pea1.htm

<PAGE>

Multi-Fund (Reg. TM) 5 Retirement Annuity
Lincoln National Variable Annuity Account C Individual Variable Annuity
Contracts
Home Office:
The Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46802
1-800-4LINCOLN (454-6265)
www.LincolnFinancial.com

This prospectus describes an individual flexible premium deferred variable
annuity contract that is issued by The Lincoln National Life Insurance Company
(Lincoln Life or Company). This contract is primarily for use with qualified
retirement plans under Sections 408 (IRAs) and 408A (Roth IRAs) of the tax
code. Generally, you do not pay federal income tax on the contract's growth
until it is paid out. However, IRAs provide tax deferral whether or not the
funds are invested in an annuity contract. Further, if your contract is a Roth
IRA, you generally will not pay income tax on distributions, provided certain
conditions are met. Therefore, there should be reasons other than tax deferral
for acquiring the contract within a qualified plan. The contract is designed to
accumulate Contract Value and to provide retirement income over a certain
period of time, or for life, subject to certain conditions. The benefits
offered under this contract may be a variable or fixed amount, if available, or
a combination of both. If you die before the Annuity Commencement Date, we will
pay your Beneficiary a Death Benefit.

The state in which your contract is issued will govern whether or not certain
features, riders, restrictions, limitations, charges and fees will apply to
your contract. You should refer to your contract for these state-specific
features. Please check with your registered representative regarding their
availability.

The minimum initial Purchase Payment must be an eligible rollover from a
qualified plan for which Lincoln Life has agreed to provide a Living Benefit
(defined as Rollover Money). In most cases, the prior participant from the
qualified plan will be the owner and Annuitant of this contract. Additional
Purchase Payments may be made to the contract, subject to certain restrictions,
and must be at least $100 per payment ($25 if transmitted electronically), and
at least $300 annually.

Except as noted below, you choose whether your Contract Value accumulates on a
variable or a fixed (guaranteed) basis or both. Your contract may not offer a
fixed account or if permitted by your contract, we may discontinue accepting
Purchase Payments or transfers into the fixed side of the contract at any time.
If any portion of your Contract Value is in the fixed account, we promise to
pay you your principal and a minimum interest rate. For the life of your
contract or during certain periods, we may impose restrictions on the fixed
account.

The fixed account is not available at this time.

You should carefully consider whether or not this contract is the best product
for you.

All Purchase Payments for benefits on a variable basis will be placed in
Lincoln National Variable Annuity Account C (Variable Annuity Account [VAA]).
The VAA is a segregated investment account of Lincoln Life. You take all the
investment risk on the Contract Value and the retirement income for amounts
placed into one or more of the contract's variable options. If the Subaccounts
you select make money, your Contract Value goes up; if they lose money, it goes
down. How much it goes up or down depends on the performance of the Subaccounts
you select. We do not guarantee how any of the variable options or their funds
will perform. Also, neither the U.S. Government nor any federal agency insures
or guarantees your investment in the contract. The contracts are not bank
deposits and are not endorsed by any bank or government agency.

The available funds are listed below:

BlackRock Variable Series Funds, Inc. (Class III):
BlackRock Global Allocation V.I. Fund

Delaware VIP (Reg. TM) Trust (Service Class):
Delaware VIP (Reg. TM) Diversified Income Series
Delaware VIP (Reg. TM) Small Cap Value Series

DWS Variable Series II (Class B):
DWS Alternative Asset Allocation VIP Portfolio

Fidelity (Reg. TM) Variable Insurance Products:
Fidelity (Reg. TM) Contrafund (Reg. TM) Portfolio (Service Class)
Fidelity (Reg. TM) Mid Cap Portfolio (Service Class 2)

Lincoln Variable Insurance Products Trust:
LVIP American Growth Fund (Service Class II)
LVIP American Global Growth Fund (Service Class II)
LVIP Baron Growth Opportunities Fund (Service Class)

LVIP BlackRock Emerging Markets RPM Fund

(formerly LVIP BlackRock Emerging Markets Index RPM Fund)

LVIP Clarion Global Real Estate Fund (Service Class)
LVIP Delaware Diversified Floating Rate Fund (Service Class)
LVIP Global Income Fund (Service Class)
LVIP MFS International Growth Fund (Service Class)
LVIP MFS Value Fund (Service Class)
LVIP Mid-Cap Value Fund (Service Class)
LVIP Money Market Fund (Service Class)
LVIP SSgA Bond Index Fund (Service Class)
LVIP SSgA Developed International 150 Fund (Service Class)
LVIP SSgA Emerging Markets 100 Fund (Service Class)
LVIP SSgA Global Tactical Allocation RPM Fund (Service Class)
LVIP SSgA International Index Fund (Service Class)
LVIP SSgA Large Cap 100 Fund (Service Class)

1
<PAGE>

LVIP SSgA Moderate Index Allocation Fund (Service Class)
LVIP SSgA S&P 500 Index Fund (Service Class)*
LVIP SSgA Small/Mid Cap 200 Fund (Service Class)
LVIP SSgA Small-Cap Index Fund (Service Class)
LVIP T. Rowe Price Growth Stock Fund (Service Class)
LVIP T. Rowe Price Structured Mid-Cap Growth Fund (Service Class)

LVIP Templeton Growth RPM Fund (Service Class)
LVIP Protected Profile Conservative Fund (Service Class)
LVIP Protected Profile Moderate Fund (Service Class)
LVIP Protected Profile Growth Fund (Service Class)

* "S&P 500" is a trademark of The McGraw-Hill Companies, Inc. and has 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. (Please see the Statement of Additional
Information which sets forth additional disclaimers and limitations of
liability on behalf of S&P.)

This prospectus gives you information about the contracts that you should know
before you decide to buy a contract and make Purchase Payments. You should also
review the prospectuses for the funds and keep all prospectuses for future
reference.

Neither the SEC nor any state securities commission has approved this contract
or determined that this prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.

More information about the contracts is in the current Statement of Additional
Information (SAI), dated the same date as this prospectus. The SAI is
incorporated by reference into this prospectus and is legally part of this
prospectus. For a free copy of the SAI, write: The Lincoln National Life
Insurance Company, PO Box 2340, Fort Wayne, IN 46801-2340, or call
1-800-4LINCOLN (454-6265). The SAI and other information about Lincoln Life and
the VAA are also available on the SEC's website (http://www.sec.gov). There is
a table of contents for the SAI on the last page of this prospectus.

December 7, 2012

2
<PAGE>

Table of Contents

<TABLE>
<CAPTION>
Item Page
<S> <C>
Special Terms 4
Expense Tables 6
Summary of Common Questions 8
The Lincoln National Life Insurance Company 10
Variable Annuity Account (VAA) 11
Investments of the Variable Annuity Account 11
Charges and Other Deductions 14
The Contracts 17
Purchase Payments 18
Transfers On or Before the Annuity Commencement Date 19
Surrenders and Withdrawals 21
Death Benefit Before the Annuity Commencement Date 22
Investment Requirements 23
Living Benefit Riders 25
Guaranteed Benefit 25
i4LIFE (Reg. TM) Advantage 30
Guaranteed Income Benefit with i4LIFE (Reg. TM) Advantage 34
Annuity Payouts 36
Fixed Side of the Contract 38
Distribution of the Contracts 39
Federal Tax Matters 40
Additional Information 43
Voting Rights 43
Return Privilege 43
Other Information 44
Legal Proceedings 44
Contents of the Statement of Additional Information (SAI)
for Lincoln National Variable Annuity Account C 45
</TABLE>

3
<PAGE>

Special Terms
In this prospectus, the following terms have the indicated meanings:

Access Period-Under i4LIFE (Reg. TM) Advantage, a defined period of time during
which we make Regular Income Payments to you while you still have access to
your Account Value. This means that you may make withdrawals, surrender the
contract, and have a Death Benefit.

Account or Variable Annuity Account (VAA)-The segregated investment account,
Account C, into which we set aside and invest the assets for the variable side
of the contract offered in this prospectus.

Account Value-Under i4LIFE (Reg. TM) Advantage, the initial Account Value is
the Contract Value on the Valuation Date that i4LIFE (Reg. TM) Advantage is
effective, less any applicable premium taxes. During the Access Period, the
Account Value on a Valuation Date equals the total value of all of the
Contractowner's Accumulation Units plus the Contractowner's value in the fixed
account, reduced by Regular Income Payments, Guaranteed Income Benefit
payments, and withdrawals.

Accumulation Unit-A measure used to calculate Contract Value for the variable
side of the contract before the Annuity Commencement Date and to calculate the
i4LIFE (Reg. TM) Advantage Account Value during the Access Period.

Annuitant-The person upon whose life the annuity benefit payments are based,
and upon whose life a Death Benefit may be paid.

Annuity Commencement Date-The Valuation Date when funds are withdrawn or
converted into Annuity Units or fixed dollar payout for payment of retirement
income benefits under the Annuity Payout option you select (other than i4LIFE
(Reg. TM) Advantage).

Annuity Payout-A regularly Scheduled Payment (under any of the available
annuity options) that occurs after the Annuity Commencement Date (or Periodic
Income Commencement Date if i4LIFE (Reg. TM) Advantage has been elected).
Payments may be variable or fixed, or a combination of both.

Annuity Unit-A measure used to calculate the amount of Annuity Payouts for the
variable side of the contract after the Annuity Commencement Date. See Annuity
Payouts.

Automatic Annual Step-up-Under Guaranteed Benefit, the Income Base will
automatically step-up to the contract value on each Benefit Year anniversary,
subject to certain conditions.

Beneficiary-The person you choose to receive any Death Benefit paid if you die
before the Annuity Commencement Date.

Benefit Year-Under Guaranteed Benefit, the 12-month period starting with the
effective date of the rider and starting with each anniversary of the rider
effective date after that.

Contractowner (you, your, owner)-The person who can exercise the rights within
the contract (decides on investment allocations, transfers, payout option,
designates the Beneficiary, etc.). The Contractowner is the Annuitant and in
most cases was the participant in a qualified plan.

Contract Value (may be referred to as Account Value in marketing materials)-At
a given time before the Annuity Commencement Date, the total value of all
Accumulation Units for a contract plus the value of the fixed side of the
contract, if any.

Contract Year-Each one-year period starting with the effective date of the
contract and starting with each contract anniversary after that.

Death Benefit-Before the Annuity Commencement Date, the amount payable to your
designated Beneficiary if the Contractowner dies. See The Contracts - Death
Benefit for a description of the Death Benefit.

Excess Withdrawals-Amounts withdrawn during a Benefit Year, as specified for
each Living Benefit rider, which decrease or eliminate the guarantees under the
rider.

Good Order-The actual receipt at our Home Office of the requested transaction
in writing or by other means we accept, along with all information and
supporting legal documentation necessary to effect the transaction. The forms
we provide will identify the necessary documentation. 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.

Guaranteed Annual Income-The guaranteed periodic withdrawal amount available
from the contract each year for life under Guaranteed Benefit.

Guaranteed Annual Income Amount Annuity Payout Option-A payout option available
under Guaranteed Benefit in which the Contractowner (and spouse if applicable)
will receive annual annuity payments equal to the Guaranteed Annual Income
amount for life.

Guaranteed Benefit-Provides minimum guaranteed lifetime periodic withdrawals
that may increase based on automatic step-ups and age-based increases to the
withdrawal amount, regardless of the investment performance of the contract and
provided certain conditions are met.

Guaranteed Income Benefit-An option that provides a guaranteed minimum payout
floor for the i4LIFE (Reg. TM) Advantage Regular Income Payments.

i4LIFE (Reg. TM) Advantage-An Annuity Payout option which combines periodic
variable Regular Income Payments for life and a Death Benefit with the ability
to make withdrawals during a defined period, the Access Period.

Income Base-Under the Guaranteed Benefit, a value used to calculate the
Guaranteed Annual Income amount.

4
<PAGE>

Investment Requirements-Restrictions in how you may allocate your Subaccount
investments if you own certain Living Benefit riders.

Lifetime Income Period-Under i4LIFE (Reg. TM) Advantage, the period of time
following the Access Period during which we make Regular Income Payments to you
(and Secondary Life, if applicable) for the rest of your life. During the
Lifetime Income Period, you will no longer have access to your Account Value or
receive a Death Benefit.

Lincoln Life (we, us, our, Company)-The Lincoln National Life Insurance
Company.

Living Benefit - A general reference to certain riders that may be available
for purchase that provide some type of a minimum guarantee while you are alive.
These riders are the Guaranteed Benefit and i4LIFE (Reg. TM) Advantage (with or
without the Guaranteed Income Benefit). If you select a Living Benefit rider,
Excess Withdrawals may have adverse effects on the benefit, and you may be
subject to Investment Requirements.

Periodic Income Commencement Date-The Valuation Date on which the amount of
i4LIFE (Reg. TM) Advantage Regular Income Payments are determined.

Purchase Payments-Amounts paid into the contract.

Regular Income Payments-The variable, periodic income payments paid under
i4LIFE (Reg. TM) Advantage.

Rollover Money-An eligible rollover from a qualified plan that was invested in
products or programs offered by Lincoln Life.

Secondary Life-Under i4LIFE (Reg. TM) Advantage, the person designated by the
Contractowner upon whose life the Annuity Payouts will also be contingent.

Subaccount-The portion of the VAA that reflects investments in Accumulation and
Annuity Units of a class of a particular fund available under the contracts.
There is a separate Subaccount which corresponds to each class of a fund.

Valuation Date-Each day the New York Stock Exchange (NYSE) is open for trading.

Valuation Period-The period starting at the close of trading (normally 4:00
p.m. New York time) on each day that the NYSE is open for trading (Valuation
Date) and ending at the close of such trading on the next Valuation Date.

5
<PAGE>

Expense Tables
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the
contract.

The first table describes the fees and expenses that you will pay at the time
that you buy the contract, surrender the contract, or transfer contract value
between investment options, and/or (if available) the fixed account. State
premium taxes may also be deducted.

CONTRACTOWNER TRANSACTION EXPENSES:

<TABLE>
<S>
Accumulation Phase:
There are no sales charges, deferred sales charges, or surrender charges associated with
this contract.
</TABLE>

The following tables describe the fees and expenses that you will pay
periodically during the time that you own the contract, not including fund fees
and expenses. Only one table will apply to a given contractowner. The tables
differ based on whether the contractowner has purchased the i4LIFE (Reg. TM)
Advantage rider.
o Table A reflects the expenses for a contract that has not elected the i4LIFE
(Reg. TM) Advantage (Base contract).
o Table B reflects the expenses for a contract that has elected the i4LIFE
(Reg. TM) Advantage.

TABLE A

<TABLE>
<S> <C>
Separate Account Annual Expenses (as a percentage of average daily net assets in the
subaccounts):1
Guarantee of Principal Death Benefit
Mortality and Expense Risk Charge....................................................... 0.60%
Administrative Charge................................................................... 0.15%
Total Separate Account Expenses......................................................... 0.75%
</TABLE>

1 The mortality and expense risk charge and administrative charge together are
0.65% on and after the Annuity
Commencement Date.

<TABLE>
<CAPTION>
Single Life or
Joint
Life
<S> <C>
Living Benefit Rider Charges:
Guaranteed Benefit:1
Guaranteed Maximum Charge........ 2.00%
Current Charge................... 1.00%
</TABLE>

1 As an annualized percentage of the Income Base (established at the time of
the contract issue), as increased for subsequent purchase payments,
Automatic Annual Step-ups, and decreased by Excess Withdrawals. See Charges
and Other Deductions - Guaranteed Benefit Charge for a discussion of these
charges to the Income Base. This charge is deducted from the contract value
on a quarterly basis.

TABLE B

<TABLE>
<S> <C>
i4LIFE (Reg. TM) Advantage Without Guaranteed Income Benefit:1........
Guarantee of Principal Death Benefit................................ 1.05%
</TABLE>

1 As an annualized percentage of Account Value, computed daily. This charge is
assessed on and after the effective date of i4LIFE (Reg. TM) Advantage. See
Charges and Other Deductions - i4LIFE (Reg. TM) Advantage Charge for further
information. These charges continue during the Access Period. The i4LIFE
(Reg. TM) Advantage charge is reduced to 0.95% during the Lifetime Income
Period.

<TABLE>
<CAPTION>
Single Life Joint Life
<S> <C> <C>
i4LIFE (Reg. TM) Advantage With Guaranteed Income Benefit:1........
Guarantee of Principal Death Benefit...............................
Guaranteed Maximum Charge........................................ 3.05% 3.05%
Current Charge................................................... 1.80% 2.00%
</TABLE>

6
<PAGE>

1 As an annualized percentage of Account Value, computed daily. This charge is
assessed only on and after the effective date of the Guaranteed Income
Benefit. The current annual charge for Guaranteed Income Benefit is 0.75% of
Account Value for the single life option and 0.95% of the Account Value for
the joint life option with a guaranteed maximum charge of 2.00%. These
charges are added to i4LIFE (Reg. TM) Advantage charges to comprise the
total charges reflected in the table. During the Lifetime Income Period the
Guaranteed Income Benefit charges are added to the i4LIFE (Reg. TM)
Advantage charge of 0.95%. See Charges and Other Deductions - i4LIFE (Reg.
TM) Advantage with Guaranteed Income Benefit Charge for further information.

The next item shows the minimum and maximum total annual operating expenses
charged by the funds that you may pay periodically during the time that you own
the contract. The expenses are for the year ended December 31, 2011. More
detail concerning each fund's fees and expenses is contained in the prospectus
for each fund.

<TABLE>
<CAPTION>
Minimum Maximum
--------- --------
<S> <C> <C>
Total Annual Fund Operating Expenses (expenses that are deducted from
fund assets, including management fees, distribution and/or service
(12b-1) fees, and other expenses)................................... 0.53% 2.16%
Net Total Annual Fund Operating Expenses (after contractual waivers/
reimbursements*).................................................... 0.53% 1.92%
</TABLE>

* Several of the funds have entered into contractual waiver or reimbursement
arrangements that may reduce fund management and other fees and/or expenses
during the period of the arrangement. These arrangements vary in length, but
no arrangement will terminate before April 30, 2013.

EXAMPLES

The following Examples are intended to help you compare the cost of investing
in the contract with the cost of investing in other variable annuity contracts.
These costs include Contractowner transaction expenses, separate account annual
expenses, and fund fees and expenses. The Examples have been calculated using
the fees and expenses of the funds prior to the application of any contractual
waivers and/or reimbursements.

The first Example assumes that you invest $10,000 in the contract for the time
periods indicated. The Example also assumes that your investment has a 5%
return each year, the maximum fees and expenses of any of the funds and that
the i4LIFE (Reg. TM) Advantage with the Guarantee of Principal Death Benefit
and Guaranteed Income Benefit at guaranteed maximum charge are in effect.
Although your actual costs may be higher or lower, based on these assumptions,
your costs would be:

1) If you surrender your contract at the end of the applicable time period:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
<S> <C> <C> <C>
$520 $1,558 $2,591 $5,156
</TABLE>

2) If you annuitize or do not surrender your contract at the end of the
applicable time period:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
<S> <C> <C> <C>
$520 $1,558 $2,591 $5,156
</TABLE>

The next Example assumes that you invest $10,000 in the contract for the time
periods indicated. The Example also assumes that your investment has a 5%
return each year, the maximum fees and expenses of any of the funds and that
the Guarantee of Principal Death Benefit and Guaranteed Benefit at the
guaranteed maximum charge are in effect. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:

1) If you surrender your contract at the end of the applicable time period:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
<S> <C> <C> <C>
$492 $1,477 $2,463 $4,935
</TABLE>

2) If you annuitize or do not surrender your contract at the end of the
applicable time period:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
<S> <C> <C> <C>
$492 $1,477 $2,463 $4,935
</TABLE>

For more information, see Charges and Other Deductions in this prospectus, and
the prospectuses for the funds. Premium taxes may also apply, although they do
not appear in the examples. Different fees and expenses not reflected in the
examples may be imposed during a period in which Annuity Payouts are made. See
The Contracts - Annuity Payouts. These examples should not be considered a
representation of past or future expenses. Actual expenses may be more or less
than those shown.

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"). As of the date of this prospectus, none have done so. See The Contracts
Market Timing for a discussion of redemption fees.

7
<PAGE>

For information concerning compensation paid for the sale of the contracts, see
Distribution of the Contracts.

Summary of Common Questions

What kind of contract am I buying? This contract is an individual deferred
flexible premium variable annuity contract between you and Lincoln Life. You
may allocate your Purchase Payments to the VAA or to the fixed account, when
available. The fixed account is not currently available. It is designed to be
an Individual Retirement Annuity (IRA) purchased with Rollover Money. This
contract will be issued with the Guaranteed Benefit rider. This prospectus
primarily describes the variable side of the contract. See The Contracts. This
contract and certain riders, benefits, service features and enhancements may
not be available in all states, and the charges may vary in certain states. You
should refer to your contract for any state specific provisions as not all
state variations are discussed in this prospectus. Please check with your
registered representative regarding their availability.

Who can purchase this contract? This contract is available to individuals who
will purchase an IRA contract with Rollover Money from a qualified plan. To be
eligible to purchase this contract, the money must have been invested in a
group variable annuity with a guaranteed minimum withdrawal benefit sold by
Lincoln Life to the qualified plan.

What is the Variable Annuity Account (VAA)? It is a separate account we
established under Indiana insurance law, and registered with the SEC as a unit
investment trust. VAA assets are allocated to one or more Subaccounts,
according to your investment choices. VAA assets are not chargeable with
liabilities arising out of any other business which we may conduct. See
Variable Annuity Account.

What are Investment Requirements? If you elect a Living Benefit rider (except
i4LIFE (Reg. TM) Advantage without Guaranteed Income Benefit), you will be
subject to certain requirements for your Subaccount investments, which means
you may be limited in how much you can invest in certain Subaccounts. See The
Contracts - Investment Requirements.

What are my investment choices? You may allocate your Purchase Payments to the
VAA or to the fixed account, if available. Based upon your instruction for
Purchase Payments, the VAA applies your purchase payments to buy shares in one
or more of the investment options. In turn, each fund holds a portfolio of
securities consistent with its investment policy. See Investments of the
Variable Annuity Account - Description of the Funds.

Who invests my money? Several different investment advisers manage the
investment options. See Investments of the Variable Annuity Account -
Description of the Funds.

How does the contract work? If we approve your application, we will send you a
contract. When you make Purchase Payments during the accumulation phase, you
buy Accumulation Units. If you decide to receive an Annuity Payout, your
Accumulation Units are converted to Annuity Units. Your Annuity Payouts will be
based on the number of Annuity Units you receive and the value of each Annuity
Unit on payout days. See The Contracts.

What charges do I pay under the contract? We apply a charge to the daily net
asset value of the VAA that consists of a mortality and expense risk charge
according to the Death Benefit you select. There is an administrative charge in
addition to the mortality and expense risk charge. The charges for any riders
applicable to your contract will also be deducted from your Contract Value, or
Account Value if i4LIFE (Reg. TM) Advantage is elected. See Charges and Other
Deductions.

We will deduct any applicable premium tax from Purchase Payments or Contract
Value, unless the governmental entity dictates otherwise, at the time the tax
is incurred or at another time we choose.

See Expense Tables and Charges and Other Deductions for additional fees and
expenses in these contracts.

The funds' investment management fees, expenses and expense limitations, if
applicable, are more fully described in the prospectuses for the funds.

Charges may also be imposed during the annuity payout period. See The Contracts
and Annuity Payouts.

For information about the compensation we pay for sales of contracts, see The
Contracts - Distribution of the Contracts.

What Purchase Payments do I make, and how often? Subject to the minimum and
maximum payment amounts, your payments are completely flexible. See The
Contracts - Purchase Payments.

Am I limited in the amount of Purchase Payments I can make into the contract?
Yes, Purchase Payments totaling $1 million or more are subject to Home Office
approval. This amount takes into consideration the total Purchase Payments for
all contracts issued by the Company (or its affiliates) in which you are the
Contractowner and/or Annuitant. In addition, if you elect a Living Benefit
rider, you may be subject to additional restrictions in terms of your ability
to make Purchase Payments. For more information about these restrictions and
limitations, please see The Contracts - Purchase Payments section in this
prospectus.

8
<PAGE>

How will my Annuity Payouts be calculated? If you decide to annuitize, you may
select an annuity option and start receiving Annuity Payouts from your contract
as a fixed option or variable option or a combination of both. See Annuity
Payouts - Annuity Options. Remember that participants in the VAA benefit from
any gain, and take a risk of any loss, in the value of the securities in the
funds' portfolios.

What happens if I die before I annuitize? Your Beneficiary will receive the
Death Benefit proceeds. Your Beneficiary has options as to how the Death
Benefit is paid. See The Contracts - Death Benefit.

May I transfer Contract Value between variable options and between the variable
and fixed sides of the contract? Yes, subject to certain restrictions.
Generally, transfers made before the Annuity Commencement Date are restricted
to no more than twelve (12) per Contract Year. The minimum amount that can be
transferred to the fixed account is $2,000 (unless the total amount in the
Subaccounts is less than $2,000). If transferring funds from the fixed account
to the Subaccount, you may only transfer 25% of the total value invested in the
fixed account in any 12-month period. The minimum amount that may be
transferred is $300. The fixed account is not available at this time. See The
Contracts - Transfers On or Before the Annuity Commencement Date and Transfers
After the Annuity Commencement Date. For further information, see also the
Fixed Side of the Contract .

What are Living Benefit riders? Living Benefit riders are riders available to
purchase for an additional fee. These riders provide different types of minimum
guarantees if you meet certain conditions. These riders offer either a minimum
withdrawal benefit (Guaranteed Benefit) or a minimum annuity payout (i4LIFE
(Reg. TM) Advantage). If you select a Living Benefit rider, Excess Withdrawals
may have adverse effects on the benefit (especially during times of poor
investment performance), and you will be subject to Investment Requirements
(unless you elect i4LIFE (Reg. TM) Advantage without the Guaranteed Income
Benefit). Excess Withdrawals under certain Living Benefit riders may result in
a reduction or premature termination of those benefits or of those riders. If
you are not certain how an Excess Withdrawal will reduce your future guaranteed
amounts, you should contact either your registered representative or us prior
to requesting a withdrawal to find out what, if any, impact the Excess
Withdrawal will have on any guarantees under the Living Benefit rider. These
riders are discussed in detail in this prospectus. Any guarantees under the
contract that exceed your contract value are subject to our financial strength
and claims-paying ability.

What is Guaranteed Benefit? Guaranteed Benefit is a rider with an additional
charge which provides on an annual basis guaranteed lifetime periodic
withdrawals up to a guaranteed amount based on an Income Base, automatic annual
step-ups to the Income Base, and age-based increases to the guaranteed periodic
withdrawal amount. The initial Income Base is calculated by Lincoln based on
guarantees provided by the Lincoln group annuity contract issued to your
employer's retirement plan. Withdrawals may be made up to the Guaranteed Annual
Income amount as long as that amount is greater than zero. The Income Base is
not available as a separate benefit upon death or surrender and is increased by
subsequent purchase payments, automatic annual step-ups to the Income Base and
is decreased by certain withdrawals in accordance with provisions described in
this prospectus. See The Contracts - Guaranteed Benefit. You may not
simultaneously elect Guaranteed Benefit and another one of the Living Benefit
riders. You are subject to Investment Requirements. See The Contracts -
Investment Requirements.

What is i4LIFE (Reg. TM) Advantage? i4LIFE (Reg. TM) Advantage is an Annuity
Payout option, available for purchase at an additional charge, that provides
periodic variable lifetime income payments, a Death Benefit, and the ability to
make withdrawals during a defined period of time (Access Period). For an
additional charge, you may purchase a minimum payout floor, the Guaranteed
Income Benefit. We assess a charge, imposed only during the i4LIFE (Reg. TM)
Advantage payout phase, based on the i4LIFE (Reg. TM) Advantage Death Benefit
and whether or not the Guaranteed Income Benefit is in effect.

What is the Guaranteed Income Benefit? The Guaranteed Income Benefit provides a
minimum payout floor for your i4LIFE (Reg. TM) Advantage Regular Income
Payments. By electing this benefit, you will be subject to Investment
Requirements. See The Contracts - Investment Requirements. The Guaranteed
Income Benefit is purchased when you elect i4LIFE (Reg. TM) Advantage or any
time during the Access Period subject to terms and conditions at that time. The
minimum floor is based on the contract value at the time you elect i4LIFE (Reg.
TM) Advantage with the Guaranteed Income Benefit. See The Contracts - i4LIFE
(Reg. TM) Advantage with Guaranteed Income Benefit.

May I surrender the contract or make a withdrawal? Yes, subject to contract
requirements and to the restrictions of any qualified retirement plan for which
the contract was purchased. See The Contracts - Surrenders and Withdrawals. A
portion of surrender or withdrawal proceeds may be taxable. In addition, if you
decide to take a distribution before age 591/2, a 10% Internal Revenue Service
(IRS) tax penalty may apply. A surrender or a withdrawal also may be subject to
20% withholding. See Federal Tax Matters.

Do I get a free look at this contract? Yes. You can cancel the contract within
ten days (in some states longer) of the date you first receive the contract.
You need to return the contract, postage prepaid, to our Home Office. In most
states you assume the risk of any market drop on Purchase Payments you allocate
to the variable side of the contract. See Return Privilege.

Where may I find more information about accumulation unit values? Because the
subaccounts which are available under the contracts did not begin operation
before the date of this prospectus, financial information for the subaccounts
is not included in this prospectus or in the SAI.

9
<PAGE>

Investment Results

At times, the VAA may compare its investment results to various unmanaged
indices or other variable annuities in reports to shareholders, sales
literature and advertisements. The results will be calculated on a total return
basis for various periods. Total returns include the reinvestment of all
distributions, which are reflected in changes in unit value. The money market
Subaccount's yield is based upon investment performance over a 7-day period,
which is then annualized.

Note that 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 the contract fees and expenses, the yields
of any Subaccount investing in a money market fund may also become extremely
low and possibly negative.

The money market yield figure and annual performance of the Subaccounts are
based on past performance and do not indicate or represent future performance.

The Lincoln National Life Insurance Company
The Lincoln National Life Insurance Company (Lincoln Life or Company),
organized in 1905, is an Indiana-domiciled insurance company, engaged primarily
in the direct issuance of life insurance contracts 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.

Depending on when you purchased your contract, you may be permitted to make
allocations to the fixed account, which is part of our general account. See The
Fixed Side of the Contract. In addition, any guarantees under the contract that
exceed your Contract Value, such as those associated with Death Benefit options
and Living Benefit riders are paid from our general account (not the VAA).
Therefore, any amounts that we may pay under the contract in excess of Contract
Value are subject to our financial strength and claims-paying ability and our
long-term ability to make such payments. With respect to the issuance of the
contracts, Lincoln Life does not file periodic financial reports with the SEC
pursuant to the exemption for life insurance companies provided under Rule
12h-7 of the Securities Exchange Act of 1934.

We issue other types of insurance policies and financial products as well, and
we also pay our obligations under these products from our assets in the general
account. Moreover, unlike assets held in the VAA, the assets of the general
account are subject to the general liabilities of the Company and, therefore,
to the Company's general creditors. In the event of an insolvency or
receivership, payments we make from our general account to satisfy claims under
the contract would generally receive the same priority as our other
Contractowner obligations.

Our Financial Condition. 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.

In addition, state insurance regulations require that insurance companies
calculate and establish on their financial statements, a specified amount of
reserves in order to meet the contractual obligations to pay the claims of 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 contract and claims payments. However, it is important to note that
there is no guarantee that we will always be able to meet our claims paying
obligations, and that there are risks to purchasing any insurance product.

State insurance regulators also require insurance companies to maintain a
minimum amount of capital in excess of liabilities, 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 VAA, are located in the SAI. If you
would like a free copy of the SAI, please write to us at: PO Box 2340, Fort
Wayne, IN 46801-2340 , or call 1-800-4LINCOLN (454-6265). 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
and any unaudited statutory financial statements that may be available by
visiting our website at www.LincolnFinancial.com.

You also will find on our website information on ratings assigned to us by one
or more independent rating organizations. These ratings are opinions of an
operating insurance company's financial capacity to meet the obligations of its
insurance and annuity contracts based on its financial strength and/or
claims-paying ability. Additional information about rating agencies is included
in the Statement of Additional Information.

10
<PAGE>

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.

Variable Annuity Account (VAA)

On June 3, 1981, the VAA was established as an insurance company separate
account under Indiana law. It is registered with the SEC as a unit investment
trust under the provisions of the Investment Company Act of 1940 (1940 Act).
The VAA is a segregated investment account, meaning that its assets may not be
charged with liabilities resulting from any other business that we may conduct.
Income, gains and losses, whether realized or not, from assets allocated to the
VAA are, in accordance with the applicable annuity contracts, credited to or
charged against the VAA. They are credited or charged without regard to any
other income, gains or losses of Lincoln Life. We are the issuer of the
contracts and the obligations set forth in the contract, other than those of
the Contractowner, are ours. The VAA satisfies the definition of a separate
account under the federal securities laws. We do not guarantee the investment
performance of the VAA. Any investment gain or loss depends on the investment
performance of the funds. You assume the full investment risk for all amounts
placed in the VAA.

The VAA is used to support other annuity contracts offered by us in addition to
the contracts described in this prospectus. The other annuity contracts
supported by the VAA generally invest in the same funds as the contracts
described in this prospectus. These other annuity contracts may have different
charges that could affect the performance of their Subaccounts, and they offer
different benefits.

Financial Statements
The December 31, 2011 financial statements of the VAA and the December 31, 2011
consolidated financial statements of Lincoln Life are located in the SAI. If
you would like a free copy of the SAI, complete and mail the request on the
last page of this prospectus, or call 1-800-4LINCOLN (454-6265).

Investments of the Variable Annuity Account

You decide the Subaccount(s) to which you allocate Purchase Payments. There is
a separate Subaccount which corresponds to each class of each fund. You may
change your allocation without penalty or charges. Shares of the funds will be
sold at net asset value with no initial sales charge to the VAA in order to
fund the contracts. The funds are required to redeem fund shares at net asset
value upon our request.

Investment Advisers

As compensation for its services to the funds, each investment adviser for each
fund receives a fee from the funds which is accrued daily and paid monthly.
This fee is based on the net assets of each fund, as defined in the
prospectuses for the funds.

Certain Payments We Receive with Regard to the Funds

With respect to a fund, including affiliated funds, the adviser and/or
distributor, or an affiliate thereof, may make payments to us (or an
affiliate). It is anticipated that such payments will be based on a percentage
of assets of the particular fund attributable to the contracts along with
certain other variable contracts issued or administered by us (or an
affiliate). These percentages are negotiated and vary with each fund. Some
funds may pay us significantly more than other funds and the amount we receive
may be substantial. These percentages currently range up to 0.50%,and as of the
date of this prospectus, we were receiving payments from each fund family. We
(or our affiliates) may profit from these payments or use these payments for a
variety of purposes, including payment of expenses that we (and our affiliates)
incur in promoting, marketing, and administering the contracts and, in our role
as intermediary, the funds. These payments may be derived, in whole or in part,
from the investment advisory fee deducted from fund assets. Contractowners,
through their indirect investment in the funds, bear the costs of these
investment advisory fees (see the funds' prospectuses for more information).
Additionally, a fund's adviser and/or distributor or its affiliates may provide
us with certain services that assist us in the distribution of the contracts
and may pay us and/or certain affiliates amounts for marketing programs and
sales support, as well as amounts to participate in training and sales
meetings.

The funds offered as part of this contract make payments to us under their
distribution plans (12b-1 plans). The payment rates range up to 0.55% based on
the amount of assets invested in those funds. 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 fund's investment return. 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.

11
<PAGE>

Description of the Funds

Each of the Subaccounts of the VAA is invested solely in shares of one of the
funds available under the contract. Each fund may be subject to certain
investment policies and restrictions which may not be changed without a
majority vote of shareholders of that fund.

We select the funds offered through the contract 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 make payments to us or our affiliates. We review
each fund periodically after it is selected. Upon review, we may remove a fund
or restrict allocation of additional Purchase Payments to a fund if we
determine the fund no longer meets one or more of the factors and/or if the
fund has not attracted significant Contractowner assets. Finally, when we
develop a variable annuity 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.

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

Certain funds invest substantially all of their assets in other funds. As a
result, you will pay fees and expenses at both fund levels. This will reduce
your investment return. These arrangements are referred to as funds of funds or
master-feeder funds. Funds of funds or master-feeder structures may have higher
expenses than funds that invest directly in debt or equity securities.

Certain funds may employ hedging strategies to provide for downside protection
during sharp downward movements in equity markets. The cost of these hedging
strategies could limit the upside participation of the fund in rising equity
markets relative to other funds. The Death Benefits and Living Benefit riders
offered under the contract also provide protection in the event of a market
downturn. Likewise, there are additional costs associated with the Death
Benefits and Living Benefit riders, which can limit the contract's upside
participation in the markets. You should consult with your financial
representative to determine which combination of investment choices and Death
Benefit and/or rider purchases (if any) are appropriate for you.

Following are brief summaries of the fund descriptions. More detailed
information may be obtained from the current prospectus for each fund. You
should read each fund prospectus carefully before investing. Prospectuses for
each fund are available by contacting us. In addition, if you receive a summary
prospectus for a fund, you may obtain a full statutory prospectus by referring
to the contact information for the fund company on the cover page of the
summary prospectus. Please be advised that there is no assurance that any of
the funds will achieve their stated objectives.

BlackRock Variable Series Fund, Inc., advised by BlackRock Advisors, LLC and
sub-advised by BlackRock Investment Management, LLC

o BlackRock Global Allocation V.I. Fund: High total investment return.

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

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

o Small Cap Value Series: Capital appreciation.

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

o DWS Alternative Asset Allocation VIP Portfolio: Capital appreciation; a
fund of funds.

Fidelity (Reg. TM) Variable Insurance Products, advised by Fidelity Management
and Research Company and sub-advised by FMR Co., Inc.

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

o Mid Cap Portfolio: Long-term growth of capital.

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

o LVIP American Global Growth Fund: Long-term growth of capital; a master
feeder fund.

o LVIP American Growth Fund: Growth of capital; a master feeder fund.

o LVIP Baron Growth Opportunities Fund: Capital appreciation.
(Sub-advised by BAMCO, Inc.)

o LVIP BlackRock Emerging Markets RPM Fund: To approximate, as closely as
possible, before fees and expenses, the performance of a broad-based
emerging markets index while seeking to control the level of portfolio
volatility.

12
<PAGE>

(Sub-advised by BlackRock Investment Management, LLC)
(formerly LVIP BlackRock Emerging Markets Index RPM Fund)

o LVIP Clarion Global Real Estate Fund: Total return through a combination of
current income and long-term capital appreciation.

(Sub-advised by CBRE Clarion Securities, LLC)

o LVIP Delaware Diversified Floating Rate Fund: Total return.
(Sub-advised by Delaware Management Company)*

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

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

o LVIP MFS Value Fund: Capital appreciation.
(Sub-advised by Massachusetts Financial Services Company)

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

o LVIP Money Market Fund: To maximize current income while maintaining a
stable value of your shares (providing stability of net asset value) and
preserving the value of your initial investment (preservation of capital).

(Sub-advised by Delaware Management Company)*

o LVIP SSgA Bond Index Fund: To match as closely as practicable, before fees
and expenses, the performance of the Barclays Capital U.S. Aggregate
Index.