A TRADITION OF STRENGTH

Financial Strength Frequently Asked Questions

• Can you tell me about Lincoln Financial Group's capital raising plan?
• Why did Lincoln Financial Group decide to participate in the U.S. Treasury's Capital Purchase Program (CPP)?
• Can you tell me more about the U.S. Treasury's Capital Purchase Program (CPP) and what restrictions are companies subject to when they participate in the CPP?
• How will Lincoln Financial's participation in the Capital Purchase Program affect policyowners?
• Can you tell me more about Lincoln Financial Group and its affiliated companies?
• How is Lincoln Financial Group dealing with the current environment?
• Given the recent economic conditions, how safe is my Lincoln Financial life insurance or annuity contract?
• If I have a claim, will Lincoln Financial fulfill it?
• What is the significance of the Lincoln National Corporation holding company to an individual life insurance policy owner?
• What can you tell me about the current financial strength ratings for the Lincoln Financial Group insurance companies?

The data contained in this FAQ may not be accurate after June 22, 2009, and Lincoln Financial Group does not undertake to update or keep it accurate after such date.

Can you tell me about Lincoln Financial Group's capital raising plan?
On June 15, 2009, Lincoln Financial Group took decisive action to raise $1.4 billion in capital by issuing equity and debt, and announcing the sale of our overseas subsidiary, Lincoln UK. We also announced that Lincoln Financial will participate in the U.S. Treasury's Capital Purchase Program (CPP) at a reduced level. These actions are a balanced and prudent approach to capital planning that will strengthen the capital position of our insurance subsidiaries and provide holding company liquidity, even if the markets deteriorate from current levels.

At closing, Lincoln Financial expects to receive $600 million from its common stock offering and $500 million from its senior notes offers, with the ultimate proceeds reduced by issuance costs and other related expenses. The company is targeting $950 million in preferred stock through CPP. Our participation in the Capital Purchase Program will amount to less than half of what had been approved for our company, and will work out to be approximately 6 percent of the company's total capitalization.

Lincoln Financial currently intends to contribute approximately $1 billion of the proceeds to its insurance subsidiaries, with the remaining $1 billion held at the holding company for general corporate purposes, including the repayment of short-term debt and investment in the company's core businesses.

To view the original announcement and for updates on the capital plan, please visit the Press Releases section of www.LincolnFinancial.com.

Why did Lincoln Financial Group decide to participate in the U.S. Treasury's Capital Purchase Program (CPP)?
The preferred stock issued under the Capital Purchase Program (CPP) is an investment in Lincoln Financial by the U.S. Treasury and we view it as flexible capital for Lincoln Financial. The amount of preferred stock issued under CPP is at a manageable level, representing approximately 6 percent of our total capitalization, and was sized for ease of exit both in terms of timing as well as funding considerations for the eventual repayment of the CPP proceeds. Given the continued market volatility, it makes sense to execute on a capital plan that prudently increases our insurance company capital. Although there have been recent signs of improved investor and consumer confidence, we expect the markets to continue to be challenging for some time to come.

In addition, the CPP is only available to healthy financial institutions, and is designed to free up capital to allow financial institutions to invest in the U.S. credit markets. Insurers, like Lincoln Financial, provide a major source of financing for corporations and the government, and are critical to the efficient functioning of the U.S. economy. Following our recently announced capital actions, Lincoln Financial will reinvest more than $2 billion in American housing and industry to help stabilize the economy and support jobs creation — capital that until now has been held in cash instruments.

Can you tell me more about the U.S. Treasury's Capital Purchase Program (CPP) and what restrictions are companies subject to when they participate in the CPP?
The Capital Purchase Program (CPP) is a voluntary program in which the U.S. Treasury invests in preferred equity securities issued by qualified financial institutions. Here are a few important points about CPP:

• The CPP is one of several programs established by the Treasury to help stabilize the financial system.
• Participation in the CPP is reserved for healthy, viable institutions that are recommended by their applicable federal banking regulator.
• Financial institutions participating in the CPP will pay the Treasury a five percent dividend on senior preferred shares for the first five years following the Treasury's investment and a rate of nine percent per year, thereafter. Participating institutions will also issue common stock warrants equal to 15 percent of the CPP funds.

Companies participating in CPP must abide by several restrictions until the funds are repaid, notably:

• Limits on compensation.
• Limits on paying common stock dividends.
• No common stock repurchases.

We have carefully reviewed these restrictions and believe they are manageable.

For more details about the Capital Purchase Program, please visit www.financialstability.gov/roadtostability/capitalpurchaseprogram.html

How will Lincoln Financial's participation in the Capital Purchase Program affect policyowners?
Lincoln Financial does not expect the features or obligations of policyowner contracts to be altered by participation in the Capital Purchase Program. The implementation of our capital plan allows us to immediately increase our capital reserves in our insurance subsidiaries, which increases protection for policyowners. In addition, we have received supportive responses from the independent ratings agencies, which routinely assess the claims-paying ability of insurance companies. We are confident that our actions are the right actions for the long-term stability of our company.

Can you tell me more about Lincoln Financial Group and its affiliated companies?
Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. The companies of Lincoln Financial Group had assets under management of $171 billion as of March 31, 2009. Lincoln National Corporation is a holding company which operates multiple insurance and investment management businesses through subsidiary companies. Lincoln Financial has three insurance subsidiaries: The Lincoln National Life Insurance Company, Fort Wayne, IN; First-Penn Pacific Life Insurance Company, Fort Wayne, IN; and Lincoln Life & Annuity Company of New York, Syracuse, NY. Our insurance subsidiaries, like other insurance companies, are subject to regulations and supervision by the states, territories, and countries in which they are licensed to do business. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life and disability insurance; 401(k) and 403(b) plans; mutual funds; managed accounts; institutional investments; and comprehensive financial planning and advisory services. Affiliates also include Delaware Investments, the marketing name for Delaware Management Holdings, Inc. and its subsidiaries.

Lincoln Financial Group businesses are subject to financial, market, political and economic risks, as well as risks inherent to its business operations. The assets and liabilities of the affiliates are separate from Lincoln Financial Group and would be used to meet the obligations of the affiliates.

For more information on Lincoln Financial Group, please read our Corporate Profile.

How is Lincoln Financial Group dealing with the current environment?
During this unprecedented period of market volatility, Lincoln Financial continues to focus on its mix of insurance, retirement, and investments businesses that bring diversity and balance to our earnings. Lincoln Financial remains committed to its core markets of wealth protection, retirement accumulation, and asset management. While we have realistic expectations for the near future given the economic slowdown, we expect to be well positioned to move our business forward and seize the opportunities that will emerge in this environment to fuel our growth and enhance our ability to serve our clients.

To view information related to earnings, please visit www.LincolnFinancial.com/investor.

Given the recent economic conditions, how safe is my Lincoln Financial life insurance or annuity contract?
Your Lincoln Financial fixed product is supported by assets held in the general account of the insurance company affiliate that serves as your insurer: The Lincoln National Life Insurance Company, First-Penn Pacific Life Insurance Company, or Lincoln Life & Annuity Company of New York. The general accounts of our insurance company affiliates have well-diversified portfolios of investments. The bond portfolios have an overall credit quality rating of 'A.' In addition, if necessary, state guaranty funds provide certain protections to policy owners and contract holders; these protections vary from state to state. For more information about the state guaranty fund system and how it works, go to www.nolhga.com.

The assets related to your Lincoln Financial variable insurance products, and other registered variable product assets, including variable life, variable annuities, and mutual funds, are held in a separate account that is segregated from that insurance company affiliate's general account. Those assets may not be tapped for liabilities in any other area of the insurance company affiliate under any circumstances. The state guaranty fund coverage that current regulation provides generally does not apply to that portion of a variable product where the investment risk for gain or loss is borne by the policyowner and not the company.

To learn more about insurance regulations, you should contact your state department of insurance. You can find contact information for your state insurance department at http://www.naic.org/state_web_map.htm.

If I have a claim, will Lincoln Financial fulfill it?
Insurance regulations require the insurance company affiliates of Lincoln Financial to set aside assets, i.e., reserves, estimated to be sufficient to meet all legitimate policyowner claims. However, we cannot guarantee that we will always be able to meet our claims-paying obligations. If necessary, state guaranty funds provide certain protections to policyowners and contract holders; these protections vary from state to state. For more information about the state guaranty fund system and how it works, go to www.nolhga.com.

In addition, independent rating firms routinely assess the claims-paying ability of our insurance subsidiaries. For more information, please see the question on our current financial strength ratings.

What is the significance of the Lincoln National Corporation holding company to an individual life insurance policy owner?
Lincoln National Corporation is a holding company that operates multiple insurance and investment management businesses through subsidiary companies. If you have a Lincoln Financial policy or contract, it was issued and underwritten by one of our insurance company subsidiaries, not by our holding company. Lincoln Financial continues to take steps to ensure that these insurance company subsidiaries are appropriately capitalized.

What can you tell me about the current financial strength ratings for the Lincoln Financial Group insurance companies?
Independent ratings firms routinely assess the financial strength, stability, and claims-paying ability of our insurance subsidiaries. The ratings agencies currently have a negative outlook on the industry, given the very real near-term challenges of deteriorating equity and credit markets, elevated risks of investment losses, and reduced financial flexibility. However, the agencies have also recognized that the fundamentals of the industry remain strong.

For more information on our ratings, please visit www.LincolnFinancial.com/investor and click on "Ratings" on the left side.

This FAQ information is dated June 22, 2009. The data contained in this FAQ may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

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Lincoln Financial Group businesses are subject to financial, market, political and economic risks, as well as risks inherent to its business operations. New York products are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY. The Lincoln National Life Insurance Company of Fort Wayne, IN, issues products in all other states. The Lincoln National Life Insurance Company does not solicit business in the state of New York nor is it authorized to do so. The assets and liabilities of the affiliates are separate from Lincoln Financial Group and would be used to meet obligations.

Forward-Looking Statements — Cautionary Language

Certain statements made in this document or oral statements made by Lincoln or on Lincoln's behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like: "believe", "anticipate", "expect", "estimate", "project", "will", "shall" and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in our businesses, prospective services or products, future performance or financial results, and the outcome of contingencies, such as legal proceedings. Lincoln claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the results contained in the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements include, among others:

• Continued deterioration in general economic and business conditions, both domestic and foreign, that may affect foreign exchange rates, premium levels, claims experience, the level of pension benefit costs and funding and investment results;
• Continued economic declines and credit market illiquidity could cause us to realize additional impairments on investments and certain intangible assets, including goodwill and a valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures;
• Uncertainty about the impact of the U.S. Treasury's Troubled Asset Relief Program on the economy; and Lincoln's ability to participate in the program;
• Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, Lincoln's products, the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes to statutory reserves and/or risk-based capital requirements related to secondary guarantees under universal life and variable annuity products such as Actuarial Guideline VACARVM; restrictions on revenue sharing and 12b-1 payments; and the potential for U.S. Federal tax reform;
• The initiation of legal or regulatory proceedings against Lincoln or its subsidiaries, and the outcome of any legal or regulatory proceedings, such as: (a) adverse actions related to present or past business practices common in businesses in which Lincoln and its subsidiaries compete; (b) adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and extra-contractual and class action damage cases; (c) new decisions that result in changes in law; and (d) unexpected trial court rulings;
• Changes in interest rates causing a reduction of investment income, the margins of Lincoln's fixed annuity and life insurance businesses and demand for Lincoln's products;
• A decline in the equity markets causing a reduction in the sales of Lincoln's products, a reduction of asset-based fees that Lincoln charges on various investment and insurance products, an acceleration of amortization of deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads and an increase in liabilities related to guaranteed benefit features of Lincoln's variable annuity products;
• Ineffectiveness of Lincoln's various hedging strategies used to offset the impact of changes in the value of liabilities due to changes in the level and volatility of the equity markets and interest rates;
• A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from Lincoln's assumptions used in pricing its products, in establishing related insurance reserves and in the amortization of intangibles that may result in an increase in reserves and a decrease in net income, including as a result of stranger-originated life insurance business;
• Changes in GAAP that may result in unanticipated changes to Lincoln's net income;
• Lowering of one or more of Lincoln's debt ratings issued by nationally recognized statistical rating organizations and the adverse impact such action may have on Lincoln's ability to raise capital and on its liquidity and financial condition;
• Lowering of one or more of the insurer financial strength ratings of Lincoln's insurance subsidiaries and the adverse impact such action may have on the premium writings, policy retention, profitability of its insurance subsidiaries and liquidity;
• Significant credit, accounting, fraud or corporate governance issues that may adversely affect the value of certain investments in the portfolios of Lincoln's companies requiring that Lincoln realize losses on such investments;
• The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including Lincoln's ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;
• The adequacy and collectibility of reinsurance that Lincoln has purchased;
• Acts of terrorism, a pandemic, war or other man-made and natural catastrophes that may adversely affect Lincoln's businesses and the cost and availability of reinsurance;
• Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that Lincoln can charge for its products;
• The unknown impact on Lincoln's business resulting from changes in the demographics of Lincoln's client base, as aging baby-boomers move from the asset-accumulation stage to the asset-distribution stage of life; and
• Loss of key management, portfolio managers in the Investment Management segment, financial planners or wholesalers.

The risks included here are not exhaustive. Lincoln's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC include additional factors which could impact Lincoln's business and financial performance. Moreover, Lincoln operates in a rapidly changing and competitive environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors.

Further, it is not possible to assess the impact of all risk factors on Lincoln's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, Lincoln disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this document.