) The rate used to compute the Fixed Account under the Policy for that
year plus 1 percent.

The published monthly average referred to above is defined as:

(a) Moody's Corporate Bond Yield Average - Monthly Average Corporates as
published by Moody's Investors Service, Inc., or any successor thereto;
or

(b) In the event that Moody's Corporate Bond Yield Average - Monthly
Average Corporates is no longer published, a substantially similar
average, established by regulation, or other method, issued by the
Insurance Department of the state or other jurisdiction where the Policy
is delivered.

Please note that, subject to meeting all Conditions for Eligibility for Benefit
Payments, defined below, you may elect to receive accelerated benefits as
follows:

(a) Chronic Illness in Monthly Benefit Amounts and then at a later date elect
the Chronic Illness one-time lump sum payment; or

(b) Chronic Illness Monthly Benefit Amounts and then at a later date elect to
receive the Terminal Illness benefit. In the same Policy Month, you may
receive both a Chronic Illness Monthly Benefit Amount and the Terminal
Illness benefit; or

(c) Chronic Illness Monthly Benefit Amounts, then at a later date elect to
receive the Terminal Illness benefit and finally receive the Chronic
Illness one-time lump sum payment; or

(d) Terminal Illness benefit and then at a later date elect to receive a
Chronic Illness benefit in either Monthly Benefit Amounts or the one-time
lump sum payment, or both.

Any Chronic Illness Monthly Benefit Amount or Terminal Illness benefit paid
under this rider will be first used to repay a portion of any outstanding
Indebtedness under the Policy. The portion to be repaid will be determined by
the product of the following:

[(A + B) / C] * D where:

A = is the balance in the Loan Account;

B = is any accrued loan interest not yet charged;

C = is the Remaining Benefit Amount immediately prior to a benefit
payment; and

D = is either i. or ii. noted below, depending on the Qualifying Event:

i. the Chronic Illness Monthly Benefit Amount; or

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<PAGE>

ii. the Terminal Illness benefit payment divided by the applicable
Terminal Illness actuarial discount factor.

If the Chronic Illness one-time lump sum benefit payment is elected, the
benefit payment will be reduced by any outstanding Indebtedness under the
Policy.

It's important to note that if any of the following riders are attached to your
Policy, this rider may have an impact on any benefits provided under such
rider.

Premium Reserve Rider: For Chronic Illness Monthly Benefit Amounts and Terminal
Illness benefit, you may elect to either include the Premium Reserve Rider
Accumulation Value in the calculation of the Original Benefit Amount or receive
a payment of the Premium Reserve Rider Surrender Value. Either action will
terminate the Premium Reserve Rider. If you elect to include the Premium
Reserve Rider Accumulation Value in the calculation of the Original Benefit
Amount, the Premium Reserve Rider Accumulation Value will be transferred to the
Policy's corresponding Fixed Account value, Sub-Account(s) value, and/or Loan
Account value and the Premium Reserve Rider's Transfer Load will be waived. If
you elect the Chronic Illness one-time lump sum payment, you will receive a
payment of the Premium Reserve Rider Surrender Value and the Premium Reserve
Rider will terminate.

Waiver of Monthly Deduction Rider: If you are on Total Disability as provided
under any Waiver of Monthly Deduction Rider, we will continue to waive the
monthly deductions falling due under the Policy once payment of an accelerated
benefit begins under this rider.

Enhanced Surrender Value Rider: Once payment of an accelerated benefit under
this rider begins, the Enhanced Surrender Value Rider will terminate.

Benefit payments under this rider will reduce certain policy and rider values
by multiplying such values by a Reduction Ratio noted below. The values that
will be reduced are as follows:

1. Specified Amount;

2. Fixed Account value;

3. The value of each Sub-Account;

4. Your "Cost Basis" in the Policy (the total amount of premiums or other
consideration you have paid for the Policy, less the total amount you have
received that was not included in your taxable income, and less any
reductions in values due to benefit payments under this rider);

5. Premiums paid to date;

6. No-Lapse Value* of any No-Lapse Enhancement Rider, if attached to the
Policy;

7. Reset Account Value* of any No-Lapse Enhancement Rider, if attached to the
Policy;

8. Guaranteed Minimum Death Benefit* of any No-Lapse Enhancement Rider, if
attached to the Policy; and

9. Reset Death Benefit* of any No-Lapse Enhancement Rider, if attached to the
Policy.

* As defined in the No-Lapse Enhancement Rider.

Any reduction will occur on the Monthly Anniversary Day prior to the Monthly
Deduction. The proportion by which the above values will be reduced will be
based on a Reduction Ratio, determined as follows:

A. Chronic Illness Benefit Payments:

Each Monthly Benefit Amount will reduce the above values by a Reduction
Ratio of (b-a)/b where:

a = is the Monthly Benefit Amount, and

b = is the Remaining Benefit Amount immediately prior to a benefit
payment.

B. Terminal Illness Benefit Payment:

The payment of a Terminal Illness benefit will reduce the above values by
a Reduction Ratio of (b-a)/b where:

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<PAGE>

a = is the Terminal Illness benefit payment divided by the applicable
Terminal Illness actuarial discount factor, and

b = is the Remaining Benefit Amount immediately prior to the benefit
payment.

Additional terms to consider:

For each Policy Month you receive a rider benefit payment, we will send you a
monthly report showing the change in current values under your Policy.

If a Death Benefit Option other than Death Benefit Option 1 (Level) is in
effect, the Death Benefit Option will be changed to Death Benefit Option 1
(Level) prior to the first benefit payment. No further Death Benefit Option
changes are permitted.

The Surrender Charges as shown on the Policy Specifications will be waived.

If there is any premium in a premium deposit fund, this premium will be
returned to you and will be treated as a normal return of premium and not as a
benefit payment under this rider. If we return any accrued interest with the
premium amount, the interest will be reported as taxable income to you.

You may not make a change in Specified Amount, a change in the insured's
Premium Class as shown on this rider's Policy Specifications, or add rider
benefits or increase the amount of rider benefits.

Further, we reserve the right to transfer all value of each Sub-Account(s) to
the Fixed Account.

If the death of the insured occurs prior to the date you satisfy all Conditions
for Eligibility for Benefit Payments, we will pay the Death Benefit Proceeds.
If the death of the insured occurs while benefits are being received under this
rider, we will pay the Death Benefit Proceeds, which may be less than the
Remaining Benefit Amount, and the Death Benefit Proceeds will be reduced by any
decrease in the Remaining Benefit Amount after the date of the insured's death.

This rider provides for monthly deductions to be waived in the event you are
receiving or have received Chronic Illness Monthly Benefits or a Terminal
Illness Benefit. Once benefit payments begin, the Policy's Monthly Deductions
will continue until the Policy's Net Accumulation Value, and, if attached to
the Policy, the No-Lapse Enhancement Rider's No-Lapse Value, less Indebtedness,
and Reset Account Value, less Indebtedness, are reduced to an amount
insufficient to pay the Monthly Deduction. After this occurs, the Policy will
not Lapse as long as this rider is In Force. We will stop billing you and will
not allow premium payments unless otherwise agreed to by you and us. However,
we will continue to accept loan repayments.

It is important to note that this rider does not provide an accelerated benefit
for Chronic Illness resulting from:

1. Intentionally self-inflicted injury or attempted suicide, while sane or
insane;

2. Any act or incident of insurrection or war, declared or undeclared;

3. The insured's participation in, or attempting to participate in, a felony,
riot, or insurrection; or

4. Alcoholism or drug addiction.

You may reinstate this rider as part of your Policy if the Policy is terminated
and reinstated. Such reinstatement will be subject to satisfactory evidence of
insurability and all other terms and conditions of the Policy to which it is
attached.

This rider and all rights provided under it will terminate automatically upon
whichever of the following occurs first:

1. The date you request In writing to terminate this rider;

2. The Policy's Specified Amount exceeds the Specified Amount Limit as shown on
the Policy Specifications;

3. The receipt of a Chronic Illness one-time lump sum payment which will cause
the termination of both this rider and the Policy to which it is attached;

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<PAGE>

4. The Remaining Benefit Amount is reduced to zero which will cause the
termination of both this rider and the Policy to which it is attached;

5. Termination of the Policy; or

6. The death of the insured which will cause Death Benefit Proceeds to become
payable under the Policy.

In addition, if you have received an accelerated benefit payment, this rider
will terminate on the earliest of the following:

1. The date you take a partial surrender under the Policy; or

2. The date you take a loan under the Policy.

Waiver of Monthly Deduction Rider. If desired, you must select this rider when
you initially apply for insurance. Monthly Deductions will be waived during
periods of covered total disability commencing prior to the Policy Anniversary
nearest the insured's 65th birthday. Charges for this rider, if elected, are
part of the Monthly Deductions.

Change of Insured Rider. With this rider, you may name a new insured in place
of the current insured. Underwriting and policy value requirements must be met.
The benefit expires on the anniversary nearest to the current insured's 65th
birthday. There is no separate charge for this rider; however, policy charges
applicable to the new insured may differ from charges applicable to the current
insured. Exercising the Change of Insured Rider is a fully taxable event.

Enhanced Surrender Value Rider. If desired, you must select this rider when you
initially apply for insurance. The rider provides an enhanced Surrender Value
without imposition of a Surrender Charge if you fully surrender your Policy
during the first five Policy Years (the "Enhanced Surrender Value Period").
This rider does not provide for enhanced Surrender Value for Partial
Surrenders, loans, or in connection with the exchange of this Policy for any
other policy. This rider will terminate at the earliest of the Full Surrender
of the Policy for the benefit provided by this rider; the end of the fifth
Policy Year; lapse of the Policy; or exchange, replacement, or any termination
of the Policy except for the benefits provided by the Change of Insured Rider.
In Policy Years 2-5, there will be a monthly charge per $1,000 of Initial
Specified Amount for this rider.

If the Policy is Fully Surrendered at any time during the Enhanced Surrender
Value Period, the Surrender Value payable on the date your Policy is
surrendered will equal:

1) the Policy's Accumulation Value; minus

2) Indebtedness.

The following example demonstrates hypothetical Accumulation Values and
Surrender Values with and without the Enhanced Surrender Value Rider during the
first five Policy Years of the policy described below:

Sample Policy

o Insured: Male Standard Non-tobacco, age 45

o Specified Amount: $1,000,000

o Benefit Selection Option: Not Elected

o Planned annual Premium Payment: $35,000

o No Indebtedness

<TABLE>
<CAPTION>
Accumulation Surrender Accumulation Surrender
Value Without Value Without Value With Value With
End of Year ESV Rider ESV Rider ESV Rider ESV Rider
------------- --------------- --------------- -------------- -----------
<S> <C> <C> <C> <C>
1 $ 31,640 $ 0 $31,640 $31,640
2 $ 65,215 $27,605 $64,593 $64,593
3 $100,863 $64,143 $99,576 $99,576
</TABLE>

34
<PAGE>

<TABLE>
<CAPTION>
Accumulation Surrender Accumulation Surrender
Value Without Value Without Value With Value With
End of Year ESV Rider ESV Rider ESV Rider ESV Rider
------------- --------------- --------------- -------------- -----------
<S> <C> <C> <C> <C>
4 $138,799 $102,969 $136,801 $136,801
5 $179,219 $144,289 $176,462 $176,462
</TABLE>

No-Lapse Enhancement Rider: This rider, which is automatically issued with
your Policy, provides you with a limited benefit in the event that your Policy
would otherwise lapse. It is a limited benefit in that it does not provide any
additional death benefit amount or any increase in your cash value. Also, it
does not provide any type of market performance guarantee. The duration of
lapse protection provided by this rider will be determined monthly, and will
vary based on Net Premium Payments made, interest credited, the amount of any
Partial Surrenders, and rates and fees for the rider. Payment of Premiums
higher than the Planned Premium and interest credited on Net Premiums will
increase the duration of lapse protection. Partial Surrenders and the costs of
other riders which have their own charges will reduce the duration of lapse
protection.

No-Lapse Protection. If the Net Accumulation Value under the Policy is
insufficient to cover the Monthly Deductions, the Policy will not lapse as long
as three conditions are met:

1) the rider has not terminated (see subsection headed "Rider Termination" for
more information about when the rider terminates);

2) the duration of the rider's lapse protection has not ended (that is, the
period during which lapse protection is provided by the rider - also known
as the "duration of lapse protection" - has not ended); see sub-section
headed "Duration of Lapse - Protection"); and

3) either the "No-Lapse Value" or the "Reset Account Value", less any
Indebtedness, is greater than zero.

We will automatically issue this rider with your Policy. There is no charge for
this rider.

The rider consists of the No-Lapse Value provision (the "No-Lapse Value
Provision") and the Reset Account Value provision (the "Reset Account Value
Provision"). Under this rider, your Policy will not lapse as long as either the
No-Lapse Value or the Reset Account Value, less any Indebtedness, is greater
than zero. If both the No-Lapse Value and the Reset Account Value, less any
Indebtedness, are zero or less, this rider will not prevent your Policy from
lapsing. The "No-Lapse Value" and "Reset Account Value" are reference values
only and are determined as described below. If the Net Accumulation Value is
insufficient to cover the Monthly Deductions, the No-Lapse Value and Reset
Account Value will be referenced to determine whether either provision of the
rider will prevent your Policy from lapsing.

If either the No-Lapse Value Provision or the Reset Account Value Provision of
this rider is actively preventing the Policy from lapsing, that provision will
trigger a death benefit which is different from the death benefit otherwise in
effect under the Policy. Each provision triggers a different death benefit, as
described in more detail below. The change to a death benefit triggered by
either provision under this rider is not permanent. If subsequent Premium
Payments create Accumulation Value sufficient to cover the accumulated, if any,
as well as current Monthly Deductions, the death benefit triggered by either
rider provision will no longer apply, and the death benefit will be restored to
the death benefit option in effect under the Policy. There is no limit on the
number of times we allow death benefits to be restored in this manner. Refer to
the section headed "Death Benefits" for more information.

We calculate the No-Lapse Value and Reset Account Value based on a set of rates
and fees which are reference rates and reference fees only and are used solely
for the purpose of calculating benefits provided by the rider. They will be
referred to as the "Reference Rates and Fees". The Reference Rates and Fees
used for this rider are not charges and fees imposed on your Policy and differ
from the rates and fees we use to calculate the Accumulation Value of the
Policy.

Each provision's value is based on a set of Reference Rates and Fees unique to
that provision. The No-Lapse Value Reference Rates and Fees are the No-Lapse
Value Premium Credit, the No-Lapse Premium Load and the No-Lapse Monthly
Deduction for a policy month (which includes the No-Lapse Monthly Cost of
Insurance, the cost of any additional benefits provided by other riders that
have their own charges, and the No-Lapse Monthly Administrative

35
<PAGE>

Fee). The Reset Account Value Reference Rates and Fees are the Reset Account
Premium Load and the Reset Account Monthly Deduction for a policy month (which
includes the Reset Account Monthly Cost of Insurance, the cost of any
additional benefits provided by other riders that have their own charges, and
the Reset Account Monthly Administrative Fee).

At the time we issue the Policy, we fix the schedules of Reference Rates and
Fees for the life of the Policy. Refer to the No-Lapse Enhancement Rider form
issued with your Policy for more information about the actual schedules of
Reference Rates and Fees applicable to your Policy.

The No-Lapse Value. On each Monthly Anniversary Day (see section headed "Policy
Charges and Fees" for a discussion of "Monthly Anniversary Day"), the No-Lapse
Value will be calculated as 1), plus 2), plus 3), minus 4), minus 5), minus 6)
where:

1) is the No-Lapse Value on the preceding Monthly Anniversary Day;

2) is all premiums received since the preceding Monthly Anniversary Day and is
either increased by the No-Lapse Value Premium Credit or decreased by the
No-Lapse Value Premium Load based on the Policy Years as shown in the
actual schedules of Reference Rates and Fees applicable to your policy;

3) is accumulated interest credited to the No-Lapse Value since the preceding
Monthly Anniversary Day;

4) is the amount of any Partial Surrenders (i.e., withdrawals) under the Policy
since the preceding Monthly Anniversary Day;

5) is the No-Lapse Monthly Deduction for the month following the Monthly
Anniversary Day; and

6) is the Surrender Charge for any Reduction in Specified Amount on the Monthly
Anniversary Day.

Reductions in Specified Amounts only become effective on the Monthly
Anniversary Day on or next following the day on which the reduction is approved
(see section headed "Surrender Charges - Reduction in Specified Amount" for
further information).

On any day other than a Monthly Anniversary Day, the No-Lapse Value will be the
No-Lapse Value as of the preceding Monthly Anniversary Day, plus all premiums
received since the preceding Monthly Anniversary Day (either increased by the
No-Lapse Value Premium Credit or decreased by the No-Lapse Value Premium Load),
less Partial Surrenders, plus accumulated interest credited to the No-Lapse
Value.

The No-Lapse Value on the Policy Date will be the initial premium received,
plus the No-Lapse Value Premium Credit, less the No-Lapse Monthly Deduction for
the first policy month.

The No-Lapse Monthly Deduction is the No-Lapse Monthly Cost of Insurance, plus
the monthly charge, if any, for other riders, and plus the No-Lapse Monthly
Administrative Fee. The No-Lapse Monthly Cost of Insurance and the No-Lapse
Monthly Administrative Fee are Reference Rates and Fees only, are not charges
and fees imposed on your Policy, and are used solely for the purpose of
calculating benefits provided by the rider. These Reference Rates and Fees
differ in amount from the policy Cost of Insurance Charge and policy monthly
Administrative Fee used to calculate Accumulation Value under your Policy.

The Reset Account Value. On each Monthly Anniversary Day (see section headed
"Policy Charges and Fees" for a discussion of "Monthly Anniversary Day"), the
Reset Account Value will be calculated as 1), plus 2), plus 3), minus 4), minus
5), minus 6) where:

1) is the Reset Account Value on the preceding Monthly Anniversary Day;

2) is all Net Premium Payments received since the preceding Monthly Anniversary
Day;

3) is accumulated interest credited to the Reset Account Value;

4) is the amount of any Partial Surrenders (i.e. withdrawals) under the Policy
since the preceding Monthly Anniversary Day;

5) is the Reset Account Monthly Deduction for the month following the Monthly
Anniversary Day; and

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<PAGE>

6) is the Surrender Charge for any Reduction in Specified Amount on the Monthly
Anniversary Day.

On any day other than a Monthly Anniversary Day, the Reset Account Value will
be the Reset Account Value as of the preceding Monthly Anniversary Day, plus
all Net Premium Payments received since the preceding Monthly Anniversary Day,
less Partial Surrenders, plus accumulated interest credited to the Reset
Account Value.

The Reset Account Value on the Policy Date will be the initial Net Premium
Payment received less the Reset Account Monthly Deduction for the first policy
month.

The Reset Account Monthly Deduction is the Reset Account Monthly Cost of
Insurance, plus the monthly charge, if any, for other riders, and plus the
Reset Account Monthly Administrative Fee. The Reset Account Monthly Cost of
Insurance and the Reset Account Monthly Administrative Fee are Reference Rates
and Fees only, are not charges and fees imposed on your Policy, and are used
solely for the purpose of calculating benefits provided by the rider. These
Reference Rates and Fees differ in amount from the policy Cost of Insurance
Charge and policy monthly Administrative Fee used to calculate Accumulation
Value under your Policy.

On each Policy Anniversary, the Reset Account Value may increase to reflect
positive investment performance. If the Reset Account Value on any Policy
Anniversary is less than the Accumulation Value on that same Policy
Anniversary, the Reset Account Value will be increased to equal the
Accumulation Value. Refer to the No-Lapse Reset Account Provision of the
No-Lapse Enhancement Rider attached to your Policy.

Death Benefits Under the Policy and the Rider. You will select a "guaranteed
minimum death benefit" on the application for your policy. This Guaranteed
Minimum Death Benefit will be used in determining the actual Death Benefit
Proceeds provided by the No-Lapse Value Provision of this rider. The Guaranteed
Minimum Death Benefit you select under the provisions of the No-Lapse
Enhancement Rider will only affect the Death Benefit Proceeds payable under the
terms of this rider if the rider is actively preventing the Policy from
lapsing. It will be shown on the policy specifications page.

The initial Guaranteed Minimum Death Benefit you select must be between 70% and
100% of the Initial Specified Amount for the Policy. The higher the percentage
you select, the higher the ongoing Premium Payments which will be required to
maintain a No-Lapse Value and/or Reset Account Value greater than zero. If the
policy Specified Amount is later decreased below the Guaranteed Minimum Death
Benefit, the Guaranteed Minimum Death Benefit will automatically decrease to
equal the Specified Amount as of the same effective date. If the policy
Specified Amount is later increased, the Guaranteed Minimum Death Benefit will
not automatically increase.

If the Net Accumulation Value is sufficient to cover the accumulated, if any,
and current Monthly Deductions, the death benefit payable will be determined by
the death benefit option in effect. Refer to the section headed "Death
Benefits" for more information.

If the Net Accumulation Value is insufficient to cover the accumulated, if any,
and current Monthly Deductions, the No-Lapse Value and Reset Account Value will
be referenced to determine whether either provision of the rider will prevent
your Policy from lapsing. Each provision triggers a different death benefit.

If the No-Lapse Value Provision is actively keeping the Policy from lapsing,
the death benefit (the "No-Lapse Provision Death Benefit") is the Guaranteed
Minimum Death Benefit less any Indebtedness and less any Partial Surrenders
(i.e., withdrawals) received by the Owner after the date of insured's death.
This death benefit may be less than the specified amount of the Policy.

If the Reset Account Value Provision is actively keeping the Policy from
lapsing, the death benefit (the "Reset Account Value Provision Death Benefit")
is the greater of:

1) (a) the lesser of

(i) the current Specified Amount and

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<PAGE>

(ii) Initial Specified Amount, minus

(b) Indebtedness, and minus

2) an amount equal to the Reset Account Value multiplied by the applicable
percentage shown in the corridor percentages table of the policy
specifications, less any Indebtedness and less any Partial Surrenders after
the date of death.

If the requirements of both of the No-Lapse Value Provision and Reset Account
Value Provision are met, the death benefit payable will be the greater death
benefit amount triggered by either of the provisions. Refer to the section
headed "Death Benefits" for more information.

If this No-Lapse Enhancement Rider prevents the Policy from lapsing, and
subsequent Premium Payments are made such that the Accumulation Value is
sufficient to cover the Monthly Deductions, the death benefit payable will be
determined by the death benefit option in effect. During the period that the
rider is preventing the Policy from lapsing, the Monthly Deductions under your
Policy, which consist of the monthly Cost of Insurance Charge, the monthly cost
of any riders, and the monthly Administrative Fee, will continue and will be
accumulated. A statement will be sent to you, at least annually, which reflects
the accumulated amount of those deductions. If the rider terminates for any
reason, the accumulated and current Monthly Deduction would have to be paid to
prevent lapse, and we will send you a notice stating the amount of Premiums you
would be required to pay to keep your Policy in force (see section headed
"Lapse and Reinstatement").

The following examples demonstrate for the policy described below the death
benefit under the policy as well as the death benefits calculated under both
the No-Lapse Value Provision and the Reset Account Value Provision of the
No-Lapse Enhancement Rider. The column headed "No-Lapse Enhancement Rider Death
Benefit" shows the amount of the benefit which would be paid if the Rider were
preventing lapse. That death benefit is the greater of the amounts provided by
the No-Lapse Value Provision and the Reset Account Value Provision.

o Insured: Male Standard Non-tobacco, age 45

o Specified Amount: $1,000,000

o Annual Premium Payment: $12,500 paid annually at or before the beginning of
each of the first 30 Policy Years

o No Indebtedness on the Policy

o Death Benefit Option: 1 (level)

o Benefit Selection Option: Not Elected

o Assumed Investment Return: 8.00% gross (7.31% net)

o No-Lapse Provision Guaranteed Minimum Death Benefit Percentage = 90% of
Initial Specified Amount

<TABLE>
<CAPTION>
End of Accumulation Policy Death
Year Age Value Benefit
-------- ----- -------------- --------------
<S> <C> <C> <C>
10 55 117,380 1,000,000
20 65 349,958 1,000,000
30 75 820,892 1,000,000
40 85 1,648,145 1,730,552
50 95 3,266,293 3,298,956

<CAPTION>
No-Lapse Reset Account No-Lapse
End of Provision Value Provision Enhancement
Year Death Benefit Death Benefit Rider Death Benefit
-------- --------------- ----------------- --------------------
<S> <C> <C> <C>
10 900,000 1,000,000 1,000,000
20 900,000 1,000,000 1,000,000
30 900,000 1,000,000 1,000,000
40 900,000 - 900,000
50 900,000 - 900,000
</TABLE>

The above example shows a policy that has sufficient Accumulation Value to
remain in force. Thus, the No-Lapse Enhancement Rider is not needed to prevent
the policy in the example above from lapsing. In this example, the death
benefit option selected by the Owner will determine the amount payable upon the
death of the insured.

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<PAGE>

The example below uses all of the same assumptions as are used for the example
above, except for the Assumed Investment Return set forth below:

o Assumed Investment Return: 0.00% gross (-0.69% net)

<TABLE>
<CAPTION>
End of Accumulation Policy Death
Year Age Value Benefit
-------- ----- -------------- --------------
<S> <C> <C> <C>
10 55 73,030 1,000,000
20 65 132,507 1,000,000
30 75 129,772 1,000,000
40 85 - -
50 95 - -

The second example shows a policy in which the Accumulation Value declines to 0
in between policy years 30 and 40. At that point, the No-Lapse Enhancement
Rider will keep the policy from lapsing. The No-Lapse Enhancement Rider Death
Benefit is the greater of the No-Lapse Value Provision Death Benefit and the
Reset Account Value Death Benefit. Therefore, once the rider begins to prevent
lapse, it will provide a Guaranteed Minimum Death Benefit of $900,000 (as
elected by the Owner at the time of application for the policy). In this
example, the death benefit provided by the No-Lapse Enhancement Rider is less
than the death benefit which would have been payable under the death benefit
selected by the Owner had the Accumulation Value been sufficient to keep the
policy in force without the No-Lapse Enhancement Rider.

The No-Lapse Enhancement Rider can provide benefits when your policy's
Accumulation Value is insufficient to prevent a Policy Lapse, which would
otherwise terminate all policy coverage. Rider benefits can prevent a Policy
Lapse when the policy's Accumulation Value is reduced by deductions for policy
charges and fees, poor investment performance, Partial Surrenders of
Accumulation Value, Indebtedness for Policy Loans, or any combination of these
factors.

Automatic Rebalancing Required. You must maintain Automatic Rebalancing in
order to keep this rider in effect. Automatic Rebalancing will be in effect
when the Policy is issued. If you discontinue Automatic Rebalancing after the
Policy is issued, this rider will terminate. After this rider terminates, the
Policy will remain in force only if the Accumulation Value is sufficient to
cover the Monthly Deductions. Refer to the section headed "Optional Sub-Account
Allocation Programs" for more information about Automatic Rebalancing.

We reserve the right to restrict your allocation to certain Sub-Accounts to a
maximum of 40% of the policy Accumulation Value in order to keep this rider in
effect. While we currently do not restrict your allocation rights, your Policy
will include a listing of the Sub-Accounts available as of the Policy Date to
which allocation may be so restricted. The decision to enforce this restriction
will be based on an annual review of the Separate Account investments of all
Owners of this product. If we determine that the investments of all Owners are
highly concentrated in certain Sub-Accounts, then Sub-Accounts with higher
concentrations than anticipated will be subject to the restriction. Any
restriction will apply to all Owners of this product. If such a restriction is
put in place in the future, you will be notified in writing and advised if it
is necessary to reallocate the policy Accumulation Value or subsequent Premium
Payments among Sub-Accounts which are not subject to the restriction and
advised of the steps you will need to take, if any, in order to keep the rider
in effect. We will not reallocate the Accumulation Value to comply with any
such restriction except pursuant to your instructions. You may provide
instructions for reallocation in writing, or electronically, if you have
previously authorized telephone or other electronic transfers in writing. If
you choose not to reallocate the Accumulation Value of your Policy to comply
with a Sub-Account restriction, this rider will terminate. If this rider is
actively preventing the Policy from lapsing and this rider terminates as a
result of the Owner's failure to comply with a Sub-Account restriction, then
the Policy will lapse.

Duration of No-Lapse Protection. The duration of the No-Lapse coverage will be
determined monthly by referencing the No-Lapse Account Value and the Reset
Account Value. The duration is determined by projecting the first Monthly
Anniversary Day on which future deductions for the rider rates and fees would
cause both the No-Lapse Value and Reset Account Value to reach zero. Because
the duration is recalculated on a monthly basis, higher

39
<PAGE>

Premium Payments and credited interest will increase the duration, while
Partial Surrenders and adjustments for rider Reference Rates and Fees will
reduce the duration. In general, later Premium Payments are credited with less
interest over time, resulting in a lower No-Lapse Value and Reset Account
Value, and a shorter duration of No-Lapse protection.

The duration of the lapse protection provided by this rider may be reduced if:

1) Premiums or other deposits are not received on or before their due date; or

2) you initiate any policy change that decreases the No-Lapse Value or Reset
Account Value under the Policy. These changes include, but are not limited
to, Partial Surrenders, Policy Loans, increases in Specified Amount, and
changes in death benefit option.

The Company will determine the duration of the lapse protection based on the
situation in 1) and 2) above by recalculating the No-Lapse Value and the Reset
Account Value. In general, later Premium Payments are credited with less
interest over time, resulting in a lower No-Lapse Value and Reset Account
Value. A lower No-Lapse Value or Reset Account Value will reduce the duration
of lapse protection. The following example shows the impact of delayed Premium
Payments on the duration of lapse protection:

Sample Policy

o Insured: Male Standard Non-tobacco, age 45

o Specified Amount: $1,000,000

o Benefit Selection Option: Not elected

o Planned annual Premium Payment: $8,000

Duration of lapse protection:

1) if Premiums are received on the planned payment date each year: 499 months;
or

2) if Premiums are received 30 days after the planned payment date each year:
495 months.

The impact of late Premium Payments on the duration of the lapse protection
varies by policy. If both the No-Lapse Value and the Reset Account Value, less
any Indebtedness, are zero or less, this rider will not prevent your Policy
from lapsing. Payment of sufficient additional Premiums while this rider
remains in force will increase one or both of the values to an amount greater
than zero, and the rider will provide lapse protection. You may obtain
information about your policy's current duration of lapse protection and the
impact that late Premium Payments may have on that duration by requesting a
personalized policy illustration from your financial advisor.

Rider Termination. This rider and all rights provided under it will terminate
automatically upon the earliest of the following:

1) the insured reaches age 121; or

2) surrender or other termination of the Policy; or

3) Automatic Rebalancing is discontinued; or

4) an allocation restriction requirement is not met within 61 days of
notification to you of such a requirement.

If the Policy terminates and is reinstated, this rider will likewise be
reinstated unless the rider terminated before the Policy terminates.

Benefit Selection Option. When you apply for the Policy, you may elect the
Benefit Selection Option.

With this option, you can select a balance between potentially greater
Accumulation Value and the death benefit protection provided by the No-Lapse
Enhancement Rider. When considering this option, you should consider the amount
of market risk which is appropriate for you and your circumstances. This option
is designed to reduce the charges for the per $1,000 of Specified Amount
monthly administrative expense fee (the "Monthly Administrative

40
<PAGE>

Expense Fee") deducted from your Policy and thereby reduce the cost of the
death benefit provided by your Policy. Therefore, if you elect to reduce the
death benefits provided by this rider by electing a Benefit Selection Option
percentage greater than zero, you will reduce the monthly charges deducted from
your policy's Accumulation Value.

By reducing the monthly charges deducted from your policy's Accumulation Value,
you have the opportunity to have a larger Accumulation Value allocated to the
Fixed Account and invested in the Sub-Accounts, but will receive a reduced
death benefit protection provided by the No-Lapse Enhancement Rider.

When you elect this option, you choose to reduce the benefits provided by the
No-Lapse Enhancement Rider in exchange for reduced Monthly Administrative
Expense Fees. The reduced policy Monthly Administrative Expense Fee will be
displayed in your policy specifications. However, when the Benefit Selection
Option is elected, your choice of a Benefit Selection Option percentage greater
than zero will increase the No-Lapse reference per $1,000 of Specified Amount
Monthly Administrative Fees, and, therefore, the premiums which you must pay in
order to meet the requirements of the No-Lapse Enhancement Rider will increase.
(Refer to the section headed "No-Lapse Enhancement Rider" for discussion of how
Rider values are calculated.) The higher the percentage you select for the
Benefit Selection Option, the larger the increase in the No-Lapse reference per
$1,000 of Specified Amount Monthly Administrative Fees and the higher the
Premiums you must pay in order to meet the requirements of the Rider.

The following example shows two policies on the same insured. In the first
example, the Benefit Selection Option was not elected; and in the second
example the Benefit Selection Option was elected:

<TABLE>
<CAPTION>
Male, 45 Year Old, Standard Non-tobacco
No-Lapse
Monthly Administrative
Benefit Selection Monthly Administrative Expense
Option Expense Fee Reference Fee Result
<S> <C> <C> <C>
Election: None $0.12583 per $0.33167 per This option offers the best No-Lapse
thousand of Specified thousand of Specified protection available. The price of the
Amount (higher) Amount (lower) protection is reflected in the higher
Monthly Administrative Expense Fee.
Election: 100% $0.04000 per $0.34917 per This option offers the least amount of
thousand of Specified thousand of Specified No-Lapse protection. The Monthly
Amount (lower) Amount (higher) Administrative Expense Fee is
reduced in exchange. Therefore, this
option allows more money to be
invested in the Sub-Accounts or
allocated to the Fixed Account.
However, the premiums which you
must pay in order to satisfy the No-
Lapse requirements of the rider will
increase.
</TABLE>

You elect this option by selecting a percentage from 1 to 100%. This election
must be made at policy issue and is irrevocable. The impact of selecting a
Benefit Selection Option percentage greater than zero on your Policy is best
shown in an illustration. Please ask your registered representative for
illustrations which demonstrate the impact of electing various Benefit
Selection Option percentages greater than zero.

If elected, the percentage you select under this option will be shown in your
policy specifications. Once your Policy is issued with the Benefit Selection
Option, you may not change the percentage you selected nor may you terminate
your election.

Overloan Protection Rider. If this rider is issued with your Policy, you meet
the requirements as described in this rider and have elected this benefit, your
Policy will not lapse solely based on Indebtedness exceeding the

41
<PAGE>

Accumulation Value less the Surrender Charges. It is a limited benefit, in that
it does not provide any additional death benefit or any increase in
Accumulation Value. Also, it does not provide any type of market performance
guarantee.

We will automatically issue this rider with your Policy in states where it is
available. There is no charge for adding this rider to your Policy. However, if
you choose to elect this benefit, there is a one-time charge which will not
exceed 5.0% of the then current Accumulation Value. Once you elect the benefit,
certain provisions of your Policy will be impacted as described in the rider.

Premium Reserve Rider: We will automatically issue this rider with your Policy
in states where it is available. The rider allows you to pay Premiums in
addition to those you plan to pay for your Policy and to have such amounts
accumulate in the same manner as if they had been allocated to your Policy
without, as detailed in the rider, being subject to all charges and expenses of
your Policy. For example, this rider can be used to fund future Premium
Payments if needed while retaining the flexibility to withdraw such funds from
the rider without reducing the policy's Specified Amount (or being subject to
withdrawal fees or surrender charges) in the event the funds are not needed due
to favorable investment performance. Premiums allocated to the Premium Reserve
Rider do not increase the policy's Accumulation Value and, therefore, will not
decrease the Net Amount at Risk. Since the Net Amount at Risk will not be
reduced, current Cost of Insurance Charges will not be reduced. However, the
policy's death benefit will be increased by the Premium Reserve Rider
Accumulation Value less Indebtedness. The Premium Reserve Rider Accumulation
Value is the sum of the (i) values of sub-accounts created for the rider which,
but for having been created specifically for the rider, are in all other
respects identical to the Sub-Accounts (the "Premium Reserve Rider
Sub-Accounts"), and (ii) values held in the portion of the Fixed Account
created specifically for the rider (the "Premium Reserve Rider Fixed Account").

A Premium Load of 4.0% (known as the Premium Reserve Rider Premium Load) will
be deducted from each amount allocated to this rider.

Net Premium Reserve Rider Premiums will be allocated to the Premium Reserve
Rider Sub-Accounts and/or the Premium Reserve Rider Fixed Account using the
same premium allocation instruction that you have provided to us for allocating
Premiums which you direct to your Policy.

Calculations of the values of the Premium Reserve Rider Sub-Accounts apply the
same daily mortality and expense risk charge as would have been deducted if the
Premiums had been allocated to your Policy; however, the Monthly Deductions for
your Policy, which include charges for the cost of insurance and the
Administrative Fee, and charges for riders to your Policy other than this rider
will not be reflected.

You may request us to transfer all or part of the Premium Reserve Rider's
Accumulation Value to your Policy at any time. Transfers of the rider's
Accumulation Value to your Policy are subject to a deduction of 3.0% from each
amount transferred (the 3.0% charge is called the Premium Reserve Rider
transfer load) if such transfers are made (either automatically, as discussed
below, or at your request) in the first ten Policy Years.

No other policy charges or fees will be deducted from the amount allocated to
the Premium Reserve Rider.

In addition, after Policy Year 10, subject to certain limitations (which relate
to meeting the requirement that sufficient value remains to maintain the
duration of lapse protection provided under the No-Lapse Enhancement Rider
until the insured reaches age 121 - see section headed "No-Lapse Enhancement
Rider"), you may request transfers from the policy's Net Accumulation Value to
the Premium Reserve Rider for allocation to the Premium Reserve Rider's
Sub-Accounts and Fixed Account. Transfers between the Policy and the rider will
not be counted against the number of free transfers permitted by the Policy.

The rider provides for the automatic transfer of the entire Accumulation Value
of the rider to the Policy in the event:

1) the Net Accumulation Value under your Policy is insufficient to maintain
your Policy in force and the No-Lapse Enhancement Rider described above is
not at the time preventing your Policy from lapsing; and

2) you do not pay at least the amount set forth in the lapse notice and your
payment is not received by us before the end of the Grace Period.

42
<PAGE>

If the Premium Reserve Rider Accumulation Value (less the Premium Reserve Rider
transfer load of 3.0% if the transfer is made during the first 10 Policy Years)
on the day the Grace Period ends is insufficient to meet the amount then due,
your Policy will lapse without value.

If this rider is in force at the time you request a loan on or Partial
Surrender of your policy, any such loan or Partial Surrender will be made first
from any Premium Reserve Rider Accumulation Value and when the Premium Reserve
Rider Accumulation Value is reduced to zero, then from the Accumulation Value
of your Policy. Loan interest will be charged and credited to any Premium
Reserve Rider loans on the same basis as the Policy. Please refer to the
section headed "Policy Loans" for a more detailed discussion of Policy Loans,
including interest charged on Policy Loans.

In the event of the death of the insured while the rider is in force, any
Premium Reserve Rider Accumulation Value less Indebtedness on the date of death
will be added to the death benefit if Death Benefit Option 1 is in force and
will be added to the policy's Accumulation Value less Indebtedness on the date
of death if Death Benefit Option 2 is in force. If the death benefit is paid
pursuant to the No-Lapse Enhancement Rider, the Premium Reserve Rider
Accumulation Value less Indebtedness will be added to the death benefit payable
under that rider.

The Premium Reserve Rider will terminate at the earlier of the date your Policy
terminates; the date the entire Premium Reserve Rider Accumulation Value is
automatically transferred to your Policy to maintain your Policy in force; or
your written request to terminate the rider is received. Once terminated, the
rider may not be reinstated, and no further Premium Payments may be allocated
to it.

Finally, the amount of Premiums you may pay, whether you direct them to your
Policy or to your Premium Reserve Rider, are subject to limits which are
discussed in the Tax Issues section of the prospectus.

As with your Policy, you bear the risk that the investment results of the
Sub-Accounts you have chosen are adverse or are less favorable than
anticipated. Adverse investment results will impact the Accumulation Value of
the rider and, therefore, the amount of rider Accumulation Value which may be
available to prevent your Policy from lapsing or for providing policy benefits.

The Premium Reserve Rider, as discussed above, can help provide additional
protection against lapse of your Policy. The Premium Reserve Rider Accumulation
Value generated by the additional Premiums you pay to the rider may be
transferred to the Policy either through (i) your voluntarily requesting us to
transfer available Premium Reserve Rider Accumulation Value to the Policy in
the amount needed to prevent lapse (because, for example, you do not have the
funds outside of the Policy to make the Premium Payment required to keep the
Policy in force), or (ii) the rider's provision for automatically transferring
all available Premium Reserve Rider Accumulation Value to the Policy should
those values be needed to prevent lapse of the Policy (because, for example,
the payment you do make either is less than the amount requested or is not
received by the time set by the terms of the Policy). However, as noted above,
if such values are transferred pursuant to the Premium Reserve Rider's
automatic transfer provision, the Premium Reserve Rider will terminate, and the
Owner will permanently lose the ability to allocate any future Premium Payments
to the rider.

As a hypothetical example of how the Premium Reserve Rider might help prevent
lapse of your Policy, assume that you have had your policy for 11 years and
that you have allocated additional Premiums to the rider so that your Premium
Reserve Rider Accumulation Value at the end of Policy Year 11 is $25,000.
Further assume that the No-Lapse Enhancement Rider is no longer preventing your
Policy from lapsing, that the Premium required to maintain your Policy in force
that is due at the beginning of Policy Year 12 is $15,000, and that you have
decided that you wish to minimize your current cash outlays. If you do not pay
the $15,000 Premium, you will receive a Lapse Notice which will tell you that
you need to make a Premium Payment of $15,000 to your Policy. If you wish, you
could request (before the end of the Grace Period) that we transfer $15,000 of
the Premium Reserve Rider Accumulation Value to the Policy. If you do not so
request, we will automatically transfer the entire Premium Reserve Rider
Accumulation Value of $25,000 to the Policy (and your Premium Reserve Rider
will terminate). In this example, the transfer of $15,000 from your Premium
Reserve Rider Accumulation Value to your Policy will avoid lapse of the Policy.

43
<PAGE>

As a further hypothetical example, again assume that you have had your Policy
for 11 years but that you have allocated fewer additional Premiums to the rider
so that your Premium Reserve Rider Accumulation Value is $10,000. Continuing
the assumption that the No-Lapse Enhancement Rider is no longer preventing your
Policy from lapsing, that the Premium required to maintain your Policy in force
that is due at the beginning of Policy Year 12 is $15,000, and that you wish to
minimize your current cash outlays, your Premium Reserve Rider Accumulation
Value would provide (either by transfer at your specific request or through
automatic transfer) $10,000 towards the Premium due. But in this example, you
would have to then pay the balance of the Premium due, that is $5,000, to us
from your savings or from another source outside of the Policy to avoid lapse
of your Policy.

You should discuss with your financial advisor the needs which purchasing the
Policy will meet, including the need to provide to beneficiaries a guaranteed
death benefit which does not depend upon growth of the policy's Accumulation
Value. Policy illustrations, which the financial advisor can prepare, will help
determine the amount of Premiums which should be allocated to paying the costs
of the Policy for the death benefit you need. Once that need for a guaranteed
death benefit is met and Premium requirements determined, the Owner then could
consider whether to allocate additional funds to the Rider.

You should carefully weigh the balance between allocating Premiums to the
Policy and Premiums to the rider. Premiums allocated to the Premium Reserve
Rider may be withdrawn without reducing the Specified Amount (which might be
the case if those Premiums had been allocated to the Policy). In addition,
Premiums allocated to the rider initially are charged only with the 4.0%
Premium Reserve Rider Premium Load and will only be charged the 3.0% Premium
Reserve Rider Transfer Load if transfers are voluntarily made during the first
10 Policy Years (or are automatically transferred to help prevent Policy
Lapse). And Premiums allocated to the rider become part of the Premium Reserve
Rider Accumulation Value and that value (less any Indebtedness) would be paid
upon the death of the insured in addition to the death benefit paid.

However, Premiums allocated to the rider do not increase the policy's
Accumulation Value and, therefore, would not reduce the Cost of Insurance
Charges. An illustration can show the impact that paying a higher level of
Premiums would have on the policy's cost of insurance: that is as Accumulation
Values in the Policy increase (through positive investment results and/or
allocating more Premiums to the Policy), the Net Amount at Risk (that is, the
difference between the death benefit and the Accumulation Value) will decrease,
thereby decreasing the Cost of Insurance Charges. Decreasing policy charges
increases the amount of policy Accumulation value available for allocation to
the Sub-Accounts, and thereby increases the amount available for investment,
subject to your tolerance for risk.

Your financial advisor can prepare illustrations which would reflect the
potential impact that different allocations of Premium between the Policy and
the Premium Reserve Rider might have, as well as illustrate the impact rates of
return selected by you might have on the policy's benefits and the Rider's
Accumulation Value.

Continuation of Coverage

If the insured is still living at age 121, and the policy is still in force and
has not been surrendered, the policy will remain in force until policy
surrender or death of the insured. There are certain changes that will take
place:

1) we will no longer accept Premium Payments;

2) we will make no further deductions;

3) policy values held in the Separate Account will be transferred to the Fixed
Account;

4) we will continue to credit interest to the Fixed Account; and

5) we will no longer transfer amounts to the Sub-Accounts.

However, loan interest will continue to accrue. Provisions may vary in certain
states.

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<PAGE>

Termination of Coverage

All policy coverage terminates on the earliest of:

1) Surrender of the Policy;

2) death of the insured; or

3) failure to pay the necessary amount of Premium to keep your Policy in force.

State Regulation

The state in which your Policy is issued will govern whether or not certain
features, riders, charges and fees will be allowed in your Policy. You should
refer to your Policy for these state specific features.

PREMIUMS
You may select and vary the frequency and the amount of Premium Payments and
the allocation of Net Premium Payments. After the initial Premium Payment is
made there is no minimum Premium required, except to keep the Policy in force.
Premiums may be paid any time before the insured attains age 121.

The initial Premium must be paid for policy coverage to be effective.

Allocation of Net Premium Payments

Your "Net Premium Payment" is the portion of a Premium Payment remaining after
deduction of the Premium Load. The Net Premium Payment is available for
allocation to the Sub-Accounts or the Fixed Account.

You first designate the allocation of Net Premium Payments among the
Sub-Accounts and Fixed Account on a form provided by us for that purpose.
Subsequent Net Premium Payments will be allocated on the same basis unless we
are instructed otherwise, in writing. You may change the allocation of Net
Premium Payments among the Sub-Accounts and Fixed Account at any time. The
amount of Net Premium Payments allocated to the Sub-Accounts and Fixed Account
must be in whole percentages and must total 100%. We credit Net Premium
Payments to your Policy as of the end of the "Valuation Period" in which it is
received at our Administrative Office. The end of the Valuation Period is 4:00
p.m., Eastern Time, unless the New York Stock Exchange closes earlier.

The Valuation Period is the time between "Valuation Days". A Valuation Day is
every day on which the New York Stock Exchange is open and trading is
unrestricted. Your policy values are calculated on every Valuation Day.

Planned Premiums; Additional Premiums

Planned Premiums are the amount of periodic Premium (as shown in the policy
specifications) you choose to pay the Company on a scheduled basis. This is the
amount for which we send a Premium reminder notice. Premium Payments may be
billed annually, semi-annually, or quarterly. You may arrange for monthly
pre-authorized automatic Premium Payments at any time.

In addition to any Planned Premium, you may make additional Premium Payments.
These additional payments must be sent directly to our Administrative Office,
and will be credited when received by us.

Unless you specifically direct otherwise, any payment received (other than any
Premium Payment necessary to prevent, or cure, Policy Lapse) will be applied as
Premium and will not repay any outstanding loans. There is no Premium Load on
any payment which you specifically direct as repayment of an outstanding loan.

You may increase Planned Premiums, or pay additional Premiums, subject to the
certain limitations. We reserve the right to limit the amount or frequency of
additional Premium Payments.

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<PAGE>

We may require evidence of insurability if any payment of additional Premium
(including Planned Premium) would increase the difference between the Specified
Amount and the Accumulation Value. If we are unwilling to accept the risk, your
increase in Premium will be refunded without interest.

We may decline any additional Premium (including Planned Premium) or a portion
of a Premium that would cause total Premium Payments to exceed the limit for
life insurance under federal tax laws. Our test for whether or not your Policy
exceeds the limit is referred to as the Guideline Premium Test. The excess
amount of Premium will be returned to you. We may accept alternate instructions
from you to prevent your Policy from becoming a MEC (Modified Endowment
Contract). Refer to the section headed "Tax Issues" for more information.

Policy Values

Policy value in your variable life insurance policy is also called the
Accumulation Value.

The Accumulation Value equals the sum of the Fixed Account Value, the Separate
Account Value, and the Loan Account Value. At any point in time, the
Accumulation Value reflects:

1) Net Premium Payments made;

2) the amount of any Partial Surrenders;

3) any increases or decreases as a result of market performance of the
Sub-Accounts;

4) interest credited to the Fixed Account or the Loan Account;

5) persistency bonuses on Net Accumulation Value in Fixed Account and the
Sub-Accounts beginning in Policy Year 21; and

6) all charges and fees deducted.

The Separate Account Value, if any, is the portion of the Accumulation Value
attributable to the Separate Account. The value is equal to the sum of the
current values of all the Sub-Accounts in which you have invested. This is also
referred to as the variable Accumulation Value.

A unit of measure used in the calculation of the value of each Sub-Account is
the "Variable Accumulation Unit". It may increase or decrease from one
Valuation Period to the next. The Variable Accumulation Unit value for a Sub-
Account for a Valuation Period is determined as follows:

1) the total value of fund shares held in the Sub-Account is calculated by
multiplying the number of fund shares owned by the Sub-Account at the
beginning of the Valuation Period by the net asset value per share of the
fund at the end of the Valuation Period, and adding any dividend or other
distribution of the fund made during the Valuation Period; minus

2) the liabilities of the Sub-Account at the end of the Valuation Period. Such
liabilities include daily charges imposed on the Sub-Account, and may
include a charge or credit with respect to any taxes paid or reserved for
by Lincoln Life that we determine result from the operations of the
Separate Account; and

3) the result of (1) minus (2) is divided by the number of Variable
Accumulation Units for that Sub-Account outstanding at the beginning of the
Valuation Period.

In certain circumstances, and when permitted by law, we may use a different
standard industry method for this calculation, called the Net Investment Factor
method. We will achieve substantially the same result using either method.

The daily charge imposed on a Sub-Account for any Valuation Period is equal to
the daily mortality and expense risk charge multiplied by the number of
calendar days in the Valuation Period.

The Fixed Account Value, if any, reflects amounts allocated or transferred to
the Fixed Account, plus interest credited, and less any deductions or Partial
Surrenders. We guarantee the Fixed Account Value. Interest is credited

46
<PAGE>

daily on the Fixed Account Value at the greater of a rate of 0.00272616%
(equivalent to a compounded annual rate of 1.0%) or a higher rate determined by
the Company.

The Loan Account Value, if any, reflects any outstanding Policy Loans,
including any interest charged on the loans. This amount is held in the
Company's General Account. We do not guarantee the Loan Account Value. Interest
is credited on the Loan Account at an effective annual rate of 3.0% in all
years.

The Net Accumulation Value is the Accumulation Value less the Loan Account
Value. It represents the net value of your Policy and is the basis for
calculating the Surrender Value.

We will tell you at least annually the Accumulation Value, the number of
accumulation units credited to your Policy, current accumulation unit values,
Sub-Account values, the Fixed Account Value and the Loan Account Value. We
strongly suggest that you review your statements to determine whether
additional Premium Payments may be necessary to avoid lapse of your Policy.

Persistency Bonus

On each Monthly Anniversary Day beginning with the first Monthly Anniversary
Day in Policy Year 21, we will credit a persistency bonus to Net Accumulation
Values in each Sub-Account and the Fixed Account at an annual rate guaranteed
to be not less than 0.15% of the values in each Sub-Account and the Fixed
Account on the Monthly Anniversary Day. In the event that you have allocated
Premiums Payments to the Premium Reserve Rider, beginning with the first
Monthly Anniversary Day in Policy Year 21, a persistency bonus, calculated as
described above, will be credited to the Premium Reserve Rider Net Accumulation
Value. The persistency bonus is based on reduced costs in later Policy Years
that we can pass on to policies that are still in force. Our payment of the
persistency bonus will not increase or otherwise affect the charges and
expenses of your Policy or any policy riders.

DEATH BENEFITS
The "Death Benefit Proceeds" is the amount payable to the Beneficiary upon the
death of the insured, based upon the death benefit option in effect. Loans,
loan interest, Partial Surrenders, and overdue charges (such as Monthly
Deductions), if any, are deducted from the Death Benefit Proceeds prior to
payment. Riders, including the No-Lapse Enhancement Rider and the Premium
Reserve Rider, may impact the amount payable as Death Benefit Proceeds in your
Policy. The Guaranteed Minimum Death Benefit that you select under the
provisions of the No-Lapse Enhancement Rider will only affect the Death Benefit
Proceeds while the rider's No-Lapse Provision is actively preventing the Policy
from lapsing. As discussed in more detail in the "Riders" section of this
prospectus, the No-Lapse Enhancement Rider may provide a death benefit which
differs from that paid under the Policy. The Premium Reserve Rider
Accumulation Value, if any, less any Indebtedness under the Premium Reserve
Rider, will be added to the policy's Death Benefit Proceeds. If the policy's
death benefit is paid pursuant to the terms of the No-Lapse Enhancement Rider,
the Premium Reserve Rider Accumulation Value, if any, less any Indebtedness
under the Premium Reserve Rider, will be added to the death benefit payable
under the terms of that rider.

Death Benefit Proceeds

The Death Benefit Proceeds payable upon the death of the insured will be the
greater of:

1) the amount determined by the death benefit option in effect on the date of
the death of the insured, less any Indebtedness; or

2) an amount equal to the Accumulation Value on the date of death multiplied by
the applicable percentage shown in the Corridor Percentages Table in the
policy specifications, less any Indebtedness.

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<PAGE>

Death Benefit Options

Two different death benefit options are available. You may choose the death
benefit option at the time you apply for your Policy. If you do not choose a
death benefit option at that time, Death Benefit Option 1 will apply. You may
only elect Death Benefit Option 2 at the time you apply for your Policy. (See
discussion under heading "Changes to the Initial Specified Amount and Death
Benefit Options" for details as to changes you are permitted to make in your
choice of death benefit option after your Policy has been issued.)

The following table provides more information about the death benefit options.

<TABLE>
<CAPTION>
Option Death Benefit Proceeds Equal to the Variability
<S> <C> <C>
1 Specified Amount (a minimum of $100,000) level death benefit on None; level death benefit.
the date of the insured's death, less any Partial Surrenders after the
date of death.
2 Sum of the Specified Amount plus the Net Accumulation Value as of May increase or decrease over
the date of the insured's death, less any Partial Surrenders after the time, depending on the amount
date of death. of Premium paid and the
investment performance of the
Sub-Accounts or the interest
credited to the Fixed Account.
</TABLE>

If for any reason the Owner does not elect a particular death benefit option,
Option 1 will apply.

Your choice of death benefit option will impact the Cost of Insurance Charge
because the Cost of Insurance Charge is based upon the "Net Amount at Risk".
The Net Amount at Risk for your Policy is the difference between the Specified
Amount and the Accumulation Value of your Policy. Therefore, for example, if
you choose Death Benefit Option 1, and if your Policy Accumulation Value
increases (because of positive investment results), your Cost of Insurance
Charge will be less than if your Policy Accumulation Value did not increase or
declined. (See section headed "Cost of Insurance" for discussion of Cost of
Insurance Charges.)

The death benefit payable under any of the death benefit options will also be
reduced by the amount necessary to repay the Indebtedness in full and, if the
Policy is within the Grace Period, any payment required to keep the Policy in
force. Policy Indebtedness includes loans under the Policy and Premium Reserve
Rider Indebtedness includes loans under the Premium Reserve Rider.

Partial Surrenders may also reduce the death benefit payable under any of the
death benefit options (See section headed "Policy Surrenders - Partial
Surrender" for details as to the impact a Partial Surrender will have on the
death benefit payable under each option.)

Changes to the Initial Specified Amount and Death Benefit Options

Within certain limits, you may decrease (reduce) or, with satisfactory evidence
of insurability, increase the Specified Amount. The minimum Specified Amount is
currently $100,000.

A Partial Surrender may reduce the Specified Amount. If the Specified Amount is
reduced as a result of a Partial Surrender, the death benefit may also be
reduced. (See section headed "Policy Surrenders - Partial Surrender" for
details as to the impact a Partial Surrender may have on the Specified Amount.)

The death benefit option may be changed by the owner, subject to our consent,
as long as the Policy is in force.

You must submit all requests for changes among death benefit options and
changes in the Specified Amount in writing to our Administrative Office. The
minimum increase in Specified Amount currently permitted is $1,000. If you
request a change, a supplemental application and evidence of insurability must
also be submitted to us.

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<PAGE>

<TABLE>
<CAPTION>
Option Change Impact
<S> <C>
2 to 1 The Specified Amount will be increased by the Accumulation Value as of the effective date of
change.
</TABLE>

You may not change from Death Benefit Option 1 to Death Benefit Option 2. Death
Benefit Option 2 may only be elected at the time you apply for your Policy.

A Surrender Charge may apply to a decrease in Specified Amount. Please refer to
the Surrender Charges section of this prospectus for more information on
conditions that would cause a Surrender Charge to be applied. A table of
Surrender Charges is included in each policy.

Any Reduction in Specified Amount will be made against the Initial Specified
Amount and any later increase in the Specified Amount on a last in, first out
basis. Any increase in the Specified Amount will increase the amount of the
Surrender Charge applicable to your Policy. Changes in Specified Amount do not
affect the Premium Load as a percentage of Premium.

We may decline any request for Reduction in Specified Amount if, after the
change, the Specified Amount would be less than the minimum Specified Amount.
We may also decline such a request if it would reduce the Specified Amount
below the level required to maintain the Policy as life insurance for purposes
of federal income tax law according to the death benefit qualification test you
elected at the time you applied for the Policy.

Also, because the death benefit qualification tests, as discussed below,
require certain ratios between Premium and death benefit and between policy
Accumulation Value and death benefit, we may increase the policy's death
benefit above the Specified Amount in order to satisfy the test you elected. If
the increase in the policy's death benefit causes an increase in the Net Amount
at Risk, charges for the Cost of Insurance Charge will increase as well.

Any change is effective on the first Monthly Anniversary Day on, or after, the
date of approval of the request by Lincoln Life, provided that any increase in
cost is either included in a Premium Payment by you or the policy Accumulation
Value is sufficient to cover the increased Monthly Deduction. If the Monthly
Deduction amount would increase as a result of the change, the changes will be
effective on the first Monthly Anniversary Day on which the Accumulation Value
is equal to, or greater than, the Monthly Deduction amount.

Death Benefit Qualification Test

You will have the opportunity to choose between the two death benefit
qualification tests defined in Section 7702 of the Code, the "Cash Value
Accumulation Test" and the "Guideline Premium Test". If you do not choose a
death benefit qualification test at that time, you will be deemed to have
chosen the Guideline Premium Test. Once your Policy has been issued and is in
force, the death benefit qualification test cannot be changed.

The Guideline Premium Test calculates the maximum amount of Premium that may be
paid to provide the desired amount of insurance for an Insured of a particular
age. Because payment of a Premium amount in excess of this amount will
disqualify the Policy as life insurance, we will return to you any amount of
such excess. The test also applies a prescribed percentage factor, to determine
a minimum ratio of death benefit to Accumulation Value. A table of the
applicable percentage factors will be included as a part of the policy
specifications when you receive your Policy.

The Cash Value Accumulation Test requires that the death benefit be sufficient
to prevent the Accumulation Value from ever exceeding the "Net Single Premium"
required to fund the future benefits under the Policy. (The "Net Single
Premium" is calculated in accordance with Section 7702 of the Code and is based
on the Insured's age, risk classification and sex.) At any time the
Accumulation Value is greater than the Net Single Premium for the proposed
death benefit, the death benefit will be automatically increased by multiplying
the Accumulation Value by a percentage that is defined as $1,000 divided by the
Net Single Premium. A table of the applicable percentage factors will be
included as a part of the policy specifications when you receive your Policy.

The tests differ as follows:

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<PAGE>

(1) The Guideline Premium Test expressly limits the amount of Premium that you
can pay into your Policy while the Cash Value Accumulation Test does not.

(2) The factors that determine the minimum death benefit relative to the
Policy's Accumulation Value are different and required increases in the
minimum death benefit due to growth in Accumulation Value will generally
be greater under the Cash Value Accumulation Test.

(3) If you wish to pay more Premium than is permitted under the Guideline
Premium Test, for example to target a funding objective, you should
consider the Cash Value Accumulation Test, because it generally permits
the payment of higher amounts of Premium. Please note that payment of
higher Premiums could also cause your Policy to be deemed a MEC (see Tax
Issues, sub-section Policies That Are MEC's in your prospectus).

(4) If your primary objective is to maximize the potential for growth in
Accumulation Value, or to conserve Accumulation Value, generally the
Guideline Premium Test will better serve this objective.

(5) While application of either test may require an increase in death benefit,
any increase in the Cost of Insurance Charges that arises as a result of
the increase in the policy's Net Amount at Risk will generally be less
under the Guideline Premium Test than under the Cash Value Accumulation
Test. This is because the required adjustment to the death benefit under
the Guideline Premium Test is lower than that which would result under the
Cash Value Accumulation Test.

You should consult with a qualified tax advisor before choosing the death
benefits qualification test.

Please ask your financial advisor for illustrations which demonstrate the
impact of selection of each test on the particular policy, including any
riders, which you are considering.

Payment of Death Benefit Proceeds

Proof of death should be furnished to us at our Administrative Office as soon
as possible after the death of the insured. This notification must include a
certified copy of an official death certificate, a certified copy of a decree
of a court of competent jurisdiction as to the finding of death, or any other
proof satisfactory to us.

After receipt at our Administrative Office of proof of death of the insured,
the Death Benefit Proceeds will ordinarily be paid within seven days. The
proceeds will be paid in a lump sum or in accordance with any settlement option
selected by the Owner or the Beneficiary. Payment of the Death Benefit Proceeds
may be delayed if your Policy is contested or if Separate Account Values cannot
be determined.

POLICY SURRENDERS
You may surrender your Policy at any time by sending us your Policy along with
a written request for surrender. If you surrender your Policy, all policy
coverage will automatically terminate and may not be reinstated. Consult your
tax advisor to understand tax consequences of any surrender you are
considering.

The Surrender Value of your Policy is the amount you can receive by
surrendering the Policy. The Surrender Value is

(i) the Net Accumulation Value (which is your policy's Accumulation Value less
any Indebtedness) less any applicable Surrender Charge, less any accrued loan
interest not yet charged, plus

(ii) the Net Accumulation Value, if any, of the Premium Reserve Rider (which
is the Premium Reserve Rider Accumulation Value less any Indebtedness), and
less any accrued loan interest not yet charged, minus

(iii) any Surrender Charge not covered by the policy's Accumulation Value
(which is not deducted in (i) above).

Policy Indebtedness includes loans under the Policy and Premium Reserve Rider
Indebtedness includes loans under the Premium Reserve Rider.

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<PAGE>

Any surrender results in a withdrawal of values from the Sub-Accounts and Fixed
Account and from the Premium Reserve Rider Sub-Accounts and Premium Reserve
Rider Fixed Account that have values allocated to them. Any surrender from a
Sub-Account or from a Premium Reserve Rider Sub-Account will result in the
cancellation of Variable Accumulation Units. The cancellation of such units
will be based on the Variable Accumulation Unit Value determined at the close
of the Valuation Period during which the surrender is effective. Surrender
proceeds will generally be paid within seven days of our receipt of your
request.

At any time, you may transfer all of the Separate Account Value (and any
Premium Reserve Rider Sub-Account and Premium Reserve Rider Fixed Account
value) to the Fixed Account. You may then surrender the Policy in exchange for
a life insurance policy the values and benefits of which do not depend upon the
performance of a separate account. The new policy will not require the payment
of further Premiums, and the amount of the death benefit will be equal to what
can be purchased on a single Premium basis by the Surrender Value of the Policy
you are surrendering. Please contact your financial advisor for an illustration
of the policy which you could receive if you decide to exchange your policy.

Partial Surrender

You may make a Partial Surrender, withdrawing a portion of your policy values.
You must request a Partial Surrender in writing. The amount of any Partial
Surrender may not exceed 90% of the Policy's Surrender Value as of the date of
your request for a Partial Surrender. We may limit Partial Surrenders to the
extent necessary to meet the federal tax law requirements. Each Partial
Surrender must be at least $500. Partial Surrenders are subject to other
limitations as described below. If you wish to make a surrender in excess of
90% of the Surrender Value of your Policy, you must specifically request a Full
Surrender of your Policy. Charges for Full Surrenders will apply (see section
headed "Surrender Charges" for a discussion of Surrender Charges). Your
policy's Surrender Value equals the policy Accumulation Value less any
Indebtedness, less any applicable Surrender Charges. Policy Loans are
Indebtedness under your Policy and will reduce the Surrender Value available to
you.

Partial Surrenders will reduce the Accumulation Value and may reduce the
Specified Amount. The amount of the Partial Surrender will be withdrawn first
from the Premium Reserve Rider Sub-Accounts and Fixed Account in proportion to
their values, and when such values are reduced to zero then from the
Sub-Accounts and Fixed Account in proportion to their values. (See discussion
in section headed "Riders-Premium Reserve Rider" for further details.)

The effect of Partial Surrenders on your Policy depends on the death benefit
option in effect at the time of the Partial Surrender. If Death Benefit Option
1 has been elected, a Partial Surrender will reduce the specified amount as
shown in the table below. If Death Benefit Option 2 has been elected, a Partial
Surrender will reduce the Accumulation Value, but not the Specified Amount.

Partial Surrenders are deducted when the No-Lapse Value and the Reset Account
Value of the No-Lapse Enhancement Rider are calculated. (See discussion in
section headed "Riders - No-Lapse Enhancement Rider" for a detailed discussion
of how benefits of this rider may be impacted by reductions of these values.)

51
<PAGE>

<TABLE>
<CAPTION>
Death Benefit
Option in Effect Impact of Partial Surrender
<S> <C>
1 Will reduce the Accumulation Value and the Specified Amount will be reduced by the greater of:
a. zero; or
b. an amount equal to the amount of the Partial Surrender minus the result of [(1) minus (2)]
divided by (3) where:
(1) is an amount equal to the Accumulation Value on the Valuation Day immediately prior to the
Partial Surrender multiplied by the applicable percentage shown in the Corridor Percentages
Table in the policy specifications;
(2) is the Specified Amount immediately prior to the Partial Surrender; and
(3) is the applicable percentage shown in the Corridor Percentages Table in the policy
specifications.
2 Will reduce the Accumulation Value, but not the Specified Amount.
</TABLE>

Partial Surrender proceeds will generally be paid within seven days of our
receipt of your request.

POLICY LOANS
You may borrow against the Surrender Value of your Policy and the Premium
Reserve Rider, if you have allocated Premiums to the Premium Reserve Rider. The
loan may be for any amount up to 100% of the current Surrender Value. However,
we reserve the right to limit the amount of your loan so that total
Indebtedness under the Policy (including Premium Reserve Rider, if any, in
Policy Years 1-10) will not exceed 90% of an amount equal to the Accumulation
Value less Surrender Charge. A loan agreement must be executed and your Policy
assigned to us free of any other assignments. Outstanding Policy Loans and
accrued interest reduce the policy's death benefit and Accumulation Value.

The amount of your loan will be withdrawn first from Accumulation Values, if
any, of the Premium Reserve Rider Sub-Accounts and Fixed Account and then from
policy Sub-Accounts and Fixed Account in proportion to their values. The Loan
Account is the account in which policy Indebtedness (outstanding loans and
interest) accrues once it is transferred out of the Sub-Accounts and Fixed
Account. Amounts transferred to the Loan Account of both the Policy and the
Premium Reserve Rider do not participate in the performance of the Sub-Accounts
or the Fixed Account. Loans, therefore, can affect the policy's death benefit
and Accumulation Value whether or not they are repaid. Interest on policy loans
(from both the Premium Reserve Rider and the policy) accrues at an effective
annual rate of 4.0% in years 1-10 and 3.0% thereafter, and is payable once a
year in arrears on each policy anniversary, or earlier upon full surrender or
other payment of proceeds of your policy. Policy Values in the Loan Account
(Loan Collateral Account) are part of the Company's General Account.

The amount of your loan, plus any accrued but unpaid interest, is added to your
outstanding Policy Loan balance. Unless paid in advance, loan interest due will
be transferred proportionately from the Sub-Accounts and Fixed Account. This
amount will be treated as an additional Policy Loan, and added to the Loan
Account Value.

Lincoln Life credits interest to the loan account value (of both the Premium
Reserve Rider and the Policy) at a rate of 3.0% in all years, so the net cost
of your policy loan is 1.0% in years 1-10 and 0.0% thereafter.

Your outstanding loan balance may be repaid at any time during the lifetime of
the insured. The Loan Account will be reduced by the amount of any loan
repayment. Any repayment, other than loan interest, will be allocated to the
Sub-Accounts and Fixed Account in the same proportion in which Net Premium
Payments are currently allocated, unless you instruct otherwise. When making a
payment to us, we will apply your payment as Premiums and not loan repayments
unless you specifically instruct us otherwise.

If at any time the total Indebtedness against your Policy, including interest
accrued but not due, equals or exceeds the then current Accumulation Value less
Surrender Charges, the Policy will terminate subject to the conditions in the
Grace Period provision, unless the provisions of the No-Lapse Enhancement Rider
are preventing policy termination. If your Policy lapses while a loan is
outstanding, there may be adverse tax consequences.

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<PAGE>

The amount of a benefit paid (the "accelerated benefit") under the Basic
Accelerated Benefits Riders (see section headed "Riders - Basic Accelerated
Benefits Riders") is a lien against the Policy and is considered as a Policy
Loan. Therefore, an amount equal to the accelerated benefit paid will be
withdrawn first from Accumulation Values, if any, of the Premium Reserve Rider
sub-accounts and the Premium Reserve Rider fixed account and then from policy
Sub-Accounts and Fixed Account in proportion to their values. That amount is
transferred to the Loan Account. Interest will be credited by the Company as
described above. To the extent that the accelerated benefit paid does not
exceed the Surrender Value, interest will be charged in the same manner as
described above. However, to the extent that the accelerated benefit exceeds
the Surrender Value at the time it is paid, interest charged during each Policy
Year is determined annually at least 30 days in advance of the beginning of a
Policy Year and will not exceed the higher of (i) the published monthly average
of the Moody's Corporate Bond Yield Average - Monthly Average Corporates (as
published by Moody's Investors Service, Inc. for the calendar month ending 2
months before the beginning of the Policy Year), and (ii) the rate used to
compute the Accumulation Value of the Fixed Account plus 1.0%. Please ask your
financial advisor for additional details.

LAPSE AND REINSTATEMENT
If at any time:

1) the Net Accumulation Value of the Policy is insufficient to pay the Monthly
Deduction, and

2) the provisions of the No-Lapse Enhancement Rider are not preventing policy
termination, then all policy coverage will terminate. This is referred to
as Policy Lapse.

The Net Accumulation Value may be insufficient:

1) because it has been exhausted by earlier deductions;

2) as a result of poor investment performance;

3) due to Partial Surrenders;

4) due to Indebtedness for Policy Loans; or

5) because of a combination of any of these factors.

If we have not received your Premium Payment (or payment of Indebtedness on
Policy Loans) necessary so that the Net Accumulation Value of your Policy is
sufficient to pay the Monthly Deduction amount on a Monthly Anniversary Day, we
will send a written notice to you, or any assignee of record. The notice will
state the amount of the Premium Payment (or payment of Indebtedness on Policy
Loans) that must be paid to avoid termination of your Policy.

If the amount stated in the notice is not paid to us within the Grace Period
and any Premium Reserve Accumulation Value (less any Premium Reserve Rider
transfer load) automatically transferred at the end of the Grace Period is also
insufficient to keep the Policy in force, then the Policy will terminate. The
Grace Period is the later of (a) 31 days after the notice was mailed, and (b)
61 days after the Monthly Anniversary Day on which the Monthly Deduction could
not be paid. If the insured dies during the Grace Period, we will deduct any
charges due to us from any death benefit that may be payable under the terms of
the Policy.

No-Lapse Protection

Your Policy includes the No-Lapse Enhancement Rider. This rider provides you
with additional protection to prevent a lapse in your Policy. If you meet the
requirements of this rider, your Policy will not lapse, even if the Net
Accumulation Value under the Policy is insufficient to cover the accumulated,
if any, and current Monthly Deductions. It is a limited benefit in that it does
not provide any additional death benefit amount or any increase in your cash
value. Also, it does not provide any type of market performance guarantee.

We will automatically issue this rider with your Policy. There is no charge for
this rider.

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<PAGE>

The rider consists of the No-Lapse Value Provision and the Reset Account Value
Provision. Under this rider, your Policy will not lapse as long as either the
No-Lapse Value or the Reset Account Value, less any Indebtedness, is greater
than zero. The No-Lapse Value and Reset Account Value are reference values
only. If the Net Accumulation Value is insufficient to cover the accumulated,
if any, and current Monthly Deductions, the No-Lapse Value and Reset Account
Value will be referenced to determine whether either provision of the rider
will prevent your Policy from lapsing. Refer to the "No-Lapse Enhancement
Rider" section of this prospectus for more information.

Your Policy may also include the Overloan Protection Rider. If this rider is
issued with your Policy, you meet the requirements as described in this rider
and have elected this benefit, your Policy will not lapse solely based on
Indebtedness exceeding the Accumulation Value less the Surrender Charges. It is
a limited benefit, in that it does not provide any additional death benefit or
any increase in Accumulation Value. Also, it does not provide any type of
market performance guarantee. There is no charge for adding this rider to your
Policy. However, if you choose to elect the benefit provided by the rider,
there is a one-time charge which will not exceed 5.0% of the then current
Accumulation Value. Once you elect the benefit, certain provisions of your
Policy will be impacted as described in the rider.

Finally, your Policy includes the Premium Reserve Rider (in states where
available). To the extent you have allocated Premium Payments to this rider,
any rider Accumulation value may prevent lapse of your Policy. If your policy's
Net Accumulation Value is insufficient to cover the Monthly Deductions, and the
provisions of the No-Lapse Enhancement Rider are not preventing policy
termination, we will send a written notice to you which will state the amount
of the Premium Payment (or payment of Indebtedness on Policy Loans) that must
be paid to avoid termination of your Policy. If the amount in the notice is not
paid to us within the Grace Period, we will automatically transfer to your
Policy any Premium Reserve Rider Accumulation value (less any Premium Reserve
Rider transfer load) on the day the Grace Period ends. If after such transfer,
your policy's Net Accumulation Value is sufficient to cover the Monthly
Deductions then due, your Policy will not lapse. As with your Policy, you bear
the risk that investment results of the Sub-Accounts you have chosen are
adverse or are less favorable than anticipated. Adverse investment results will
impact the Accumulation Value of the rider and, therefore, the amount of the
rider Accumulation Value which may be available to prevent your Policy from
lapsing or for providing policy benefits.

Reinstatement of a Lapsed Policy

If your Policy has lapsed and the insured has not died since lapse, you may
reinstate your Policy within five years of the Policy Lapse date, provided:

1) it has not been surrendered;

2) there is an application for reinstatement in writing;

3) satisfactory evidence of insurability is furnished to us and we agree to
accept the risk for the insured;

4) we receive a payment sufficient to keep your Policy in force for at least
two months; and

5) any accrued loan interest is paid and any remaining Indebtedness is either
paid or reinstated.

The reinstated policy will be effective as of the Monthly Anniversary Day on or
next following the date on which we approve your application for reinstatement.
Surrender Charges will be reinstated as of the Policy Year in which your Policy
lapsed. Your Accumulation Value at reinstatement will be the Net Premium
Payment then made less all Monthly Deductions due. If a Policy Loan is being
reinstated, the Policy's Accumulation Value at reinstatement will be the
Accumulation Value on the date the Policy Lapsed plus the Net Premium Payment
made less all Monthly Deductions due.

TAX ISSUES
The federal income tax treatment of your Policy is complex and sometimes
uncertain. The federal income tax rules may vary with your particular
circumstances. This discussion does not include all the federal income tax
rules that may affect you and your Policy and is not intended as tax advice.
This discussion also does not address other

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federal tax consequences, such as estate, gift and generation-skipping transfer
taxes, or any state and local income, estate and inheritance tax consequences,
associated with the Policy. You should always consult a tax advisor about the
application of tax rules to your individual situation.

Taxation of Life Insurance Contracts in General

Tax Status of the Policy. Section 7702 of the Internal Revenue Code ("Code")
establishes a statutory definition of life insurance for federal tax purposes.
We believe that the policy will meet the statutory definition of life insurance
under the Guideline Premium Test, which provides for a maximum amount of
premium paid depending upon the insured's age, gender, and risk classification
in relation to the death benefit and a minimum amount of death benefit in
relation to policy value. As a result, the death benefit payable will generally
be excludable from the Beneficiary's gross income, and interest and other
income credited will not be taxable unless certain withdrawals are made (or are
deemed to be made) from the Policy prior to the death of the insured, as
discussed below. This tax treatment will only apply, however, if (1) the
investments of the Separate Account are "adequately diversified" in accordance
with Treasury Department regulations, and (2) we, rather than you, are
considered the Owner of the assets of the Separate Account for federal income
tax purposes.

The Code also recognizes a Cash Value Accumulation Test, which does not limit
premiums paid, but requires the policy to maintain a minimum ratio between the
death benefit and the policy's Accumulation Value, depending on the insured's
age, gender, and risk classification. We will only apply this test to the
policy if you have advised us to do so at the time you applied for the policy.

Investments in the Separate Account Must be Diversified. For a policy to be
treated as a life insurance contract for federal income tax purposes, the
investments of the Separate Account must be "adequately diversified." IRS
regulations define standards for determining whether the investments of the
Separate Account are adequately diversified. If the Separate Account fails to
comply with these diversification standards, you could be required to pay tax
currently on the excess of the policy value over the policy Premium Payments.
Although we do not control the investments of the Sub-Accounts, we expect that
the Sub-Accounts will comply with the IRS regulations so that the Separate
Account will be considered "adequately diversified."

Restriction on Investment Options. Federal income tax law limits your right to
choose particular investments for the Policy. Because the IRS has issued little
guidance specifying those limits, the limits are uncertain and your right to
allocate policy values among the Sub-Accounts may exceed those limits. If so,
you would be treated as the Owner of the assets of the Separate Account and
thus subject to current taxation on the income and gains from those assets. We
do not know what limits may be set by the IRS in any guidance that it may issue
and whether any such limits will apply to existing policies. We reserve the
right to modify the Policy without your consent to try to prevent the tax law
from considering you as the Owner of the assets of the Separate Account.

No Guarantees Regarding Tax Treatment. We make no guarantee regarding the tax
treatment of any policy or of any transaction involving a policy. However, the
remainder of this discussion assumes that your Policy will be treated as a life
insurance contract for federal income tax purposes and that the tax law will
not impose tax on any increase in your Policy value until there is a
distribution from your Policy.

Tax Treatment of Life Insurance Death Benefit Proceeds. In general, the amount
of the death benefit payable from a policy because of the death of the insured
is excludable from gross income. Certain transfers of the Policy for valuable
consideration, however, may result in a portion of the death benefit being
taxable. If the death benefit is not received in a lump sum and is, instead,
applied to one of the settlement options, payments generally will be prorated
between amounts attributable to the death benefit, which will be excludable
from the Beneficiary's income, and amounts attributable to interest (accruing
after the insured's death) which will be includible in the Beneficiary's
income.

Tax Deferral During Accumulation Period. Under existing provisions of the Code,
except as described below, any increase in your policy value is generally not
taxable to you unless amounts are received (or are deemed to be received) from
the Policy prior to the insured's death. If there is a total withdrawal from
the Policy, the Surrender Value will be includible in your income to the extent
the amount received exceeds the "investment in the contract."

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(If there is any debt at the time of a total withdrawal, such debt will be
treated as an amount received by the Owner.) The "investment in the contract"
generally is the aggregate amount of Premium Payments and other consideration
paid for the Policy, less the aggregate amount received previously to the
extent such amounts received were excludable from gross income. Whether partial
withdrawals (or other amounts deemed to be distributed) from the Policy
constitute income to you depends, in part, upon whether the Policy is
considered a "Modified Endowment Contract" (a "MEC") for federal income tax
purposes.

Policies That Are MECs

Characterization of a Policy as a MEC. A Modified Endowment Contract ("MEC") is
a life insurance policy that meets the requirements of Section 7702 and fails
the "7-pay test" of 7702A of the Code. A policy will be classified as a MEC if
Premiums are paid more rapidly than allowed by the "7-pay test," a test that
compares actual paid Premium in the first seven years against a pre-determined
Premium amount as defined in 7702A of the Code. A policy may also be classified
as a MEC if it is received in exchange for another policy that is a MEC. In
addition, even if the Policy initially is not a MEC, it may in certain
circumstances become a MEC. The circumstances under which a Policy may become a
MEC include a material change to the policy (within the meaning of tax law), a
Policy Lapse and reinstatement more than 90 days following the lapse, or a
withdrawal or a reduction in the death benefit during the first seven Policy
Years.

Tax Treatment of Withdrawals, Loans, Assignments and Pledges under MECs. If the
Policy is a MEC, withdrawals from your Policy will be treated first as
withdrawals of income and then as a recovery of Premium Payments. Thus,
withdrawals will be includible in income to the extent the policy value exceeds
the investment in the Policy. The Code treats any amount received as a loan
under a policy, and any assignment or pledge (or agreement to assign or pledge)
of any portion of your policy value, as a withdrawal of such amount or portion.
Your investment in the Policy is increased by the amount includible in income
with respect to such assignment, pledge, or loan.

Penalty Taxes Payable on Withdrawals. A 10% penalty tax may be imposed on any
withdrawal (or any deemed distribution) from your MEC which you must include in
your gross income. The 10% penalty tax does not apply if one of several
exceptions exists. These exceptions include withdrawals or surrenders that: you
receive on or after you reach age 59 1/2, you receive because you became
disabled (as defined in the tax law), or you receive as a series of
substantially equal periodic payments for your life (or life expectancy). None
of the penalty tax exceptions apply to a taxpayer who is not an individual.

Special Rules if You Own More than One MEC. In certain circumstances, you must
combine some or all of the life insurance contracts which are MECs that you own
in order to determine the amount of withdrawal (including a deemed withdrawal)
that you must include in income. For example, if you purchase two or more MECs
from the same life insurance company (or its affiliates) during any calendar
year, the Code treats all such policies as one contract. Treating two or more
policies as one contract could affect the amount of a withdrawal (or a deemed
withdrawal) that you must include in income and the amount that might be
subject to the 10% penalty tax described above.

Policies That Are Not MECs

Tax Treatment of Withdrawals. If the Policy is not a MEC, the amount of any
withdrawal from the Policy will generally be treated first as a non-taxable
recovery of Premium Payments and then as income from the Policy. Thus, a
withdrawal from a policy that is not a MEC will not be includible in income
except to the extent it exceeds the investment in the Policy immediately before
the withdrawal.

Certain Distributions Required by the Tax Law in the First 15 Policy
Years. Section 7702 places limitations on the amount of Premium Payments that
may be made and the policy values that can accumulate relative to the death
benefit. Where cash distributions are required under Section 7702 in connection
with a reduction in benefits during the first 15 years after the Policy is
issued (or if withdrawals are made in anticipation of a reduction in benefits,

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within the meaning of the tax law, during this period), some or all of such
amounts may be includible in income. A reduction in benefits may occur when the
face amount is decreased, withdrawals are made, and in certain other instances.

Tax Treatment of Loans. If your Policy is not a MEC, a loan you receive under
the Policy is generally treated as your Indebtedness. As a result, no part of
any loan under such a policy constitutes income to you so long as the Policy
remains in force. Nevertheless, in those situations where the interest rate
credited to the Loan Account equals the interest rate charged to you for the
loan, it is possible that some or all of the loan proceeds may be includible in
your income. If a policy lapses (or if all policy value is withdrawn or
exchanged to a new policy in a tax-free policy exchange) when a loan is
outstanding, the amount of the loan outstanding will be treated as withdrawal
proceeds for purposes of determining whether any amounts are includible in your
income. Before purchasing a policy that includes the Overloan Protection Rider,
you should note that if you elect to exercise the Overloan Protection Rider at
any time during the policy's life, such exercise could be deemed to result in a
taxable distribution of the outstanding loan balance. You should consult a tax
advisor prior to exercising the Overloan Protection Rider to determine the tax
consequences of such exercise.

Other Considerations

Insured Lives Past Age 121. If the insured survives beyond the end of the
mortality table, which is used to measure charges for the Policy and which ends
at age 121, and an option 1 death benefit is in effect, in some circumstances
the policy value may equal or exceed the Specified Amount level death benefit.
Thus, the policy value may equal the Death Benefit Proceeds. In such a case, we
believe your Policy will continue to qualify as life insurance for federal tax
purposes. However, there is some uncertainty regarding this treatment, and it
is possible that you would be viewed as constructively receiving the
Accumulation Value in the year the insured attains age 121.

Compliance with the Tax Law. We believe that the maximum amount of Premium
Payments we have determined for the policies will comply with the federal tax
definition of life insurance. We will monitor the amount of Premium Payments.

If at any time you pay a Premium that would exceed the amount allowable to
permit the Policy to continue to qualify as life insurance, we will either
refund the excess Premium to you within 60 days of the end of the Policy Year
or, if the excess Premium exceeds $250, offer you the alternative of
instructing us to hold the excess Premium in a Premium deposit fund and apply
it to the Policy later in accordance with your instructions. We will credit
interest at an annual rate that we may declare from time to time on advance
Premium deposit funds.

The Policy will be allowed to become a MEC under the Code only with your
consent. If you pay a Premium that would cause your Policy to become a MEC and
you do not consent to MEC status for your Policy, we will either refund the
excess Premium to you within 60 days of the end of the Policy Year, offer you
the opportunity to apply for an increase in Death Benefit. If the excess
Premium exceeds $250, we will offer you the additional alternative of
instructing us to hold the excess in a Premium deposit fund and apply it to the
Policy on the next, succeeding Policy Anniversary when the Premium no longer
causes your Policy to be deemed a MEC in accordance with your Premium
allocation instructions on file at the time the Premium is applied.

Any interest and other earnings on funds in a Premium deposit fund will be
includible in income subject to tax as required by law.

Disallowance of Interest Deductions. Interest on Policy Loan Indebtedness is
not deductible.

If an entity (such as a corporation or a trust, not an individual) purchases a
policy or is the Beneficiary of a policy issued after June 8, 1997, a portion
of the interest on Indebtedness unrelated to the policy may not be deductible
by the entity. However, this rule does not apply to a policy owned by an entity
engaged in a trade or business which covers the life of one individual who is
either (i) a 20% Owner of the entity, or (ii) an officer, director, or employee
of the trade or business, at the time first covered by the policy. This rule
also does not apply to a policy owned by an entity engaged in a trade or
business which covers the joint lives of the 20% Owner of the entity and the
Owner's spouse at the time first covered by the policy.

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Employer-Owned Contracts. In the case of an "employer-owned life insurance
contract" as defined in the tax law that is issued (or deemed to be issued)
after August 17, 2006, the portion of the death benefit excludable from gross
income generally will be limited to the Premiums paid for the contract.
However, this limitation on the death benefit exclusion will not apply if
certain notice and consent requirements are satisfied and one of several
exceptions is satisfied. These exceptions include circumstances in which the
death benefit is payable to certain heirs of the insured to acquire an
ownership interest in a business, or where the contract covers the life of a
director or an insured who is "highly compensated" within the meaning of the
tax law. These rules, including the definition of an employer-owned life
insurance contract, are complex, and you should consult with your advisors for
guidance as to their application.

Federal Income Tax Withholding. We will withhold and remit to the IRS a part of
the taxable portion of each distribution made under a policy unless you notify
us in writing at or before the time of the distribution that tax is not to be
withheld. Regardless of whether you request that no taxes be withheld or
whether the Company withholds a sufficient amount of taxes, you will be
responsible for the payment of any taxes and early distribution penalties that
may be due on the amounts received. You may also be required to pay penalties
under the estimated tax rules, if your withholding and estimated tax payments
are insufficient to satisfy your total tax liability.

Changes in the Policy or Changes in the Law. Changing the Owner, exchanging the
Policy, and other changes under the Policy may have tax consequences (in
addition to those discussed herein) depending on the circumstances of such
change. The above discussion is based on the Code, IRS regulations, and
interpretations existing on the date of this prospectus. However, Congress, the
IRS, and the courts may modify these authorities, sometimes retroactively.

Fair Market Value of Your Policy

It is sometimes necessary for tax and other reasons to determine the "value" of
your Policy. The value can be measured differently for different purposes. It
is not necessarily the same as the Accumulation Value or the Net Accumulation
Value. You, as the Owner, should consult with your advisors for guidance as to
the appropriate methodology for determining the fair market value of the
Policy.

Tax Status of Lincoln Life

Under existing federal income tax laws, the Company does not pay tax on
investment income and realized capital gains of the Separate Account. However,
the Company does expect, to the extent permitted under Federal tax law, to
claim the benefit of the foreign tax credit as the Owner of the assets of the
Separate Account. Lincoln Life does not expect that it will incur any federal
income tax liability on the income and gains earned by the Separate Account.
We, therefore, do not impose a charge for federal income taxes. If federal
income tax law changes and we must pay tax on some or all of the income and
gains earned by the Separate Account, we may impose a charge against the
Separate Account to pay the taxes.

RESTRICTIONS ON FINANCIAL TRANSACTIONS
In accordance with money laundering laws and federal economic sanction policy,
the Company may be required in a given instance to reject a Premium Payment
and/or freeze an Owner's account. This means we could refuse to honor requests
for transfers, withdrawals, surrenders, loans, assignments, Beneficiary changes
or death benefit payments. Once frozen, monies would be moved from the Separate
Account to a segregated interest-bearing account maintained for the Owner, and
held in that account until instructions are received from the appropriate
regulator. We also may be required to provide additional information about an
Owner's account to government regulators.

Also, we may postpone payment whenever: (a) the New York Stock Exchange is
closed, (b) trading on the New York Stock Exchange is restricted, (c) an
emergency exists as a result of which disposal of securities held in the
Variable Account is not reasonably practicable or is not reasonably practicable
to determine the value of the Variable

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Account's net assets (d) if, pursuant to SEC rules, an underlying money market
fund suspends payment of redemption proceeds in connection with a liquidation
of the fund, we may delay payment of any transfer, partial withdrawal,
surrender, or death benefit from a money market sub-account until the fund is
liquidated, or (e) during any other period when the SEC, by order, so permits
for the protection of the Owner.

LEGAL PROCEEDINGS
In the ordinary course of its business and otherwise, the Company and its
subsidiaries or its separate accounts and Principal Underwriter may become or
are involved in various pending or threatened legal proceedings, including
purported class actions, arising from the conduct of its business. In some
instances, the proceedings include claims for unspecified or substantial
punitive damages and similar types of relief in addition to amounts for alleged
contractual liability or requests for equitable relief.

After consultation with legal counsel and a review of available facts, it is
management's opinion that the proceedings, after consideration of any reserves
and rights to indemnification, ultimately will be resolved without materially
affecting the consolidated financial position of the Company and its
subsidiaries, or the financial position of its separate accounts or Principal
Underwriter. However, given the large and indeterminate amounts sought in
certain of these proceedings and the inherent difficulty in predicting the
outcome of such legal proceedings, it is possible that an adverse outcome in
certain matters could be material to the Company's operating results for any
particular reporting period.

FINANCIAL STATEMENTS
The December 31, 2011 financial statements of the Separate Account and the
December 31, 2011 consolidated financial statements of the Company are located
in the SAI.

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CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

Additional information about Lincoln Life, the Separate Account and your Policy
may be found in the Statement of Additional Information (SAI).

Contents of the SAI

<TABLE>
<S> <C>
GENERAL INFORMATION
Lincoln Life
Capital Markets
Registration Statement
Changes of Investment Policy
Principal Underwriter
Disaster Plan
Advertising & Ratings
SERVICES
Independent Registered Public Accounting
Firm
Accounting Services
Checkbook Service for Disbursements

</TABLE>
<TABLE>
<S> <C>
POLICY INFORMATION
Corporate and Group Purchasers and Case
Exceptions
Assignment
Transfer of Ownership
Beneficiary
Right to Convert Contract
Change of Plan
Settlement Options
Deferment of Payments
Incontestability
Misstatement of Age or Sex
Suicide
Estate Tax Repeal Rider
PERFORMANCE DATA
FINANCIAL STATEMENTS
Separate Account
Company
</TABLE>

The SAI may be obtained, at no cost to you, by contacting our Administrative
Office at the address or telephone number listed on the first page of this
prospectus. Your SAI will be sent to you via first class mail within three
business days of your request. You may make inquiries about your policy to this
same address and telephone number.

You may request personalized illustrations of death benefits and policy values
from your financial advisor without charge.

You may review or copy this prospectus, the SAI, or obtain other information
about the Separate Account at the Securities and Exchange Commission's Public
Reference Room. You should contact the SEC at (202) 551-8090 to obtain
information regarding days and hours the reference room is open. You may also
view information at the SEC's Internet site, http://www.sec.gov. Copies of
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section, Securities and Exchange Commission, 100 F Street, NE,
Washington, D.C. 20549-0102.

This prospectus, the funds prospectus, and the SAI are also available on our
internet site, www.LincolnFinancial.com

Lincoln Life Flexible Premium Variable Life Account M
1933 Act Registration No. 333-181796
1940 Act Registration No. 811-08557

End of Prospectus

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GLOSSARY OF TERMS

7-pay test-A test that compares actual paid premium in the first seven years
against a pre-determined premium amount as defined in 7702A of the Code.

1933 Act-The Securities Act of 1933, as amended.

1940 Act-The Investment Company Act of 1940, as amended.

Accumulation Value-An amount equal to the sum of the Fixed Account Value, the
Separate Account Value, and the Loan Account Value.

Administrative Fee-The fee which compensates the Company for administrative
expenses associated with policy issue and ongoing policy maintenance including
premium billing and collection, policy value calculation, confirmations,
periodic reports and other similar matters.

Automatic Rebalancing-A program which periodically restores to a pre-determined
level the percentage of policy value allocated to the Fixed Account and each
Sub-Account.

Beneficiary-The person designated to receive the Death Benefit Proceeds.

Cash Value Accumulation Test-A provision of the Code that requires that the
death benefit be sufficient to prevent the Accumulation Value from ever
exceeding the net single premium required to fund the future benefits under the
policy.

Code-Internal Revenue Code of 1986, as amended.

Cost of Insurance Charge-This charge is the portion of the Monthly Deduction
designed to compensate the Company for the anticipated cost of paying death
benefits in excess of the policy value. It is determined by multiplying the
policy's Net Amount at Risk by the Cost of Insurance Rate.

Death Benefit Proceeds-The amount payable to the beneficiary upon the death of
the insured, based upon the death benefit option in effect. Loans, loan
interest, Partial Surrenders, and overdue charges, if any, are deducted from
the Death Benefit Proceeds prior to payment. Riders may impact the amount
payable as Death Benefit Proceeds in your policy.

Dollar Cost Averaging - An optional program which you select which
systematically transfers specified dollar amounts from the money market
Sub-Account or from the Fixed Account to one or more Sub-Accounts.

Fixed Account-An allocation option under the policy, which is a part of our
General Account, to which we credit a guaranteed minimum interest rate.

Fixed Account Value-An amount equal to the value of amounts allocated or
transferred to the Fixed Account, plus interest credited, and less any
deductions or Partial Surrenders.

Fund (Underlying Fund)-The mutual fund the shares of which are purchased for
all amounts you allocate or transfer to a Sub-Account.

Grace Period-The period during which you may make premium payments (or repay
indebtedness) to prevent policy lapse. That period is the later of (a) 31 days
after the notice was mailed, and (b) 61 days after the Monthly Anniversary Day
on which the policy enters the grace period.

Guideline Premium Test-A provision of the Code under which the maximum amount
of premium paid in relation to the death benefit and a minimum amount of death
benefit in relation to policy value is determined.

Indebtedness-The sum of all outstanding loans and accrued interest.

Lapse Notice-Written notice to you (or any assignee of record) that your policy
will terminate unless we receive payment of premiums (or payment of
Indebtedness on Policy Loans). The notice will state the amount of premium
payment (or payment of Indebtedness on Policy Loans) that must be paid to avoid
termination of your policy.

Loan Account-The account in which policy Indebtedness accrues once it is
transferred out of the Sub-Accounts and/or the Fixed Account.

Loan Account Value-An amount equal to any outstanding policy loans, including
any interest charged on the loans. This amount is held in the Company's General
Account.

M&E-Mortality and Expense Risk Charge.

Market Timing Procedures-Policies and procedures from time to time adopted by
us as an effort to protect our policy owners and the funds from potentially
harmful trading activity.

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Modified Endowment Contract (MEC)-A life insurance policy that meets the
requirements of Section 7702 and fails the "7-pay test" of 7702A of the Code.
If the policy is a MEC, withdrawals from your policy will be treated first as
withdrawals of income and then as a recovery of premium payments.

Monthly Anniversary Day-The Policy Date and the same day of each month
thereafter. If the day that would otherwise be a Monthly Anniversary Day is
non-existent for that month, or is not a Valuation Day, then the Monthly
Anniversary Day is the next Valuation Day. The Monthly Deductions are made on
the Monthly Anniversary Day.

Monthly Deduction-The amount of the monthly charges for the Cost of Insurance
Charge, the Administrative Fee, and charges for riders to your policy.

Net Accumulation Value-An amount equal to the Accumulation Value less the Loan
Account Value.

Net Amount at Risk-The death benefit minus the greater of zero or the
Accumulation Value. The Net Amount at Risk may vary with investment
performance, premium payment patterns, and charges.

Net Premium Payment-An amount equal to the premium payment, minus the Premium
Load.

Owner-The person or entity designated as owner in the policy specifications
unless a new owner is thereafter named, and we receive written notification of
such change.

Partial Surrender-A withdrawal of a portion of your policy values.

Planned Premium-The amount of periodic premium (as shown in the policy
specifications) you have chosen to pay the Company on a scheduled basis. This
is the amount for which we send a premium reminder notice.

Policy Anniversary-The same date (month and day) each Policy Year equal to the
Policy Date, or the next Valuation Day if the Policy Anniversary is not a
Valuation Day or is nonexistent for the year.

Policy Date - Date shown on the policy specification pages as the date on which
life insurance coverage begins if premium paid.

Policy Loan-The amount you have borrowed against the Surrender Value of your
policy.

Policy Loan Interest-The charge made by the Company to cover the cost of your
borrowing against your policy. Policy Loan Interest will be charged to the Loan
Account Value.

Policy Lapse-The day on which coverage under the policy ends as described in
the grace period.

Policy Month- The period from one Monthly Anniversary Day up to, but not
including, the next Monthly Anniversary Day.

Policy Specifications- The pages of this policy which show your benefits,
premium, costs, and other policy information.

Policy Year-Twelve month period(s) beginning on the Policy Date and extending
up to but not including the next Policy Anniversary.

Premium (Premium Payment)-The amount that you pay to us for your policy. You
may select and vary the frequency and the amount of premium payments. After the
initial premium payment is made there is no minimum premium required, except
premium payments to keep the policy in force.

Premium Load-A deduction from each Premium Payment which covers certain
policy-related state and federal tax liabilities as well as a portion of the
sales expenses incurred by the Company.

Reduction in Specified Amount-A decrease in the Specified Amount of your
policy.

Right to Examine Period-The period during which the policy may be returned to
us for cancellation.

SAI-Statement of Additional Information.
SEC-The Securities and Exchange Commission.

Separate Account Value (Variable Accumulation Value)-An amount equal to the
values in the Sub-Accounts.

Specified Amount (Initial Specified Amount)-The amount chosen by you which is
used to determine the amount of death benefit and the amount of rider benefits,
if any. The Specified Amount chosen at the time of issue is the "Initial
Specified Amount". The Specified Amount may be increased or decreased after
issue if allowed by and described in the policy.

Sub-Account(s)-Divisions of the Separate Account created by the Company to
which you may allocate your Net Premium Payments and among which you may
transfer Separate Account values.

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Surrender Charge-The charge we may make if you request a Full Surrender of your
policy or request a Reduction in Specified Amount. The Surrender Charge is in
part a deferred sales charge and in part a recovery of certain first year
administrative costs. A schedule of Surrender Charges is included in each
policy.

Surrender Value-An amount equal to the Net Accumulation Value less any
applicable Surrender Charge, less any accrued loan interest not yet charged.

Valuation Day-Each day on which the New York Stock Exchange is open and trading
is unrestricted.

Valuation Period-The time between Valuation Days.

Variable Accumulation Unit-A unit of measure used in the calculation of the
value of each Sub-Account.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

Dated August 15, 2012
Relating to Prospectus Dated August 15, 2012 for

Lincoln VULONE2012 product

Lincoln Life Flexible Premium Variable Life Account M, Registrant

The Lincoln National Life Insurance Company, Depositor

The SAI is not a prospectus. The SAI provides you with additional information
about Lincoln Life, the Separate Account and your policy. It should be read in
conjunction with the product prospectus.

A copy of the product prospectus may be obtained without charge by writing to
our Administrative Office:

Customer Service Center
One Granite Place
Concord, NH 03301

or by telephoning (800) 444-2363, and requesting a copy of the Lincoln
VULONE2012 product prospectus.

TABLE OF CONTENTS OF THE SAI

<TABLE>
<CAPTION>
Contents Page
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<S> <C>
GENERAL INFORMATION............................ 2
Lincoln Life............................... 2
Capital Markets............................ 2
Registration Statement..................... 2
Changes of Investment Policy............... 2
Principal Underwriter...................... 3
Disaster Plan.............................. 3
Advertising & Ratings...................... 3
SERVICES....................................... 4
Independent Registered Public Accounting
Firm..................................... 4
Accounting Services........................ 5
Checkbook Service for Disbursements........ 5
POLICY INFORMATION............................. 5
Corporate and Group Purchasers and Case
Exceptions............................... 5

</TABLE>
<TABLE>
<CAPTION>
Contents Page
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<S> <C>
Assignment................................. 5
Transfer of Ownership...................... 5
Beneficiary................................ 6
Right to Convert Contract.................. 6
Change of Plan............................. 6
Settlement Options......................... 6
Deferment of Payments...................... 6
Incontestability........................... 7
Misstatement of Age or Sex................. 7
Suicide.................................... 7
PERFORMANCE DATA............................... 7
FINANCIAL STATEMENTS........................... 8
Separate Account........................... M-1
Company.................................... S-1
</TABLE>

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GENERAL INFORMATION

Lincoln Life
The Lincoln National Life Insurance Company ("Lincoln Life", "the Company",
"we", "us", "our") (EIN 35-0472300), organized in 1905, is an Indiana-domiciled
insurance company, engaged primarily in the direct issuance of life insurance
policies and annuities. Lincoln Life is wholly owned by Lincoln National
Corporation (LNC), a publicly held insurance and financial services holding
company incorporated in Indiana. Lincoln Life is obligated to pay all amounts
promised to policy owners under the policies. Death benefit proceeds and rider
benefits, to the extent those proceeds and benefits exceed the then current
Accumulation Value of your policy, are backed by the claims-paying ability of
Lincoln Life.

Lincoln Life is subject to the laws of Indiana governing insurance companies
and to regulation by the Indiana Department of Insurance ("Insurance
Department"). An annual statement in a prescribed form is filed with the
Insurance Department each year covering the operation of the Company for the
preceding year along with the Company's financial condition as of the end of
that year. Regulation by the Insurance Department includes periodic examination
to determine our contract liabilities and reserves. Our books and accounts are
subject to review by the Insurance Department at all times and a full
examination of our operations is conducted periodically by the Insurance
Department. Among the laws and regulations applicable to us as an insurance
company are those which regulate the investments we can make with assets held
in our General Account. In general, those laws and regulations determine the
amount and type of investments which we can make with General Account assets.
Such regulation does not, however, involve any supervision of management
practices or policies, or our investment practices or policies.

A blanket bond with a per event limit of $50 million and an annual policy
aggregate limit of $100 million covers all of the officers and employees of the
Company.

Capital Markets

In any particular year, our capital may increase or decrease depending on a
variety of factors - the amount of our statutory income or losses (which is
sensitive to equity market and credit market conditions), the amount of
additional capital we must hold to support business growth, changes in
reserving requirements, our inability to secure capital market solutions to
provide reserve relief, such as issuing letters of credit to support captive
reinsurance structures, changes in equity market levels, the value of certain
fixed-income and equity securities in our investment portfolio and changes in
interest rates.

Registration Statement

A Registration Statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to the
policies offered. The Registration Statement, its amendments and exhibits,
contain information beyond that found in the prospectus and the SAI. Statements
contained in the prospectus and the SAI as to the content of policies and other
legal instruments are summaries.

Changes of Investment Policy

We may change the investment policy of the Separate Account at any time. If
required by the Insurance Commissioner, we will file any such change for
approval with the Department of Insurance in our state of domicile, and in any
other state or jurisdiction where this policy is issued.

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<PAGE>

If an Owner objects, his or her policy may be converted to a substantially
comparable fixed benefit life insurance policy offered by us on the life of the
insured. The Owner has the later of 60 days (6 months in Pennsylvania) from the
date of the investment policy change or 60 days (6 months in Pennsylvania) from
being informed of such change to make this conversion. We will not require
evidence of insurability for this conversion.The new policy will not be
affected by the investment experience of any separate account. The new policy
will be for an amount of insurance equal to or lower than the amount of the
death benefit of the current policy on the date of the conversion.

Principal Underwriter

Lincoln Financial Distributors, Inc. ("LFD"), 130 North Radnor Chester Road,
Radnor, PA 19087, is the principal underwriter for the policies, which are
offered continuously. LFD is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 as a broker-dealer and is
a member of the Financial Industry Regulatory Authority ("FINRA"). The
principal underwriter has overall responsibility for establishing a selling
plan for the policies. LFD received $48,112,422 in 2011, $40,781,691 in 2010
and $31,325,797 in 2009 for the sale of policies offered through the Separate
Account. LFD retains no underwriting commissions from the sale of the policies.

Disaster Plan

Lincoln's business continuity and disaster recovery strategy employs system and
telecommunication accessibility, system back-up and recovery, and employee
safety and communication. The plan includes documented and tested procedures
that will assist in ensuring the availability of critical resources and in
maintaining continuity of operations during an emergency situation.

Advertising & Ratings

We may include in certain advertisements, endorsements in the form of a list of
organizations, individuals or other parties which recommend Lincoln Life or the
policies. Furthermore, we may occasionally include in advertisements
comparisons of currently taxable and tax deferred investment programs, based on
selected tax brackets, or discussions of alternative investment vehicles and
general economic conditions.

Our financial strength is ranked and rated by nationally recognized independent
rating agencies. The ratings do not imply approval of the product and do not
refer to the performance of the product, or any separate account, including the
underlying investment options. Ratings are not recommendations to buy our
products. Each of the rating agencies reviews its ratings periodically.
Accordingly, all ratings are subject to revision or withdrawal at any time by
the rating agencies, and therefore, no assurance can be given that these
ratings will be maintained. All ratings are on outlook stable, except Moody's
Investors Service ratings which are on outlook positive. Our financial strength
ratings, which are intended to measure our ability to meet contract holder
obligations, are an important factor affecting public confidence in most of our
products and, as a result, our competitiveness. A downgrade of our financial
strength rating could affect our competitive position in the insurance industry
by making it more difficult for us to market our products as potential
customers may select companies with higher financial strength ratings and by
leading to increased withdrawals by current customers seeking companies with
higher financial strength ratings.

More About the S&P 500 Index. Investors look to indexes as a standard of market
performance. Indexes are model portfolios, that is, groups of stocks or bonds
selected to represent an entire market. The S&P 500 Index is a widely used
measure of large US company stock performance. It consists of the common stocks
of 500 major corporations selected according to size, frequency and ease by
which their stocks trade, and range and diversity of the American economy.

The LVIP SSgA S&P 500 Index Fund seeks to approximate as closely as possible,
before fees and expenses, the total return of the S&P 500 Index. To accomplish
this objective the fund's sub-adviser, SSgA Funds Management, Inc. ("SFM"),
attempts to buy and sell all of the index's securities in the same proportion
as they are reflected in the

3
<PAGE>

S&P 500 Index, although the fund reserves the right not to invest in every
security in the S&P 500 Index if it is not practical to do so under the
circumstances. SFM does not seek to beat the S&P 500 Index and does not seek
temporary defensive positions when markets appear to be overvalued. SFM makes
no attempt to apply economic, financial or market analysis when managing the
fund. Including a security among the fund's holdings implies no opinion as to
its attractiveness as an investment.

The fund may invest in stock index futures and options on stock index futures
as a substitute for a comparable market position in the underlying securities.
A stock index future obligates one party to deliver (and the other party to
take), effectively, an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. Instead,
the buyer and seller settle the difference in cash between the contract price
and the market price on the agreed upon date. The buyer pays the difference if
the actual price is lower than the contract price and the seller pays the
difference if the actual price is higher. There can be no assurance that a
liquid market will exist at the time when the fund seeks to close out a futures
contract or a futures option position. Lack of a liquid market may prevent
liquidation of an unfavorable position.

The Product is not sponsored, endorsed, sold or promoted by Standard & Poor's,
a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of the Product or
any member of the public regarding the advisability of investing in securities
generally or in the Product particularly or the ability of the S&P 500 Index to
track general stock market performance. S&P's only relationship to the Licensee
is the licensing of certain trademarks and trade names of S&P and of the S&P
500 Index which is determined, composed and calculated by S&P without regard to
the Licensee or the Product. S&P has no obligation to take the needs of the
Licensee or the owners of the Product into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the prices and amount of the Product
or the timing of the issuance or sale of the Product or in the determination or
calculation of the equation by which the Product is to be converted into cash.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Product.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA
INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SERVICES

Independent Registered Public Accounting Firm
Ernst & Young LLP, independent registered public accounting firm, One Commerce
Square, 2005 Market Street, Suite 700, Philadelphia, Pennsylvania, 19103, has
audited a) our financial statements of the Lincoln Life Flexible Premium
Variable Life Account M as of December 31, 2011; and b) our consolidated
financial statements of The Lincoln National Life Insurance Company as of
December 31, 2011, which are included in this SAI and Registration Statement.
The aforementioned financial statements are included herein in reliance on
Ernst & Young LLP's reports, given on their authority as experts in accounting
and auditing.

4
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Accounting Services

We have entered into an agreement with the Bank of New York Mellon, N.A., One
Mellon Bank Plaza, 500 Grant Street, Pittsburgh, PA, 19203, to provide
accounting services to the Separate Account. Lincoln Life makes no separate
charge against the assets of the Separate Account for this service.

Checkbook Service for Disbursements

We offer a checkbook service in which the Death Benefit Proceeds are
transferred into an interest-bearing account, in the Beneficiary's name as
owner of the account. Your Beneficiary has quick access to the proceeds and is
the only one authorized to transfer proceeds from the account. This service
allows the Beneficiary additional time to decide how to manage Death Benefit
Proceeds with the balance earning interest from the day the account is opened.

POLICY INFORMATION

Corporate and Group Purchasers and Case Exceptions
This policy is available for purchase by corporations and other groups or
sponsoring organizations on a multiple-life case basis. We reserve the right to
reduce premium loads or any other charges on certain cases, where it is
expected that the amount or nature of such cases will result in savings of
sales, underwriting, administrative or other costs. Eligibility for these
reductions and the amount of reductions will be determined by a number of
factors, including but not limited to, the number of lives to be insured, the
total premiums expected to be paid, total assets under management for the
policy owner, the nature of the relationship among the insured individuals, the
purpose for which the policies are being purchased, the expected persistency of
the individual policies and any other circumstances which we believe to be
relevant to the expected reduction of its expenses. Some of these reductions
may be guaranteed and others may be subject to withdrawal or modification by us
on a uniform case basis. Reductions in these charges will not be unfairly
discriminatory against any person, including the affected policy owners
invested in the Separate Account.

Assignment

While the insured is living, you may assign your rights in the policy,
including the right to change the Beneficiary designation. The assignment must
be in writing, signed by you and received at our Administrative Office. We will
not be responsible for any assignment that is not received by us, nor will we
be responsible for the sufficiency or validity of any assignment. Any
assignment is subject to any Indebtedness owed to Lincoln Life at the time the
assignment is received and any interest accrued on such Indebtedness after we
have received any assignment.

Once received, the assignment remains effective until released by the assignee
in writing. As long as an assignment remains effective, you will not be
permitted to take any action with respect to the policy without the consent of
the assignee in writing.

Transfer of Ownership

As long as the insured is living, you may transfer all of your rights in the
policy by submitting a Written Request to our Administrative Office. You may
revoke any transfer of ownership prior to its effective date. The transfer of
ownership, or revocation of transfer, will not take effect until recorded by
us. Once we have recorded the transfer or revocation of transfer, it will take
effect as of the date of the latest signature on the Written Request.

On the effective date of transfer, the transferee will become the Owner and
will have all the rights of the Owner under the policy. Unless you direct us
otherwise, with the consent of any assignee recorded with us, a transfer will
not affect the interest of any Beneficiary designated prior to the effective
date of transfer.

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Beneficiary

The Beneficiary is initially designated on a form provided by us for that
purpose and is the person who will receive the Death Benefit Proceeds payable.
Multiple Beneficiaries will be paid in equal shares, unless otherwise specified
to the Company.

You may change the Beneficiary at any time while the insured is living, except
when we have received an assignment of your policy or an agreement not to
change the Beneficiary. Any request for a change in the Beneficiary must be in
writing, signed by you, and recorded at our Administrative Office. If the Owner
has specifically requested not to reserve the right to change the Beneficiary,
such a request requires the consent of the Beneficiary. The change will not be
effective until recorded by us. Once we have recorded the change of
Beneficiary, the change will take effect as of the date of latest signature on
the Written Request or, if there is no such date, the date recorded.

If any Beneficiary dies before the insured, the Beneficiary's potential
interest shall pass to any surviving beneficiaries in the appropriate
Beneficiary class, unless otherwise specified to the Company. If no named
Beneficiary survives the insured, any Death Benefit Proceeds will be paid to
you, as the Owner, or to your executor, administrator or assignee.

Right to Convert Contract

You may at any time transfer 100% of the Policy's Accumulation Value to the
General Account and choose to have all future Premium Payments allocated to the
General Account. After you do this, the minimum period the Policy will be in
force will be fixed and guaranteed. The minimum period will depend on the
amount of Accumulation Value, the Specified Amount, the sex, Attained Age and
rating class of the Insured at the time of transfer. The minimum period will
decrease if you choose to surrender the Policy or make a withdrawal. The
minimum period will increase if you choose to decrease the Specified Amount,
make additional Premium Payments, or we credit a higher interest rate or charge
a lower Cost of Insurance Charge than those guaranteed for the General Account.

Change of Plan

Your policy may be exchanged for another policy issued by the Company only if
the Company consents to the exchange and all requirements for the exchange, as
determined by the Company, are met. Your request for exchange must be in
writing.

The Company may not make an offer to you to exchange your policy without
obtaining required regulatory approvals.

Settlement Options

Proceeds will be paid in a lump sum unless you choose a settlement option we
make available.

Deferment of Payments

Amounts payable as a result of Policy Loans, Surrenders or Partial Surrenders
will be paid within seven calendar days of our receipt of such a request in a
form acceptable to us. We may defer payment or transfer from the Fixed Account
up to six months at our option. If we exercise our right to defer any payment
from the Fixed Account, interest will accrue and be paid (as required by law)
from the date you would otherwise have been entitled to receive the payment. We
will not defer any payment used to pay premiums on policies with us.

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Incontestability

The Company will not contest your policy or payment of the death benefit
proceeds based on the initial specified amount, or an increase in the specified
amount requiring evidence of insurability, after your policy or increase has
been in force for two years from date of issue or increase (in accordance with
state law).

Misstatement of Age or Sex

If the age or sex of the insured has been misstated, benefits will be those
which would have been purchased at the correct age and sex.

Suicide

If the insured dies by suicide, while sane or insane, within two years from the
date of issue, the Company will pay no more than the sum of the premiums paid,
less any Indebtedness and the amount of any Partial Surrenders. If the insured
dies by suicide, while sane or insane, within two years from the date any
increase in the specified amount, the Company will pay no more than a refund of
the monthly charges for the cost of the increased amount. This time period
could be less depending on the state of issue.

PERFORMANCE DATA
Performance data may appear in sales literature or reports to Owners or
prospective buyers.

Past performance cannot guarantee comparable future results. Performance data
reflects the time period shown on a rolling monthly basis and is based on
Sub-Account level values adjusted for your policy's expenses.

Data reflects:

o an annual reduction for fund management fees and expenses, and

o a policy level mortality and expense charge applied on a daily equivalent
basis, but

o no deductions for additional policy expenses (i.e., Premium Loads,
Administrative Fees, and Cost of Insurance Charges), which, if included,
would have resulted in lower performance.

These charges and deductions can have a significant effect on policy values and
benefits. Ask your financial representative for a personalized illustration
reflecting these costs.

Sub-Account performance figures are historical and include change in share
price, reinvestment of dividends and capital gains and are net of the asset
management expenses that can be levied against the Sub-Account.

The Average Annual Returns in the table below are calculated in two ways, one
for Money Market Sub-Account, one for all other Sub-Accounts. Both are
according to methods prescribed by the SEC.

Money Market Sub-Account:

The Average Annual Return is the income generated by an investment in the Money
Market Sub-Account over a seven-day period, annualized. The process of
annualizing results when the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment.

The Money Market Sub-Account's return is determined by:

a) calculating the change in unit value for the base period (the 7-day period
ended December 31, of the previous year); then

b) dividing this figure by the account value at the beginning of the period;
then

c) annualizing this result by the factor of 365/7.

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Other Sub-Accounts:

The Average Annual Return for each period is determined by finding the average
annual compounded rate of return over each period that would equate the initial
amount invested to the ending redeemable value for that period, according to
the following formula:

P(1 + T)n = ERV

<TABLE>
<S> <C>
Where: P = a hypothetical initial purchase payment of $1,000
T = average annual total return for the period in question
N = number of years
ERV = ending redeemable value (as of the end of the period in question) of a hypothetical $1,000 purchase
payment made at the beginning of the 1-year, 3-year, 5-year, or 10-year period in question (or fractional period
thereof)
</TABLE>

The formula assumes that:

(1) all recurring fees have been charged to the policy owner's accounts; and

(2) there will be a complete redemption upon the anniversary of the 1-year,
3-year, 5-year, or 10-year period in question.

In accordance with SEC guidelines, we report Sub-Account performance back to
the first date that the fund became available, which could pre-date its
inclusion in this product. Where the length of the performance reporting period
exceeds the period for which the fund was available, Sub-Account performance
will show an "N/A".

FINANCIAL STATEMENTS
The December 31, 2011 financial statements of the Separate Account and the
December 31, 2011 consolidated financial statements of the Company follow.