LINCOLN LIFE VARIABLE ANNUITY ACCOUNT T, 497, 2000-06-21

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT T
497, 2000-06-21

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<PAGE>

This Registration Statement contains two annuity contracts, which are
identical, except the contracts have different charges because they will be
offered for sale through two different distribution channels. Each contract
variation has its own prospectus.
<PAGE>

SEI Variable Annuity
Lincoln Life Variable Annuity Account T
Individual variable annuity contract

Home Office:
Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46801

This Prospectus describes the individual flexible premium deferred variable
annuity contract that is issued by The Lincoln National Life Insurance Company
(Lincoln Life). It is primarily for use with nonqualified plans and 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. The contract is designed to accumulate account value and to
provide retirement income that you cannot outlive or for an agreed upon time.
If you die before the annuity commencement date, we will pay your beneficiary a
death benefit. In the alternative, you may choose to receive a death benefit on
the death of the annuitant.

The minimum initial purchase payment for the contract is $25,000. Additional
purchase payments may be made to the contract and must be at least $100.

All purchase payments for benefits will be placed in Lincoln Life Variable
Annuity Account T (variable annuity account [VAA]). The VAA is a segregated
investment account of Lincoln Life. You take all of the investment risk on the
account value and the retirement income. If the subaccounts you select make
money, your account value goes up; if they lose money, your account value 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 available funds, listed below, are each part of SEI Insurance Products
Trust (trust):
SEI VP Large Cap Growth Fund
SEI VP Large Cap Value Fund
SEI VP Small Cap Growth Fund
SEI VP Small Cap Value Fund
SEI VP International Equity Fund
SEI VP Emerging Markets Equity Fund
SEI VP Emerging Markets Debt Fund
SEI VP Core Fixed Income Fund
SEI VP High Yield Bond Fund
SEI VP International Fixed Income Fund
SEI VP Prime Obligation Fund

This Prospectus gives you information about the contract that you should know
before you decide to buy a contract and make purchase payments. You should also
review the prospectus for the funds that is attached, and keep both
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.

You can obtain a Statement of Additional Information (SAI) about the contract
that has more information. Its terms are made part of this Prospectus. For a
free copy, write: Lincoln National Life Insurance Company, P.O. Box 7878, Fort
Wayne, Indiana 46801, or call 1-800-338-0355. The SAI and other information
about Lincoln Life and Account T are also available on the SEC's web site
(http:\\www.sec.gov). There is a table of contents for the SAI on the last page
of this Prospectus.

June 20, 2000

1
<PAGE>

Table of contents

<TABLE>
<CAPTION>
Page
--------------------------------------------------------------------------------
<S> <C>
Special terms.............................................................. 2
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Expense tables............................................................. 3
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Summary.................................................................... 6
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Condensed financial information............................................ 6
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Investment results......................................................... 7
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Financial statements....................................................... 7
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The Lincoln National Life Insurance Co..................................... 7
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General account............................................................ 7
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Variable annuity account (VAA)............................................. 7
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Investments of the variable annuity account................................ 8
--------------------------------------------------------------------------------
Charges and other deductions............................................... 10
--------------------------------------------------------------------------------
The contracts.............................................................. 10
</TABLE>
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<TABLE>
<CAPTION>
Page
--------------------------------------------------------------------------------
<S> <C>
Annuity payouts........................................................... 14
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Federal tax matters....................................................... 16
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Voting rights............................................................. 19
--------------------------------------------------------------------------------
Distribution of the contracts............................................. 19
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Return privilege.......................................................... 19
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State regulation.......................................................... 20
--------------------------------------------------------------------------------
Records and reports....................................................... 20
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Other information......................................................... 20
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Statement of additional information table of contents for Variable Annuity
Account T SEI Variable Annuity........................................... 21
</TABLE>
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Special terms

(We have italicized the terms that have special meaning throughout the
Prospectus.)
Account or variable annuity account (VAA)--The segregated investment account,
Account T, into which Lincoln Life sets aside and invests the assets of the
contract offered in this Prospectus.

Account value--At a given time before the annuity commencement date, the total
value of all accumulation units for a contract.
Accumulation unit--A measure used to calculate account value before the annuity
commencement date.
Annuitant--The person on whose life the annuity benefit payments are based and
upon whose death a death benefit may be paid.
Annuity commencement date--The valuation date when funds are withdrawn or
converted into annuity units for payment of retirement income benefits under
the annuity payout option you select.
Annuity payout--An amount paid at regular intervals after the annuity
commencement date under one of several options available to the annuitant
and/or any other payee. This amount may be paid on a variable or fixed basis or
a combination of both.
Annuity unit--A measure used to calculate the amount of annuity payouts after
the annuity commencement date.
Beneficiary--The person you choose to receive the death benefit.
Contractowner (you, your, owner)--The person who has the ability to exercise
the rights within the contract (decides on investment allocations, transfers,
payout option, designates the beneficiary, etc.) Usually, but not always, the
owner is the annuitant.
Contract year--Each one-year period starting with the effective date of the
contract and starting with each contract anniversary after that.
Death benefit--The amount payable to your designated beneficiary if the owner
dies before the annuity commencement date or, if selected, to the contractowner
if the annuitant dies. Four death benefit options are available.
Lincoln Life (we, us, our)--The Lincoln National Life Insurance Company.
Purchase payments--Amounts paid into the contract.
Subaccount or SEI Variable Annuity 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.
Trust--SEI Insurance Products Trust (trust), the funds to which you direct
purchase payments.
Valuation date--Each day the New York Stock Exchange (NYSE) is open for
trading.
Valuation period--The period starting at the close of trading (currently 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.

2
<PAGE>

Expense tables

Summary of Contractowner expenses:

Annual Account Fee: $40

(See Charges and other deductions).

The account fee will be waived for any contract year if your account value
equals or exceeds $50,000.00.

--------------------------------------------------------------------------------
Account T annual expenses for SEI Variable Annuity subaccounts:*
(as a percentage of average account value)
<TABLE>
<CAPTION>
Death benefit options
----------------------------
Return Annual 5%
Account of Step- Step-
Value Premium Up Up
<S> <C> <C> <C> <C>
Mortality and expense risk charge: 1.20% 1.25% 1.35% 1.50%
Administrative charge: .15% .15% .15% .15%
----- ----- ----- -----
Total annual charge for each subaccount: 1.35% 1.40% 1.50% 1.65%
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
The
mortality
and expense
risk charge
is based on
the
particular
death
benefit
option you
choose. (See
Charges and
other
deductions.)
</TABLE>

Annual expenses of the funds:
(as a percentage of each fund's average net assets):

<TABLE>
<CAPTION>
Management Other expenses Total expenses Total expenses
Fees (before (before any (before any (after any
any waivers/ waivers/ waivers/ waivers/
reimbursements) reimbursements)** reimbursements) reimbursements)***
--------------- + ----------------- = --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
1. Large Cap Growth 0.40% 0.82% 1.22% 0.85%
------------------------------------------------------------------------------------------------------------
2. Large Cap Value 0.35% 0.82% 1.17% 0.85%
------------------------------------------------------------------------------------------------------------
3. Small Cap Growth 0.65% 0.82% 1.47% 1.10%
------------------------------------------------------------------------------------------------------------
4. Small Cap Value 0.65% 0.82% 1.47% 1.10%
------------------------------------------------------------------------------------------------------------
5. International Equity 0.51% 1.06% 1.57% 1.28%
------------------------------------------------------------------------------------------------------------
6. Emerging Markets Equity 1.05% 1.33% 2.38% 1.95%
------------------------------------------------------------------------------------------------------------
7. Emerging Markets Debt 0.85% 1.44% 2.29% 1.35%
------------------------------------------------------------------------------------------------------------
8. Core Fixed Income 0.28% 0.75% 1.03% 0.60%
------------------------------------------------------------------------------------------------------------
9. High Yield Bond 0.49% 0.82% 1.31% 0.85%
------------------------------------------------------------------------------------------------------------
10. International Fixed Income 0.30% 1.41% 1.71% 1.00%
------------------------------------------------------------------------------------------------------------
11. Prime Obligation 0.08% 0.86% 0.94% 0.44%
------------------------------------------------------------------------------------------------------------
</TABLE>

* The VAA is divided into separately named subaccounts, eleven of which are
available under the contracts. Each subaccount, in turn, invests purchase
payments in shares of its respective fund.
** Other expenses are based on estimated amounts for the current fiscal year.
***SIMC and SEI Investments Fund Management have each voluntarily agreed to
waive a portion of their fees for the current year in order to keep total
operating expenses at a specified level. SIMC and/or SEI Investments Fund
Management may discontinue all or part of their waivers at any time.

3
<PAGE>

Examples

(expenses of the subaccounts and of the funds):

If you surrender your contract at the end of the time period shown, you would
pay the following expenses on a $1,000 investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
For Account Value Death Benefit:
1. SEI VP Large Cap Growth Fund $26 $ 79
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 26 78
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 29 85
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 29 85
----------------------------------------------------------
5. SEI VP International Equity Fund 30 88
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 38 110
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 37 107
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 24 72
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 27 80
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 31 92
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 23 70
----------------------------------------------------------
For Return of Premium Death Benefit:
1. SEI VP Large Cap Growth Fund $26 $ 80
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 27 79
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 29 86
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 29 86
----------------------------------------------------------
5. SEI VP International Equity Fund 30 89
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 38 111
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 37 109
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 25 74
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 27 82
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 31 93
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 24 71
----------------------------------------------------------
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
For Annual Step-Up Death Benefit:
1. SEI VP Large Cap Growth Fund $27 $83
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 28 82
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 30 89
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 30 89
----------------------------------------------------------
5. SEI VP International Equity Fund 31 92
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 39 114
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 38 111
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 26 77
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 28 85
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 32 96
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 25 74
----------------------------------------------------------
For 5% Step-Up Death Benefit:
1. SEI VP Large Cap Growth Fund $29 $88
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 29 86
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 31 93
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 31 93
----------------------------------------------------------
5. SEI VP International Equity Fund 32 96
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 40 118
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 40 115
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 27 81
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 30 89
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 34 100
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 26 78
----------------------------------------------------------
</TABLE>
We provide these examples to help you understand the direct and indirect costs
and expenses of the contract. Examples are given for each of the death benefit
options.

For more information, see Charges and other deductions in this Prospectus, and
in the prospectus for the funds. Premium taxes may also apply, although they do
not appear in the examples. These examples should not be considered a
representation of past or future expenses. Actual expenses may be more or less
than those shown.

5
<PAGE>

Summary

What kind of contract am I buying? It is an individual variable annuity
contract between you and Lincoln Life. See The contracts.

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 Lincoln Life may conduct.
See Variable annuity account.

What are my investment choices? Based upon your instruction, the VAA applies
purchase payments to buy trust shares in one or more of the investment funds of
the trust: Large Cap Growth Fund, Large Cap Value Fund, Small Cap Growth Fund,
Small Cap Value Fund, International Equity Fund, Emerging Markets Equity Fund,
Emerging Markets Debt Fund, Core Fixed Income Fund, High Yield Bond Fund,
International Fixed Income Fund, Prime Obligation Fund. In turn, each fund
holds a portfolio of securities consistent with its investment policy. See
Investments of the variable annuity account--Description of the trust.

Who invests my money? The investment adviser for the trust is SEI Investments
Management Corporation (SIMC). SIMC is registered as an investment adviser with
the SEC. See Investments of the variable annuity--Investment adviser.

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 retirement income payments,
your accumulation units are converted to annuity units. Your retirement income
payments will be based on the number of annuity units you received and the
value of each annuity unit on payout days. See The contracts.

What charges do I pay under the contract? We will deduct any applicable premium
tax from purchase payments or account value at the time the tax is incurred or
at another time we choose.

We apply an annual charge totaling 1.35%, 1.40%, 1.50% or 1.65% to the daily
net asset value of the VAA depending on the death benefit option chosen. This
charge includes 0.15% as an administrative charge; the balance of the charge is
a mortality and expense risk charge. We charge an account fee of $40 per
contract year if the account value is less than $50,000. See Charges and other
deductions.

This trust pays a management fee to SIMC based on the average daily net asset
value of each fund. See Investments of the variable annuity account-Investment
adviser. Each fund also has additional operating expenses. These are described
in the prospectus for the trust.

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

How will my annuity payouts be calculated? If you decide to annuitize, you may
select an annuity option and start receiving retirement income payments 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 you have chosen. Your beneficiary has options as to how the death
benefit is paid or you may choose an option for your beneficiary. In the
alternative, you may choose to receive a death benefit upon the death of the
annuitant. See The contracts--Death benefit before the annuity commencement
date.

May I transfer account value between variable options? Yes, with certain
limits. See The contracts--Transfers on or before the annuity commencement date
and Transfers after the annuity commencement date.

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.

In addition, if you decide to take a distribution before age 59 1/2, 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.

Condensed financial information for the variable annuity account

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.

6
<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. See the SAI for
further information.

Financial statements

The statutory-basis financial statements of Lincoln Life are located in the
SAI. No financial statements are included for the VAA because as of December
31, 1999, the account had not yet commenced operations. If you would like a
free copy of the SAI, complete and mail the enclosed card, or call 1-800-338-
0355.

The Lincoln National Life Insurance Co.

Lincoln Life was founded in 1905 and is organized under Indiana law. We are one
of the largest stock life insurance companies in the United States. We are
owned by Lincoln National Corp. (LNC) which is also organized under Indiana
law. LNC's primary businesses are insurance and financial services.

General account

The general account of Lincoln Life is subject to regulation and supervision by
the Indiana Department of Insurance as well as the insurance laws and
regulations of the jurisdictions in which the contracts are distributed.

In reliance on certain exemptions, exclusions and rules, Lincoln Life has not
registered interests in the general account as a security under the Securities
Act of 1933 and has not registered the general account as an investment company
under the Investment Company Act of 1940. Accordingly, neither the general
account nor any interests in it are regulated under the 1933 Act or the 1940
Act. Lincoln Life has been advised that the staff of the SEC has not made a
review of the disclosures which are included in this Prospectus which relate to
our general account. These disclosures, however, may be subject to certain
generally applicable provisions of the federal securities laws regulating the
accuracy and completeness of statements made in prospectuses. This Prospectus
is generally intended to serve as a disclosure document only for aspects of the
contract involving the VAA, and therefore contains only selected information
regarding the fixed annuity payouts.

Variable annuity account
(VAA)

On January 25, 2000, 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 SEC does not supervise the VAA or Lincoln Life. 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. 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 Lincoln Life in
addition to the contracts described in this Prospectus. The other annuity
contracts supported by the VAA invest in the same portfolios of the trust as
the contracts described in this Prospectus. These other annuity contracts may
have different charges that could affect the performance of the subaccount.

7
<PAGE>

Investments of the variable annuity account

You decide the subaccount(s) to which you allocate purchase payments. You may
change your allocation without penalty or charges. Shares of the funds will be
sold at net asset value. The trust is required to redeem fund shares at net
asset value upon our request. We reserve the right to add, delete or substitute
funds.

Investment adviser
The investment adviser for the trust is SEI Investments Management Corporation
(SIMC). As compensation for its services to the trust, the investment adviser
receives a fee from the trust which is accrued daily and paid monthly. This fee
is based on the net assets of each fund, as defined under Purchase and
Redemption of Shares, in the prospectus for the trust.

Additionally, SIMC currently has thirty-two sub-advisory agreements in which
the sub-adviser may perform some or substantially all of the investment
advisory services required by those respective funds. See the trust prospectus
for additional information on the sub-adviser.

No additional compensation from the assets of those funds will be assessed as a
result of the sub-advisory agreements.

Description of the trust
SEI Insurance Products Trust (trust) is an open-end management investment
company that has diversified and non-diversified portfolios. The trust was
organized as a Massachusetts business trust under a Declaration of Trust dated
December 14, 1998. The Declaration of Trust permits the trust to offer separate
series ("funds") of units of beneficial interest ("shares") and different
classes of shares. Each share of each fund represents an equal proportionate
interest in that fund with each other share of that fund. All consideration
received by the trust for shares of any class of any fund and all assets of
such fund or class belong to that fund or class, respectively, and would be
subject to the liabilities related thereto.

Following are brief summaries of the investment objectives and policies of the
funds. Each fund is subject to certain investment policies and restrictions
which may not be changed without a majority vote of shareholders of that fund.
More detailed information may be obtained from the current prospectus for the
trust which is included in this booklet. Please be advised that there is no
assurance that any of the funds will achieve their stated objectives.

1. SEI VP LARGE CAP GROWTH FUND--The investment objective of the SEI VP Large
Cap Growth Fund is capital appreciation.

The Fund invests primarily in U.S. companies with market capitalizations of
more than $1 billion.

2. SEI VP LARGE CAP VALUE FUND--The investment objective of the SEI VP Large
Cap Value Fund is long-term growth of capital and income.

The Fund invests primarily in common stocks of U.S. companies with market
capitalizations of more than $1 billion.

3. SEI VP SMALL CAP GROWTH FUND--The investment objective of the SEI VP Small
Cap Growth Fund is long-term capital appreciation.

The Fund invests primarily in common stocks of U.S. companies with market
capitalizations less than $2 billion.

4. SEI VP SMALL CAP VALUE FUND--The investment objective of the SEI VP Small
Cap Value Fund is capital appreciation.

The Fund invests primarily in common stocks of U.S. companies with market
capitalizations of less than $2 billion.

5. SEI VP INTERNATIONAL EQUITY FUND--The SEI VP International Equity Fund seeks
to provide long-term capital appreciation by investing primarily in a diver-
sified portfolio of equity securities of non-U.S. issuers.

6. SEI VP EMERGING MARKETS EQUITY FUND--The SEI VP Emerging Markets Equity Fund
seeks to provide capital appreciation by investing primarily in a diversi-
fied portfolio of equity securities of emerging market issuers.

7. SEI VP EMERGING MARKETS DEBT FUND--The investment objective of the SEI VP
Emerging Markets Debt Fund is to maximize total return.

The Fund invests primarily in U.S. dollar denominated debt securities of
government, government-related and corporate issuers in emerging market
countries and of entities organized to restructure the outstanding debt of
such issuers.

8. SEI VP CORE FIXED INCOME FUND--The investment objective of the SEI VP Core
Fixed Income Fund is current income consistent with the preservation of cap-
ital.

The Fund invests primarily in investment grade U.S. corporate and government
fixed income securities, including mortgage-backed securities.

9. SEI VP HIGH YIELD BOND FUND--The investment objective of the SEI VP High
Yield Bond Fund is to maximize total return.

The Fund invests primarily in fixed income securities that are rated below
investment grade ("junk bonds"), including corporate bonds and debentures,
convertible and preferred securities, and zero coupon obligations.

8
<PAGE>

10. SEI VP INTERNATIONAL FIXED INCOME FUND--The SEI VP International Fixed In-
come Fund seeks to provided capital appreciation and current income through
investment primarily in investment grade, non-U.S. dollar denominated gov-
ernment, corporate, mortgage-backed and asset-backed fixed income securi-
ties.

11. SEI VP PRIME OBLIGATION FUND--The SEI VP Prime Obligation Fund seeks to
preserve principal value and maintain a high degree of liquidity while pro-
viding current income.

Asset allocation portfolios
SIMC currently offers twelve asset allocation portfolios which are available to
variable annuity purchasers. You can choose one of these asset allocation
portfolios or choose the customized allocation in which you determine your own
allocations among the funds. If you choose one of these asset allocation
portfolios, SIMC will determine the allocation of your purchase payments into
the funds.

If you want to change your portfolio selection, you must notify us in writing
or over the telephone, if we have received proper telephone authorization.

The available portfolios are:

1. VP INSTITUTIONAL MODERATE GROWTH & INCOME PORTFOLIO

2. VP INSTITUTIONAL GROWTH & INCOME PORTFOLIO

3. VP INSTITUTIONAL CAPITAL GROWTH PORTFOLIO

4. VP INSTITUTIONAL EQUITY PORTFOLIO

5. VP GLOBAL MODERATE GROWTH & INCOME PORTFOLIO

6. VP GLOBAL GROWTH & INCOME PORTFOLIO

7. VP GLOBAL CAPITAL GROWTH PORTFOLIO

8. VP GLOBAL EQUITY PORTFOLIO

9. VP MODERATE GROWTH & INCOME PORTFOLIO

10. . VP GROWTH & INCOME PORTFOLIO

11. VP CAPITAL GROWTH PORTFOLIO

12. VP DOMESTIC EQUITY PORTFOLIO

We will periodically rebalance your account value among the funds in accordance
with the SIMC-determined percentage allocations of your chosen asset allocation
portfolio. In addition, SIMC periodically reviews the percentage fund
allocations associated with each asset allocation portfolio. If SIMC determines
that the allocations of your chosen asset allocation portfolio should be
adjusted, we will reallocate your annuity account value among the funds
accordingly.

Sale of fund shares
We will purchase shares of the funds at net asset value and direct them to the
appropriate subaccounts of the VAA. We will redeem sufficient shares of the
appropriate funds to pay annuity payouts, death benefits, surrender/withdrawal
proceeds or for other purposes described in the contract. If you want to
transfer all or part of your investment from one subaccount to another, we may
redeem shares held in the first and purchase shares of the other. The shares
are retired, but they may be reissued later.

Shares of the funds are not sold directly to the general public. They are sold
to Lincoln Life, and may be sold to other insurance companies, for investment
of the assets of the subaccounts established by those insurance companies to
fund variable annuity and variable life insurance contracts.

When the trust sells shares in any of its funds both to variable annuity and to
variable life insurance separate accounts, it is said to engage in mixed
funding. When the trust sells shares in any of its funds to separate accounts
of unaffiliated life insurance companies, it is said to engage in shared
funding.

The trust currently engages in mixed and shared funding. Therefore, due to
differences in redemption rates or tax treatment, or other considerations, the
interests of various contractowners participating in a fund could conflict. The
trust's Board of Trustees will monitor for the existence of any material
conflicts, and determine what action, if any, should be taken. See the
prospectus for the trust.

Reinvestment of dividends and capital gain distributions
All dividend and capital gain distributions of the funds are automatically
reinvested in shares of the distributing funds at their net asset value on the
date of distribution. Dividends are not paid out to contractowners as
additional units, but are reflected as changes in unit values.

Addition, deletion or substitution of investments
We reserve the right, within the law, to make additions, deletions and
substitutions for the trust in which the VAA participates. (We may substitute
shares of other funds for shares already purchased, or to be purchased in the
future, under the contract. This substitution might occur if shares of a fund
should no longer be available, or if investment in any fund's shares should
become inappropriate, in the judgment of our management, for the purposes of
the contract). We cannot substitute shares of one fund for another without the
approval by the SEC. We will also notify you.

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Charges and other deductions

We will deduct the charges described below to cover our costs and expenses,
services provided and risks assumed under the contracts. We incur certain costs
and expenses for the distribution and administration of the contracts and for
providing the benefits payable thereunder. More particularly, our
administrative services include: processing applications for and issuing the
contracts, processing purchases and redemptions of fund shares as required
(including dollar cost averaging, cross-reinvestment, automatic withdrawal
services, and portfolio rebalancing), maintaining records, administering
annuity payouts, furnishing accounting and valuation services (including the
calculation and monitoring of daily subaccount values), reconciling and
depositing cash receipts, providing contract confirmations, providing toll-free
inquiry services and furnishing telephone fund transfer services. The risks we
assume include: the risk that annuitants, upon whose lives annuity payouts
under contract are based, live longer than we assumed when we calculated our
guaranteed rates (these rates are incorporated in the contract and cannot be
changed); the risk that death benefits paid will exceed the actual account
value; and the risk that our costs in providing the services will exceed our
revenues from the contract charges (which we cannot change). However, if the
charges deducted prove more than sufficient to cover our risks, we will keep
the profit. The amount of a charge may not necessarily correspond to the costs
associated with providing the services or benefits indicated by the description
of the charge.

Deductions from the VAA for SEI Variable Annuity
We deduct from the VAA an amount, computed daily, which is equal to an annual
rate depending on the death benefit option elected of the daily net asset
value. The charge includes a 0.15% administrative charge and a mortality and
expense risk charge. The mortality and expense risk charge is 1.20% for the
account value death benefit option; 1.25% for the return of premium death
benefit option; 1.35% for the annual step-up death benefit option and 1.50% for
the 5% step-up death benefit option.

Account fee

For contracts with an account value less than $50,000, during the accumulation
period, we will deduct $40 from the account value on each contract anniversary
to compensate us for the administrative services provided to you; this $40
account fee will also be deducted from the account value upon surrender. This
fee may be lower in certain states, if required. The account fee will be waived
for any contract with an account value that equals or exceeds $50,000 on the
contract anniversary.

Deductions for premium taxes
Any premium tax or other tax levied by any government entity as a result of the
existence of the contracts of the VAA will be deducted from the account value
when incurred, or at another time of our choosing.

The applicable premium tax rates that states and other governmental entities
impose on the purchase of an annuity are subject to change by legislation, by
administration interpretation or by judicial action. These premium taxes
generally depend upon the law of your state of residence. The tax ranges from
0.5% to 5.0%.

Other charges and deductions
There are deductions from and expenses paid out of the assets of the underlying
trust that are more fully described in the prospectus for the trust.

Additional information
The charges described previously may be reduced or eliminated for any
particular contract. However, these charges will be reduced only to the extent
that we anticipate lower distribution and/or administrative expenses, or that
we perform fewer sales or administrative services than those originally
contemplated in establishing the level of those charges. Lower distribution and
administrative expenses may be the result of economies associated with (1) the
use of mass enrollment procedures, (2) the performance of administrative or
sales functions by the employer, (3) the use by an employer of automated
techniques in submitting deposits or information related to deposits on behalf
of its employees or (4) any other circumstances which reduce distribution or
administrative expenses. The exact amount of charges applicable to a particular
contract will be stated in that contract.

The contracts

Purchase of contracts
If you wish to purchase a contract, you must apply for it through a sales
representative authorized by us. The completed application is sent to us and we
decide whether to accept or reject it. If the application is accepted, a
contract is prepared and executed by our legally authorized officers. The
contract is then sent to you through your sales representative. See
Distribution of the contracts.

When a completed application and all other information necessary for processing
a purchase order is received, an initial purchase payment will be priced no
later than two business days after we receive the order. While attempting to
finish an incomplete application, we may hold the initial purchase payment for
no more than five business days. If the incomplete application

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cannot be completed within those five days, you will be informed of the
reasons, and the purchase payment will be returned immediately. Once the
application is complete, the initial purchase payment must be priced within two
business days.

Who can invest
To apply for a contract, you must be of legal age in a state where the
contracts may be lawfully sold and also be eligible to participate in any of
the qualified or nonqualified plans for which the contracts are designed. The
contractowner, joint owner and annuitant must be less than age 91.

Purchase payments
Purchase payments are payable to us at a frequency and in an amount selected by
you in the application. The minimum initial purchase payment is $25,000. The
minimum payment to the contract at any one time must be at least $100 ($25 if
transmitted electronically). Purchase payments in total may not exceed
$2,000,000 for an owner or $1,000,000 for each joint owner without our
approval. We may terminate the contract as allowed by your state's non-
forfeiture law for individual deferred annuities. Payments may be made or, if
stopped, resumed at any time until the annuity commencement date, the surrender
of the contract, maturity date or the payment of any death benefit, whichever
comes first.

Valuation date
Accumulation and annuity units will be valued once daily at the close of
trading (currently 4:00 p.m., New York time) on each day the New York Stock
Exchange is open (valuation date). On any date other than a valuation date, the
accumulation unit value and the annuity unit value will not change.

Allocation of purchase payments
Purchase payments are placed into the VAA's subaccounts, each of which invests
in shares of its corresponding fund of the trust, according to your
instructions.

The minimum amount of any purchase payment that can be put into any one
subaccount is $20. Upon allocation to a subaccount, purchase payments are
converted into accumulation units. The number of accumulation units credited is
determined by dividing the amount
allocated to each subaccount by the value of an accumulation unit for that
subaccount on the valuation date on which the purchase payment is received at
our home office if received before 4:00 p.m., New York time. If the purchase
payment is received at or after 4:00 p.m., New York time, we will use the
accumulation unit value computed on the next valuation date. The number of
accumulation units determined in this way is not changed by any subsequent
change in the value of an accumulation unit. However, the dollar value of an
accumulation unit will vary depending not only upon how well the underlying
fund's investment perform, but also upon the expenses of the VAA and the
underlying funds.

Valuation of accumulation units
Purchase payments allocated to the VAA are converted into accumulation units.
This is done by dividing each purchase payment by the value of an accumulation
unit for the valuation period during which the purchase payment is allocated to
the VAA. The accumulation unit value for each subaccount was or will be
established at the inception of the subaccount. It may increase or decrease
from valuation period to valuation period. The accumulation unit value for a
subaccount for a later valuation period is determined as follows:

(1) The total value of the fund shares held in the subaccount is calculated by
multiplying the number of fund shares owned by the subaccount 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 if an ex-dividend date occurs during the valuation
period; minus

(2) The liabilities of the subaccount at the end of the valuation period; these
liabilities include daily charges imposed on the subaccount, and may
include a charge or credit with respect to any taxes paid or reserved for
by us that we determine result from the operations of the VAA; and

(3) The result of (2) is divided by the number of subaccount units outstanding
at the beginning of the valuation period.

The daily charges imposed on a subaccount for any valuation period are equal to
the daily mortality and expense risk charge and the daily administrative charge
multiplied by the number of calendar days in the valuation period. Because a
different daily charge is made for contracts with different death benefit
options, contracts with different death benefit options will have different
corresponding accumulation unit values on any given day.

Transfers on or before the annuity commencement date
You may transfer all or a portion of your investment from one subaccount to
another. A transfer involves the surrender of accumulation units in one
subaccount and the purchase of accumulation units in the other subaccount. A
transfer will be done using the respective accumulation unit values determined
at the end of the valuation date on which the transfer request is received.
Currently, there is no charge for a transfer. However, we reserve the right to
impose a charge in the future for transfers.

Transfers between subaccounts are restricted to twelve times every contract
year. We reserve the right to waive this twelve-time limit. This limit does not
apply to

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transfers made under dollar cost averaging, cross reinvestment, or portfolio
rebalancing program(s) or under the asset allocation portfolios elected on
forms available from us. (See Investments of the variable annuity account--
Description of the trust for information on the asset allocation portfolios and
the SAI for information on the other programs.) The minimum amount that may be
transferred between subaccounts is $300 (or the entire amount in the
subaccount, if less than $300). If the transfer from a subaccount would leave
you with less than $300 in the subaccount, we may transfer the entire balance
of the subaccount.

A transfer request may be made to our home office using written, telephone or
electronic instructions, if the appropriate authorization is on file with us.
In order to prevent unauthorized or fraudulent telephone or electronic
transfers, we may require the user to provide certain identifying information
before we will act upon their instructions. We may also assign the
contractowner a Personal Identification Number (PIN) to serve as
identification. We will not be liable for following instructions we reasonably
believe are genuine. Telephone requests may be recorded and written
confirmation of all transfer requests will be mailed to the contractowner on
the next valuation date. Telephone and electronic transfers will be processed
on the valuation date that they are received when they are received at our
customer service center before 4 p.m. New York time.

When thinking about a transfer of account value, you should consider the
inherent risk involved. Frequent transfers based on short-term expectations may
increase the risk that a transfer will be made at an inopportune time. Lincoln
Life may allow more than twelve transfers in any contract year. This contract
is not designed for professional market timing organizations or other entities
using programmed and frequent transfers.

Repeated patterns of frequent transfers are disruptive to the operation of the
subaccounts, and should Lincoln Life become aware of such disruptive practices,
Lincoln Life may refuse to permit such transfers.

Payment or transfer may be delayed as permitted by the 1940 Act.

Transfers after the annuity commencement date
You may transfer all or a portion of your investment in one subaccount to
another subaccount in the VAA or to the fixed side of the contract. Those
transfers will be limited to three times per contract year. Currently, there is
no charge for those transfers. However, we reserve the right to impose a
charge.

No transfers are allowed from the fixed side of the account to the subaccounts.

Death benefit before the annuity commencement date
You may designate a beneficiary during your lifetime and change the beneficiary
by filing a written request with our home office. Each change of beneficiary
revokes any previous designation. We reserve the right to request that you send
us the contract for endorsement of a change of beneficiary.

Upon the death of the contractowner, a death benefit will be paid to the
beneficiary. Upon the death of a joint owner, the death benefit will be paid to
the surviving joint owner. Upon the death of an annuitant who is not the
contractowner or joint owner, a death benefit may be paid to the contractowner
(and joint owner, if applicable, in equal shares). If the contractowner is a
corporation or other non-individual (non-natural person), the death of the
annuitant will be treated as death of the contractowner.

If the death occurs before the annuity commencement date, the death benefit
paid will depend on the death benefit option in effect on the day on which we
approve payment of the claim. Four death benefit options are available:

Account Value death benefit option: The death benefit is equal at all times to
the account value on the date on which the death claim is approved by us for
payment.

Return of Premium death benefit option: The death benefit is equal to the
greater of the account value on the date on which the death claim is approved
by us for payment or the sum of all purchase payments minus withdrawals,
partial annuitizations, and premium tax incurred.

Annual Step-Up death benefit option: The death benefit is equal to the greatest
of three amounts:

a) the account value on the date on which the death claim is approved by us for
payment;

b) the sum of all purchase payments minus withdrawals, partial annuitizations,
and premium tax incurred; or

c) the highest account value on any contract anniversary prior to the 81st
birthday of the deceased, increased by purchase payments and decreased by
partial withdrawals, partial annuitizations, and premium tax incurred
subsequent to the contract anniversary on which the highest account value is
obtained.

5% Step-Up death benefit option: The death benefit is equal to the greatest of
four amounts:

a) the account value on the date on which the death claim is approved by us for
payment,

b) the sum of all purchase payments minus withdrawals, partial annuitizations,
and premium tax incurred;

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d) the accumulation of all purchase payments minus the accumulation of all
withdrawals, partial annuitizations and premium tax; where each purchase
payment, withdrawal, partial annuitization and premium tax will be
accumulated daily at an annual rate of 5% from the date of the purchase
payment, withdrawal, partial annuitization and premium tax until the earlier
of the date of death of the deceased (owner, joint owner or annuitant) or
the contract date anniversary immediately preceding the 81st birthday of the
deceased (owner, joint owner, or annuitant) except that the accumulation of
any purchase payment, withdrawal, partial annuitization and premium tax will
not exceed 200% of that purchase payment, withdrawal, partial annuitization
and premium tax.

If there are joint owners, upon the death of the first contractowner, Lincoln
Life will pay a death benefit to the surviving joint owner. The surviving joint
owner will be treated as the primary, designated beneficiary. Any other
beneficiary designation on record at the time of death will be treated as a
contingent beneficiary. If the surviving joint owner is the spouse of the
deceased joint owner he/she may continue the contract as a sole contractowner.
Upon the death of the spouse who continues the contract, Lincoln Life will pay
a death benefit to the designated beneficiary(s).

If the beneficiary is the spouse of the contractowner, then the spouse may
elect to continue the contract as contractowner.

Upon the death of a contractowner, joint owner or annuitant, if the surviving
spouse continues the contract, any portion of the death benefit that would have
been payable (if the contract had not been continued) that exceeds the current
contract value will be credited to the contract. This provision applies only
one time for each contract.

If an annuitant who is not the contractowner or a joint owner dies, then the
contingent annuitant, if named, becomes the annuitant and no death benefit is
payable on the death of the annuitant. If no contingent annuitant is named, the
contractowner (or younger of joint owners) becomes the annuitant.
Alternatively, a death benefit may be paid to the contractowner (and joint
owner, if applicable, in equal shares) upon the death of the annuitant.
Notification of the election of this death benefit must be received by us
within 75 days of the death of the annuitant. If no contractowner is living on
the date of death of the annuitant, the death benefit will be available to the
beneficiary. The contract terminates when any death benefit is paid due to the
death of the annuitant. If the annuitant has been changed subsequent to the
effective date of this contract, unless the change occurred because of the
death of a prior annuitant, the death benefit option in effect will be
terminated and the Account Value death benefit option will become effective as
of the valuation date that the written notification to change the annuitant was
received in the home office.

The value of the death benefit will be determined as of the date on which the
death claim is approved for payment. This payment will occur upon receipt of:
(1) proof (e.g. an original certified death certificate), or any other proof of
death satisfactory to us, of the death; (2) written authorization for payment;
and (3) our receipt of all required claim forms, fully completed. If the
beneficiary is a minor, court documents appointing the guardian/custodian must
be submitted.

When applying for a contract, an applicant may request one of the four death
benefit options available. If no death benefit option is chosen, the Return of
Premium death benefit option will be the death benefit as of the contract date.

After a contract is issued, the contractowner may substitute a lower level
death benefit option for the option currently in effect. For purposes of
determining allowable substitutions, Account Value is the lowest level of death
benefit. Return of Premium is the next highest option, followed by Annual Step-
Up, with 5% Step-Up being the highest level of death benefit. A request for
substitution must be in writing on a form acceptable to us. The current death
benefit option will be discontinued and the new death benefit option will begin
as of the valuation date we receive the substitution request, and we will stop
deducting the charge for the current option and begin deducting the charge for
the new option as of that same date. A death benefit option may be substituted
for the current death benefit option only if the new option provides a lower
level of death benefit. See Charges and deductions.

Unless otherwise provided in the beneficiary designation, one of the following
procedures will take place on the death of a beneficiary:

(1) If any beneficiary dies before the contractowner, that beneficiary's
interest will go to any other beneficiaries named, according to their
respective interest; or

(2) If no beneficiary survives the contractowner, the proceeds will be paid to
the contractowner's estate.

Unless the contractowner has already selected a settlement option, the
beneficiary may choose the method of payment of the death benefit. The death
benefit payable to the beneficiary or joint owner must be distributed within
five years of the contractowner's date of death unless the beneficiary begins
receiving within one year of the contractowner's death the distribution in the
form of a life annuity or an annuity for a designated period not extending
beyond the beneficiary's life expectancy.

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The death benefit payable on the death of the annuitant will be distributed in
either a lump sum or under an annuity payout. The annuity payout must be
selected within 60 days after we have approved the death claim.

If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by us of the claim, subject to the laws, regulations and tax
code governing payment of death benefits. This payment may be postponed as
permitted by the Investment Company Act of 1940.

Joint ownership
Joint owners shall be treated as having equal undivided interests in the
contract. Either owner, independently of the other, may exercise ownership
rights in this contract.

Surrenders and withdrawals
Before the annuity commencement date, we will allow the surrender of the
contract or a withdrawal of the account value upon your written request,
subject to the rules discussed below. The surrender/withdrawal option is not
available after the annuity commencement date.

The amount available upon the surrender/withdrawal is the account value less
any applicable fees and taxes at the end of the valuation period during which
the written request for surrender/withdrawal is received at the home office.
Unless a request for withdrawal specifies otherwise, withdrawals will be made
from all subaccounts within the VAA in the same proportion that the amount of
withdrawal bears to the total account value. Unless prohibited,
surrender/withdrawal payments will be mailed within seven days after we receive
a valid written request at the home office. The payment may be postponed as
permitted by the 1940 Act.

The minimum withdrawal is $300. Lincoln Life reserves the right to surrender
this contract if any withdrawal reduces the total account value to a level at
which this contract may be surrendered in accordance with applicable law for
individual deferred annuities.

The tax consequences of a surrender/withdrawal are discussed later, in this
booklet. See Federal tax matters.

Delay of payments
Contract proceeds from the VAA will be paid within seven days, except (i) when
the NYSE is closed (other than weekends and holidays); (ii) times when the
market trading is restricted or the SEC declares an emergency, and we cannot
value units or the funds cannot redeem shares; or (iii) when the SEC so orders
to protect contractowners.

Amendment of contract
We reserve the right to amend the contract to meet the requirements of the 1940
Act or other applicable federal or state laws or regulations. You will be
notified in writing of any changes, modifications or waivers.

Commissions
The commissions paid to dealers are a maximum of 1% account value annually.
Upon annuitization, an annual continuing commission of up to 1.00% of statutory
reserves can be paid to dealers. These commissions are not deducted from
purchase payments or account value; they are paid by us. In the future,
additional sales incentives may be provided to dealers.

Ownership
As contractowner, you have all rights under the contract. According to Indiana
law, the assets of the VAA are held for the exclusive benefit of all
contractowners and their designated beneficiaries; and the assets of the VAA
are not chargeable with liabilities arising from any other business that we may
conduct. Qualified contracts may not be assigned or transferred. Nonqualified
contracts may not be collaterally assigned. We assume no responsibility for the
validity or affect of any assignment. Consult your tax adviser about the tax
consequence of an assignment.

Contractowner questions
The obligations to purchasers under the contracts are those of Lincoln Life.
Questions about your contract should be directed to us at 1-800-338-0355.

Annuity payouts
When you apply for a contract, you may select any annuity commencement date
permitted by state insurance or tax law.

The contract provides optional forms of payouts of annuities (annuity options),
each of which is payable on a variable basis, fixed basis or a combination of
both as you specify. The contract provides that all or part of the account
value may be used to purchase an annuity.

You may elect annuity payouts in monthly, quarterly, semiannual or annual
installments. If the payouts from any subaccount would be or become less than
$50, we have the right to reduce their frequency until the payouts are at least
$50 each. Following are explanations of the annuity options available.

Annuity options
Life Annuity. This option offers a periodic payout during the lifetime of the
annuitant and ends with the last payout before the death of the annuitant. This
option offers the highest periodic payout since there is no guarantee of a
minimum number of payouts or provision for a death benefit for beneficiaries.
However, there is the risk under this option that the recipient would receive
no payouts if the annuitant dies before the date set for the first

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payout; only one payout if death occurs before the second scheduled payout, and
so on.

Life Income with Payouts Guaranteed for Designated Period. This option
guarantees periodic payouts during a designated period, usually 10 or 20 years,
and then continues throughout the lifetime of the annuitant. The designated
period is selected by the contractowner.

Joint Life Annuity. This option offers a periodic payout during the joint
lifetime of the annuitant and a designated joint annuitant. The payouts
continue during the lifetime of the survivor.

Joint Life Annuity with Guaranteed Period. This option guarantees periodic
payouts during a designated period, usually 10 or 20 years, and continues
during the joint lifetime of the annuitant and a designated joint annuitant.
The payouts continue during the lifetime of the survivor. The designated period
is elected by the contractowner.

Joint and Two-Thirds Survivor Annuity. This option provides a periodic payout
during the joint lifetime of the annuitant and a designated joint annuitant.
When one of the joint annuitants dies, the survivor receives two-thirds of the
periodic payout made when both were alive.

Unit Refund Life Annuity. This option offers a periodic payout during the
lifetime of the annuitant with the guarantee that upon death a payout will be
made of the value of the number of annuity units (see Variable annuity payouts)
equal to the excess, if any, of: (a) the total amount applied under this option
divided by the annuity unit value for the date payouts begin, minus (b) the
annuity units represented by each payout to the annuitant multiplied by the
number of payouts paid before death. The value of the number of annuity units
is computed on the date the death claim is approved for payment by the home
office.

General information
Under the options listed above, you may not make withdrawals. Other options,
with or without withdrawal features, may be made available by us. You may pre-
select an annuity payout option as a method of paying the death benefit to a
beneficiary. If you do, the beneficiary cannot change this payout option. At
death, options are only available to the extent they are consistent with the
requirements of the contract as well as Sections 72(s) and 401(a)(9) of the tax
code, if applicable. The mortality and expense risk charge of 1.20% and the
charge for administrative services of .15% will be assessed on all variable
annuity payouts, including options that may be offered that do not have a life
contingency and therefore no mortality risk.

The annuity commencement date is usually on or before the contractowner's 90th
birthday. You may change the annuity commencement date, change the annuity
option or change the allocation of the investment among subaccounts up to 30
days before the scheduled annuity commencement date, upon written notice to the
home office. You must give us at least 30 days notice before the date on which
you want payouts to begin. If proceeds become available to a beneficiary in a
lump sum, the beneficiary may choose any annuity payout option.

Unless you select another option, the contract automatically provides for a
life annuity with annuity payouts guaranteed for 10 years (on a fixed, variable
or combination fixed and variable basis, in proportion to the account
allocations at the time of annuitization) except when a joint life payout is
required by law. Under any option providing for guaranteed period payouts, the
number of payouts which remain unpaid at the date of the annuitant's death (or
surviving annuitant's death in case of joint life annuity) will be paid to you,
if living, otherwise to your beneficiary as payouts become due.

Variable annuity payouts
Variable annuity payouts will be determined using:
1. The account value on the annuity commencement date less any applicable
premium taxes;

2. The annuity tables contained in the contract;

3. The annuity option selected; and

4. The investment performance of the fund(s) selected.

To determine the amount of payouts, we make this calculation:

1. Determine the dollar amount of the first periodic payout; then

2. Credit the contract with a fixed number of annuity units equal to the first
periodic payout divided by the annuity unit value; and

3. Calculate the value of the annuity units each period thereafter.

Annuity payouts assume an investment return of 3%, 4%, 5% or 6% per year, as
applied to the applicable mortality table. The higher the assumed interest rate
you choose, the higher your initial annuity payment will be. The amount of each
payout after the initial payout will depend upon how the underlying fund(s)
perform, relative to the assumed rate. If the actual net investment rate
(annualized) exceeds the assumed rate, the payment will increase at a rate
proportional to the amount of such excess. Conversely, if the actual rate is
less than the assumed rate, annuity payouts will decrease. The higher the
assumed interest rate, the less likely future annuity payments are to increase,
or the payments will increase more slowly than if a lower assumed rate was
used. There is a more complete explanation of this calculation in the SAI.

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Federal tax matters

Introduction
The Federal income tax treatment of the contract 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 contract. This discussion also does not
address other Federal tax consequences, or state or local tax consequences,
associated with the contract. As a result, you should always consult a tax
adviser about the application of tax rules to your individual situation.

Taxation of nonqualified annuities
This part of the discussion describes some of the Federal income tax rules
applicable to nonqualified annuities. A nonqualified annuity is a contract not
issued in connection with a qualified retirement plan receiving special tax
treatment under the tax code, such as an IRA or a section 403(b) plan.

Tax deferral on earnings
The Federal income tax law generally does not tax any increase in your account
value until you receive a contract distribution. However, for this general rule
to apply, certain requirements must be satisfied:

. An individual must own the contract (or the tax law must treat the contract
as owned by the individual).

. The investments of the VAA must be "adequately diversified" in accordance
with IRS regulations.

. Your right to choose particular investments for a contract must be limited.

. The annuity commencement date must not occur near the end of the annuitant's
life expectancy.

Contracts not owned by the individual
If a contract is owned by an entity (rather than an individual) the tax code
generally does not treat it as an annuity contract for Federal income tax
purposes. This means that the entity owning the contract pays tax currently on
the excess of the account value over the purchase payments for the contract.
Examples of contracts where the owner pays current tax on the contract's
earnings are contracts issued to a corporation or a trust. Exceptions to this
rule exist. For example, the tax code treats a contract as owned by an
individual if the named owner is a trust or other entity that holds the
contract as an agent for an individual. However, this exception does not apply
in the case of any employer that owns a contract to provide deferred
compensation for its employees.

Investments in the VAA must be diversified
For a contact to be treated as an annuity for Federal income tax purposes, the
investments of the VAA must be "adequately diversified." IRS regulations define
standards for determining whether the investments of the VAA are adequately
diversified. If the VAA fails to comply with these diversification standards,
you could be required to pay tax currently on the excess of the account value
over the contract purchase payments. Although we do not control the investments
of the underlying investment options, we expect that the underlying investment
options will comply with the IRS regulations so that the VAA will be considered
"adequately diversified."

Restrictions
Federal income tax law limits your right to choose particular investments for
the contract. Because the IRS has not issued guidance specifying those limits,
the limits are uncertain and your right to allocate account value among
subaccounts may exceed those limits. If so, you would be treated as the owner
of the assets of the VAA 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 contracts. We reserve the right to modify the contract without your
consent to try to prevent the tax law from considering you as the owner of the
assets of the VAA.

Age at which annuity payouts begin
Federal income tax rules do not expressly identify a particular age by which
annuity payouts must begin. However, those rules do require that an annuity
contract provide for amortization, through annuity payouts, of the contract's
purchase payments and earnings. If annuity payouts under the contract begin or
are scheduled to begin on a date past the annuitant's 85th birthday, it is
possible that the tax law will not treat the contract as an annuity for Federal
income tax purposes. In that event, you would be currently taxed on the excess
of the account value over the purchase payments of the contract.

Tax treatment of payments
We make no guarantees regarding the tax treatment of any contract or of any
transaction involving a contract. However, the rest of this discussion assumes
that your contract will be treated as an annuity for Federal income tax
purposes and that the tax law will not tax any increase in your account value
until there is a distribution from your contract.

Taxation of withdrawals and surrenders
You will pay tax on withdrawals to the extent your account value exceeds your
purchase payments in the contract. This income (and all other income from your
contract) is considered ordinary income. A higher rate of tax is paid on
ordinary income than on capital gains. You will pay tax on a surrender to the
extent the amount you receive exceeds your purchase payments. In

16
<PAGE>

certain circumstances, your purchase payments are reduced by amounts received
from your contract that were not included in income.

Taxation of annuity payouts
The tax code imposes tax on a portion of each annuity payout (at ordinary tax
rates) and treats a portion as a nontaxable return of your purchase payments in
the contract. We will notify you annually of the taxable amount of your annuity
payout. Once you have recovered the total amount of the purchase payment in the
contract, you will pay tax on the full amount of your annuity payouts. If
annuity payouts end because of the annuitant's death and before the total
amount of the purchase payments in the contract has been received, the amount
not received generally will be deductible.

Taxation of death benefits
We may distribute amounts from your contract because of the death of a
contractowner or an annuitant. The tax treatment of these amounts depends on
whether you or the annuitant dies before or after the annuity commencement
date.

. Death prior to the annuity commencement date--

. If the beneficiary receives death benefits under an annuity payout option,
they are taxed in the same manner as annuity payouts.

. If the beneficiary does not receive death benefits under an annuity payout
option, they are taxed in the same manner as withdrawal.

. Death after the annuity commencement date--

. If death benefits are received in accordance with the existing annuity
payout option, they are excludible from income if they do not exceed the
purchase payments not yet distributed from the contract. All annuity
payouts in excess of the purchase payments not previously received are
includable in income.

. If death benefits are received in a lump sum, the tax law imposes tax on
the amount of death benefits which exceeds the amount of purchase payments
not previously received.

Penalty taxes payable on withdrawals, surrenders, or annuity payouts
The tax code may impose a 10% penalty tax on any distribution from your
contract 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, surrenders or annuity payouts that:

. you receive on or after you reach age 59 1/2,

. you receive because you became disabled (as defined in the tax law),

. a beneficiary receives on or after your death, or

. you receive as a series of substantially equal periodic payments for life (or
life expectancy).

Special rules if you own more than one annuity contract
In certain circumstances, you must combine some or all of the nonqualified
annuity contracts you own in order to determine the amount of an annuity
payout, a surrender or a withdrawal that you must include in income. For
example, if you purchase two or more deferred annuity contracts from the same
life insurance company (or its affiliates) during any calendar year, the tax
code treats all such contracts as one contract. Treating two or more contracts
as one contract could affect the amount of a surrender, withdrawal or an
annuity payout that you must include in income and the amount that might be
subject to the penalty tax described above.

Loans and assignments
Except for certain qualified contracts, the tax code treats any amount received
as a loan under a contract, and any assignments or pledge (or agreement to
assign or pledge) any portion of your account value, as withdrawal of such
amount or portion.

Gifting a contract
If you transfer ownership of your contract to a person other than your spouse
(or to your former spouse incident to divorce), and receive a payment less than
your account's value, you will pay tax on your account value to the extent it
exceeds your purchase payments not previously received. The new owner's
purchase payments in the contract would then be increased to reflect the amount
included in income.

Charges for a contract's death benefit
Your contract may have a death benefit, for which you may pay an annual charge,
computed daily. It is possible that the tax law may treat all or a portion of
the death benefit charge as a contract withdrawal.

Loss of income deduction
After June 8, 1997, if a contract is issued to a taxpayer that is not an
individual, or if a contract is held for the benefit of an entity, the entity
will lose a portion of its deduction for otherwise deductible interest
expenses. This disallowance does not apply if you pay tax on the annual
increase in the account value. Entities that are considering purchasing a
contract, or entities that will benefit from someone else's ownership of a
contract, should consult a tax adviser.

Qualified retirement plans
We also designed the contracts for use in connection with certain types of
retirement plans that receive favorable treatment under the tax code. Contracts
issued to or in connection with a qualified retirement plan are called
"qualified contracts." We issue contracts

17
<PAGE>

for use with different types of qualified plans. The Federal income tax rules
applicable to those plans are complex and varied. As a result, this Prospectus
does not attempt to provide more than general information about use of the
contract with various types of qualified plans. Persons planning to use the
contract in connection with a qualified plan should obtain advice from a
competent tax adviser.

Types of qualified contracts and terms of contracts
Currently, we may issue contracts in connection with the following types of
qualified plans:

. Individual Retirement Accounts and Annuities ("Traditional IRAs")

. Roth IRAs

. Savings Incentive Matched Plan for Employees ("SIMPLE 401(k) plans")

. Public School system and tax-exempt organization annuity plans ("403(b)
plans")

. Qualified corporate employee pension and profit sharing plans ("401(a)
plans") and qualified annuity plans ("403(a) plans")

. Self-employed individual plans ("H.R. 10 plans" or "Keogh Plans")

. Deferred compensation plans of state and local governments and tax-exempt
organizations ("457 plans").

We will amend contracts to be used with a qualified plan as generally necessary
to conform to tax law requirements for the type of plan. However, the rights of
a person to any qualified plan benefits may be subject to the plan's terms and
conditions, regardless of the contract's terms and conditions. In addition, we
are not bound by the terms and conditions of qualified plans to the extent such
terms and conditions contradict the contract, unless we consent.

Tax treatment of qualified contracts
The Federal income tax rules applicable to qualified plans and qualified
contracts vary with the type of plan and contract. For example,

. Under most qualified plans, e.g., 403(b) plans and Traditional IRAs, the
annuitant must begin receiving payments from the contract in certain minimum
amounts by a certain age, typically age 70 1/2. However, these "minimum
distribution rules" do not apply to a Roth IRA.

. Loans are allowed under certain types of qualified plans, but Federal income
tax rules prohibit loans under other types of qualified plans. For example,
Federal income tax rules permit loans under some section 403(b) plans, but
prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject
to a variety of limitations, including restrictions as to the loan amount,
the loan's duration, and the manner of repayment. Your contract or plan may
or may not permit loans.

Tax treatment of payments
Federal income tax rules generally include distributions from a qualified
contract in the recipient's income as ordinary income. These taxable
distributions will include purchase payments that were deductible or excludible
from income. Thus, under many qualified contracts the total amount received is
included in income since a deduction or exclusion from income was taken for
purchase payments. There are exceptions. For example, you do not include
amounts received from a Roth IRA in income if certain conditions are satisfied.

Failure to comply with the minimum distribution rules applicable to certain
qualified plans, such as Traditional IRAs, will result in the imposition of an
excise tax. This excise tax generally equals 50% of the amount by which a
minimum required distribution exceeds the actual distribution from the
qualified plan.

Federal penalty taxes payable on distributions
The tax code may impose a 10% penalty tax on the amount received from the
qualified contract that must be included in income. The tax code does not
impose the penalty tax if one of several exceptions applies. The exceptions
vary depending on the type of qualified contract you purchase. For example, in
the case of an IRA, exceptions provide that the penalty tax does not apply to a
withdrawal, surrender or annuity payout:

. received on or after the annuitant reaches age 59 1/2,

. received on or after the annuitant's death or because of the annuitant's
disability (as defined in the tax law),

. received as a series of substantially equal periodic payments for the
annuitant's life (or life expectancy), or

. received as reimbursement for certain amounts paid for medical care.

These exceptions, as well as certain others not described here, generally apply
to taxable distributions from other qualified plans. However, the specific
requirements of the exception may vary.

Transfers and direct rollovers
In many circumstances, money may be moved between qualified contracts and
qualified plans by means of a

18
<PAGE>

rollover or transfer. Special rules apply to such rollovers and transfers. If
the applicable rules are not followed, you may suffer adverse Federal income
tax consequences, including paying taxes which might not otherwise have had to
be paid. A qualified adviser should always be consulted before you move or
attempt to move funds between any qualified plan or contract and another
qualified plan or contract.

The direct rollover rules apply to certain payments (called "eligible rollover
distributions") from section 401(a) plans, section 403(a) or (b) plans, H.R. 10
plans and contracts used in connection with these types of plans. (The direct
rollover rules do not apply to distributions from IRAs or section 457 plans.)
The direct rollover rules require that we withhold Federal income tax equal to
20% of the eligible rollover distribution from the distribution amount, unless
you elect to have the amount directly transferred to certain qualified plans or
contracts. Before we send a rollover distribution, we will provide the
recipient with a notice explaining these requirements and how the 20%
withholding can be avoided by electing a direct rollover.

The death benefit and IRAs
Pursuant to IRS regulations, IRAs may not invest in life insurance contracts.
We do not believe that these regulations prohibit the death benefit from being
provided under the contracts when we issue the contract as Traditional IRAs or
Roth IRAs. However, the law is unclear and it is possible that the presence of
the death benefit under a contract issued as a Traditional IRA or Roth IRA
could result in increased taxes to you.

Federal income tax withholding
We will withhold and remit to the IRS a part of the taxable portion of each
distribution made under a contract unless the distributee notifies us at or
before the time of the distribution that tax is not to be withheld. In certain
circumstances, Federal income tax rules may require us to withhold tax. At the
time a withdrawal, surrender or annuity payout is requested, we will give the
recipient an explanation of the withholding requirements.

Tax status of Lincoln Life
Under existing Federal income tax laws, Lincoln Life does not pay tax on
investment income and realized capital gains of the VAA. Lincoln Life does not
expect that it will incur any Federal income tax liability on the income and
gains earned by the VAA. 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 VAA, we may impose a charge against
the VAA to pay the taxes.

Changes in law
The above discussion is based on the tax 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.

Voting rights

As required by law, we will vote the trust shares held in the VAA at meetings
of the shareholders of the trust. The voting will be done according to the
instructions of contractowners who have interests in the subaccounts which
invest in classes of funds of the trust. If the 1940 Act or any regulation
under it should be amended or if present interpretations should be amended or
if present interpretations should change, and if as a result we determine that
we are permitted to vote the trust shares in our own right, we may elect to do
so.

The number of votes which you have the right to cast will be determined by
applying your percentage interest in a subaccount to the total number of votes
attributable to the subaccount. In determining the number of votes, fractional
shares will be recognized.

Trust shares of a class held in a subaccount for which no timely instructions
are received will be voted by us in proportion to the voting instructions which
are received for all contracts participating in that subaccount. Voting
instructions to abstain on any item to be voted on will be applied on a pro-
rata basis to reduce the number of votes eligible to be cast.

Whenever a shareholders meeting is called, each person having a voting interest
in a subaccount will receive proxy voting material, reports and other materials
relating to the trust. Since the trust engages in shared funding, other persons
or entities besides Lincoln Life may vote trust shares. See Investments of the
variable annuity account--Sale of fund shares.

Distribution of the contracts

Lincoln Life is the distributor and principal underwriter of the contracts.
Under an agreement with Lincoln Life, SEI Investment Distribution Co. (SEI)
will assist Lincoln Life in forming the selling group. SEI will also perform
certain functions in support of the selling group. The contracts will be sold
by properly licensed registered representatives of independent broker-dealers
which in turn have selling agreements with Lincoln Life and have been licensed
by state insurance departments to represent us. Lincoln Life will offer the
contracts in all states it is licensed to do business.

Return privilege

Within the free-look period after you receive the contract, you may cancel it
for any reason by delivering or mailing it postage prepaid, to the home

19
<PAGE>

office at P.O. Box 7878, 1300 South Clinton Street, Fort Wayne, Indiana, 46801.
A contract canceled under this provision will be void. With respect to the VAA,
except as explained in the following paragraph, we will return the account
value as of the date of receipt of the cancellation, plus any premium taxes
which had been deducted. A purchaser who participates in the VAA is subject to
the risk of a market loss during the free-look period.

For contracts written in those states whose laws require that we assume this
market risk during the free-look period, a contract may be canceled, subject to
the conditions explained before, except that we will return only the purchase
payment(s).

State regulation

As a life insurance company organized and operated under Indiana law, we are
subject to provisions governing life insurers and to regulation by the Indiana
Commissioner of Insurance.

Our books and accounts are subject to review and examination by the Indiana
Insurance Department at all times. A full examination of our operations is
conducted by that Department at least every five years.

Records and reports

As presently required by the 1940 Act and applicable regulations, we are
responsible for maintaining all records and accounts relating to the VAA. We
have entered into an agreement with the Delaware Management Company, 2005
Market Street, Philadelphia, PA, 19203, to provide accounting services to the
VAA. We will mail to you, at your last known address of record at the home
office, at least semiannually after the first contract year, reports containing
information required that Act or any other applicable law or regulation.

Other information

A Registration Statement has been filed with the SEC, under the Securities Act
of 1933 as amended, for the contracts being offered here. This Prospectus does
not contain all the information in the Registration Statement, its amendments
and exhibits. Please refer to the Registration Statement for further
information about the VAA, Lincoln Life and the contracts offered. Statements
in this Prospectus about the content of contracts and other legal instruments
are summaries. For the complete text of those contracts and instruments, please
refer to those documents as filed with the SEC.

We are a member of the Insurance Marketplace Standards Association ("IMSA") and
may include the IMSA logo and information about IMSA membership in our
advertisements. Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and services for individually
sold life insurance and annuities.

The fund may also offer shares of the funds to other segregated investment
accounts.

Legal proceedings
Lincoln Life is involved in various pending or threatened legal proceedings
arising from the conduct of its business. Most of those proceedings are routine
and in the ordinary course of business. In some instances they include claims
for unspecified or substantial punitive damages and similar types of relief in
addition to amounts for equitable relief. After consultation with legal counsel
and a review of available facts, it is management's opinion that the ultimate
liability, if any, under these suits will not have a material adverse effect on
the financial position of Lincoln Life.

With the recent filing of a lawsuit alleging fraud in the sale of interest-
sensitive universal and whole life policies, Lincoln Life now has three such
actions pending. As of the date of this Prospectus, the courts have not
certified a class in any of the suits. In each of these lawsuits, plaintiffs
seek unspecified damages and penalties for themselves and on behalf of the
putative class. Although the relief sought in these cases is substantial, the
cases are in the discovery stages of litigation, and it is premature to make
assessments about potential loss, if any. Management is defending these suits
vigorously. The amount of liability, if any, which may arise as a result of
these lawsuits cannot be reasonably estimated at this time. In a fourth
lawsuit, a settlement has been preliminarily approved by the court, and a class
has been conditionally certified for settlement purposes. Two similar lawsuits
were previously resolved and dismissed.
20
<PAGE>

Statement of additional
information table of
contents for Variable Annuity Account T SEI Variable Annuity

<TABLE>
<CAPTION>
Item
-----------------------------------------
<S> <C>
General information and history of
Lincoln Life B-2
-----------------------------------------
Special terms B-2
-----------------------------------------
Services B-2
-----------------------------------------
Principal underwriter B-2
-----------------------------------------
Purchase of securities being offered B-2
-----------------------------------------
</TABLE>

For a free copy of the SAI please see page one of this booklet.

<TABLE>
<CAPTION>
Item
--------------------------------------
<S> <C>
Calculation of investment results
B-2
--------------------------------------
Annuity payouts B-4
--------------------------------------
Advertising and sales literature B-4
--------------------------------------
Financial statements B-6
--------------------------------------
</TABLE>

21
<PAGE>

The Lincoln National Life Insurance Company
Attn: SEI Customer Service
P. O. Box 7878
Fort Wayne, IN 46801
7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7
PLACE
STAMP
HERE
POSTAL SERVICES
WILL NOT
DELIVER
UNLESS STAMPED

<PAGE>

7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7
STATEMENT OF ADDITIONAL INFORMATION REQUEST CARD
SEI VARIABLE ANNUITY
(LINCOLN LIFE VARIABLE ANNUITY ACCOUNT T)

Please send me a copy of the current Statement of Additional Information
for SEI VARIABLE ANNUITY. (Please print)

Name: ____________________________________________________________________

Address: _________________________________________________________________

City: ______________________________________________________ State: Zip:

C-Share
<PAGE>

SEI Variable Annuity
Lincoln Life
Variable Annuity Account T (Registrant)

The Lincoln National
Life Insurance Company (Depositor)

Statement of Additional Information (SAI)

This Statement of Additional Information should be read in conjunction with the
Prospectus of Lincoln Life Variable Annuity Account T dated June 20, 2000.
You may obtain a copy of the SEI Variable Annuity Prospectus on request and
without charge. Please write, The Lincoln National Life Insurance Company, P.O.
Box 7878, Fort Wayne, Indiana 46801 or call 1-800-338-0355.
Table of Contents

<TABLE>
<CAPTION>
Item Page
-----------------------------------------------------
<S> <C>
General information and history of Lincoln Life B-2
-----------------------------------------------------
Special terms B-2
-----------------------------------------------------
Services B-2
-----------------------------------------------------
Principal underwriter B-2
-----------------------------------------------------
Purchase of securities being offered B-2
-----------------------------------------------------
</TABLE>

This SAI is not a Prospectus.

The date of this SAI is June 20, 2000.

<TABLE>
<CAPTION>
Item Page
---------------------------------------
<S> <C>
Calculation of investment results
B-2
---------------------------------------
Annuity payouts B-4
---------------------------------------
Advertising and sales literature B-4
---------------------------------------
Financial statements B-6
---------------------------------------
</TABLE>

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<PAGE>

General information

and history of The Lincoln National Life Insurance Company (Lincoln Life)

The Lincoln National Life Insurance Company (Lincoln Life), organized in 1905,
is an Indiana stock insurance corporation, engaged primarily in the direct
insurance of life insurance contracts and annuities, and is also a
professional reinsurer. Lincoln Life is wholly owned by Lincoln National
Corporation (LNC), a publicly held insurance and financial services holding
company domiciled in Indiana.

Special terms

The special terms used in this SAI are the ones defined in the Prospectus. In
connection with the term, valuation date, the New York Stock Exchange is
currently closed on weekends and on these holidays: New Year's Day, Martin
Luther King's Birthday, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. If any of
these holidays occurs on a weekend day, the Exchange may also be closed on the
business day occurring just before or just after the holiday.

Services

Independent auditors
The statutory-basis financial statements of Lincoln Life appearing in this SAI
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report also appearing elsewhere in this
document and in the Registration Statement. The financial statements audited
by Ernst & Young LLP have been included in this document in reliance on their
report given on their authority as experts in accounting and auditing.

Keeper of records
All accounts, books, records and other documents which are required to be
maintained for the VAA are maintained by Lincoln Life or by third parties
responsible to Lincoln Life. We have entered into an agreement with the
Delaware Management Company, 2005 Market Street, Philadelphia, PA 19203, to
provide accounting services to the VAA. No separate charge against the assets
of the VAA is made by Lincoln Life for this service.

Principal underwriter

Lincoln Life is the principal underwriter for the contracts, which are offered
continuously. SEI Investment Distribution Co. (SEI) will assist Lincoln Life
in forming the selling group. SEI will also perform certain functions in
support of the selling group.

Purchase of securities being offered

The contracts are offered to the public through certain securities
broker/dealers who have entered into selling agreements with Lincoln Life and
whose personnel are legally authorized to sell annuity products.

Both before and after the annuity commencement date, there are exchange
privileges between variable subaccounts, subject to restrictions set out in
the Prospectus. See The contracts, in the Prospectus. No exchanges are
permitted between the VAA and other variable separate accounts.

The offering of the contracts is continuous.

Calculation of investment results

No performance data is included because, as of the date hereof, the VAA and
the funds have not been in operation long enough to provide appropriate
numbers. Nonstandardized performance data will be accompanied by standard
performance data once available.

Once available, the paragraphs set forth below will present performance
information for the VAA and the variable subaccounts calculated in several
different ways. Paragraph (A) will show the historical performance of each
subaccount over the periods indicated. The information that will be presented
in Paragraph (A) is referred to as "standard performance" because it is
calculated in accordance with formulas prescribed by the SEC. The standard
performance of each subaccount will be calculated with each of the death
benefit options. Standard performance is described in Paragraph (B). Under
rules prescribed by the SEC, standard performance must be included in certain
advertising material that discusses the performance of the VAA and the
subaccounts.

Paragraph (C) will show additional "non-standardized" performance information
(i.e., performance information not calculated in accordance with SEC
guidelines) for each of the variable subaccounts that may

B-2
<PAGE>

be used to advertise the performance of the VAA and the variable subaccounts.
THIS INFORMATION DOES NOT INDICATE OR REPRESENT FUTURE PERFORMANCE.

(A) Standard Performance Data as of December 31, XXXX (when available)

(B) Formulas
Average annual total return for each period was 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
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 = 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, 5-year, or 10-year period in question (or fractional portion
thereof)

(C) Other Non-Standardized investment results:
The VAA may illustrate its results over various periods and compare its results
to indices and other variable annuities in sales materials including
advertisements, brochures and reports. Such results may be computed on a
cumulative and/or annualized basis.

Cumulative quotations are arrived at by calculating the change in the
accumulation unit value between the first and last day of the base period being
measured, and expressing the difference as a percentage of the unit value at
the beginning of the base period.

Annualized quotations are arrived at by applying a formula which determines the
level rate of return which, if earned over the entire base period, would
produce the cumulative return.

B-3
<PAGE>

Annuity payouts

Variable annuity payouts
Variable annuity payouts will be determined on the basis of: (1) the dollar
value of the contract on the annuity commencement date; (2) the annuity tables
contained in the contract; (3) the type of annuity option selected; and (4) the
investment results of the fund(s) selected. In order to determine the amount of
variable annuity payouts, Lincoln Life makes the following calculation: first,
it determines the dollar amount of the first payout; second, it credits the
contract with a fixed number of annuity units based on the amount of the first
payout; and third, it calculates the value of the annuity units each period
thereafter. These steps are explained below.

The dollar amount of the first periodic variable annuity payout is determined
by applying the total value of the accumulation units credited under the
contract valued as of the annuity commencement date (less any premium taxes) to
the annuity tables contained in the contract. The first variable annuity payout
will be paid 14 days after the annuity commencement date. This day of the month
will become the day on which all future annuity payouts will be paid. Amounts
shown in the tables are based on the 1983 Table "a" Individual Annuity
Mortality Tables, modified, with an assumed investment return at the rate of
3%, 4%, 5% or 6% per annum. The first annuity payout is determined by
multiplying the benefit per $1,000 of value shown in the contract tables by the
number of thousands of dollars of value accumulated under the contract. These
annuity tables vary according to the form of annuity selected and the age of
the annuitant at the annuity commencement date. The assumed interest rate
described above is the measuring point for subsequent annuity payouts. If the
actual net investment rate (annualized) exceeds the assumed interest rate, the
payout will increase at a rate equal to the amount of such excess. Conversely,
if the actual rate is less than the assumed interest rate, annuity payouts will
decrease. If the assumed interest rate were to be increased, annuity payouts
would start at a higher level but would decrease more rapidly or increase more
slowly.

Lincoln Life may use sex distinct annuity tables in contracts that are not
associated with employer sponsored plans and where not prohibited by law.

At an annuity commencement date, the contract is credited with annuity units
for each variable subaccount on which variable annuity payouts are based. The
number of annuity units to be credited is determined by dividing the amount of
the first periodic payout by the value of an annuity unit in each variable
subaccount selected. Although the number of annuity units is fixed by this
process, the value of such units will vary with the value of the underlying
fund. The amount of the second and subsequent periodic payouts is determined by
multiplying the contractowner's fixed number of annuity units in each variable
subaccount by the appropriate annuity unit value for the valuation date ending
14 days prior to the date that payout is due.

The value of each variable subaccount's annuity unit will be set initially at
$1.00. The annuity unit value for each variable subaccount at the end of any
valuation date is determined as follows:

1. The total value of fund shares held in a given variable subaccount is
calculated by multiplying the number of shares by the net asset value at the
end of the valuation period plus any dividend or other distribution.

2. The liabilities of the variable subaccount, including daily charges and
taxes, are subtracted.

3. The result is divided by the number of annuity units in the variable
subaccount at the beginning of the valuation period, and adjusted by a
factor to neutralize the assumed investment return in the annuity table.

The value of the annuity units is determined as of a valuation date 14 days
prior to the payment date in order to permit calculation of amounts of annuity
payouts and mailing of checks in advance of their due dates. Such checks will
normally be issued and mailed at least three days before the due date.

Proof of age, sex and survival
Lincoln Life may require proof of age, sex, or survival of any payee upon whose
age, sex, or survival payments depend.

Advertising and sales literature

As set forth in the Prospectus, Lincoln Life may refer to the following
organizations (and others) in its marketing materials:

A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors affecting
the overall performance of an insurance company in order to provide an opinion
as to an insurance company's relative financial strength and ability to meet
its contractual obligations. The procedure includes both a quantitative and
qualitative review of each company. A.M. Best also provides certain rankings,
to which Lincoln Life intends to refer.

DUFF & PHELPS insurance company claims paying ability (CPA) service provides
purchasers of insurance company policies and contracts with analytical and
statistical information on the solvency and liquidity of major U.S. licensed
insurance companies, both mutual and stock.

EAFE INDEX is prepared by Morgan Stanley Capital International (MSCI). It
measures performance of

B-4
<PAGE>

equity securities in Europe, Australia and the Far East. The index reflects the
movements of world stock markets by representing the evolution of an unmanaged
portfolio. The EAFE Index offers international diversification representing
over 1,000 companies across 20 different countries.

LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a publisher
of statistical data covering the investment company industry in the United
States and overseas. Lipper is recognized as the leading source of data on
open-end and closed-end funds. Lipper currently tracks the performance of over
5,000 investment companies and publishes numerous specialized reports,
including reports on performance and portfolio analysis, fee and expense
analysis.

MOODY'S insurance financial strength rating is an opinion of an insurance
company's financial strength and ability to meet financial obligations. The
purpose of Moody's ratings is to provide investors with a simple system of
gradation by which the relative quality of insurance companies may be noted.

MORNINGSTAR is an independent financial publisher offering comprehensive
statistical and analytical coverage of open-end and closed-end funds and
variable annuities.

STANDARD & POOR'S insurance claims-paying ability rating is an opinion of an
operating insurance company's financial capacity to meet obligations under an
insurance policy in accordance with the terms. The likelihood of a timely flow
of funds from the insurer to the trustee for the bondholders is a key element
in the rating determination for such debt issues.

VARDS (VARIABLE ANNUITY RESEARCH AND DATA SERVICE) provides a comprehensive
guide to variable annuity contract features and historical fund performance.
The service also provides a readily understandable analysis of the comparative
characteristics and market performance of funds inclusive in variable
contracts.

STANDARD & POOR'S 500 INDEX is a broad-based measurement of U.S. stock-market
performance based on the weighted average performance of 500 common stocks of
leading companies in leading industries; commonly known as the Standard &
Poor's 500 (S&P 500). The selection of stocks, their relative weightings to
reflect differences in the number of outstanding shares, and publication of the
index itself are services of Standard & Poor's Corporation, a financial
advisory, securities rating, and publishing firm.

NASDAQ-OTC PRICE INDEX is based on the National Association of Securities
Dealers Automated Quotations (NASDAQ) and represents all domestic over-the-
counter stocks except those traded on exchanges and those having only one
market maker, a total of some 3,500 stocks. It is market value- weighted and
was introduced with a base of 100.00 on February 5, 1971.

DOW JONES INDUSTRIAL AVERAGE (DJIA) is a price-weighted average of 30 actively
traded blue chip stocks, primarily industrials currently including American
Express Company and American Telephone and Telegraph Company. Prepared and
published by Dow Jones & Company, it is the oldest and most widely quoted of
all the market indicators. The average is quoted in points, not dollars.

In its advertisements and other sales literature for the VAA and the trust
funds, Lincoln Life intends to illustrate the advantages of the contracts in a
number of ways:

COMPOUND INTEREST ILLUSTRATIONS will emphasize several advantages of the
variable annuity contract. For example, but not by way of illustration, the
literature may emphasize the potential tax savings through tax deferral; the
potential advantage of the variable annuity account over the fixed account; and
the compounding effect when a client makes regular deposits to his or her
contract.

INTERNET is an electronic communications network which may be used to provide
information regarding Lincoln Life, performance of the variable subaccounts and
advertisement literature.

DOLLAR-COST AVERAGING (DCA) may be used by you to systematically transfer on a
monthly basis amounts from the SEI VP Prime Obligation subaccount into the
other variable subaccounts. We reserve the right to change subaccounts under
this program. You may elect to participate in the DCA program at the time of
application or at anytime before the annuity commencement date by completing an
election form available from us. The minimum amount to be dollar cost averaged
is $1,500 over any period between six and 60 months. Once elected, the program
will remain in effect until the earlier of: (1) the annuity commencement date;
(2) the value of the amount being DCA'd is depleted; or (3) you cancel the
program by written request or by telephone if we have your telephone
authorization on file. Currently, there is no charge for this service. However,
we reserve the right to impose one. A transfer under this program is not
considered a transfer for purposes of limiting the number of transfers that may
be made, or assessing any charges which may apply to transfers. We reserve the
right to discontinue this program at any time. DCA does not assure a profit or
protect against loss.

B-5
<PAGE>

sending a written request to our home office. If telephone authorization has
been elected, certain changes may be made by telephone. Notwithstanding the
requirements of the program, any withdrawal must be permitted by Section
401(a)(9) of the code for qualified plans or permitted under Section 72 for
non-qualified contracts. Currently, there is no charge for this service.
However, we reserve the right to impose one. If a charge is imposed, it will
not exceed $25 per transaction or 2% of the amount withdrawn, whichever is
less. We reserve the right to discontinue this service at any time.

CROSS-REINVESTMENT SERVICE allows the account value in a designated variable
subaccount that exceeds a certain baseline amount to automatically be
transferred to another specific variable subaccount(s) at specific intervals.
You may elect to participate in cross-reinvestment at the time of application
or at any time before the annuity commencement date by sending a written
request to our home office or by telephone if we have your telephone
authorization on file. You designate the holding account, the receiving
account(s), and the baseline amount. Cross-reinvestment will continue until we
receive authorization to terminate the program.

The minimum holding account value required to establish cross-reinvestment is
$10,000. Currently, there is no charge for this service. However, we reserve
the right to impose one. A transfer under this program is not considered a
transfer for purposes of limiting the number of transfers that may be made, or
assessing any charges which may apply to transfers. We reserve the right to
discontinue this service at any time.

PORTFOLIO REBALANCING is an option which, if elected by the contractowner, re-
stores to a pre-determined level the percentage of contract value allocated to
each variable account subaccount. This pre-determined level will be the alloca-
tion initially selected when the contract was purchased, unless subsequently
changed. The portfolio rebalancing allocation may be changed at any time by
submitting a request to Lincoln Life.

If portfolio rebalancing is elected, all purchase payments allocated to the
variable account subaccounts must be subject to portfolio rebalancing.

Portfolio rebalancing may take place on either a monthly, quarterly, semi-an-
nual or annual basis, as selected by the contractowner. Once the portfolio
rebalancing option is activated, any variable account subaccount transfers exe-
cuted outside of the portfolio rebalancing option will terminate the portfolio
rebalancing option. Any subsequent purchase payment or withdrawal that modifies
the account balance within each variable account subaccount may also cause ter-
mination of the portfolio rebalancing option. Any such termination will be con-
firmed to the contractowner. The contractowner may terminate the portfolio
rebalancing option or re-enroll at any time by calling or writing Lincoln Life.

The portfolio rebalancing program is not available if you have selected one of
the asset allocation portfolios discussed in the Prospectus, or following the
annuity commencement date. Currently, there is no charge for this service.
However, we reserve the right to impose one.

Lincoln Life's customers. Sales literature for the VAA and the trust's funds
may refer to the number of employers and the number of individual annuity
clients which Lincoln Life serves. As of the date of this SAI, Lincoln Life was
serving over 10,000 employers and more than 1 million individuals.

Lincoln Life's assets, size. Lincoln Life may discuss its general financial
condition (see, for example, the reference to A.M. Best Company, above); it may
refer to its assets; it may also discuss its relative size and/or ranking among
companies in the industry or among any sub-classification of those companies,
based upon recognized evaluation criteria (see reference to A.M. Best Company
above). For example, at year-end 1999 Lincoln Life had statutory admitted
assets of over $70 billion.

Financial statements

The statutory-basis financials statements of Lincoln Life appear on the
following pages. Financial statements for the VAA are not included because, as
of the date hereof, the VAA had no assets, had incurred no liabilities, and had
not yet commenced operations.

B-6
<PAGE>

SEI Variable Annuity
Lincoln Life Variable Annuity Account T
Individual variable annuity contract

Home Office:
Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46801

The minimum initial purchase payment for the contract is $25,000. Additional
purchase payments may be made to the contract and must be at least $100.

This product will only be sold as part of an asset management program made
available by fee based financial planners. The fees and expenses of the asset
management program are separate from and in addition to the fees and expenses
of the annuity contract. You should consult your financial planner for details
regarding the asset management program, including fees and expenses.

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.

June 20, 2000

1
<PAGE>

Table of contents

<TABLE>
<CAPTION>
Page
--------------------------------------------------------------------------------
<S> <C>
Annuity payouts........................................................... 14
--------------------------------------------------------------------------------
Federal tax matters....................................................... 15
--------------------------------------------------------------------------------
Voting rights............................................................. 19
--------------------------------------------------------------------------------
Distribution of the contracts............................................. 19
--------------------------------------------------------------------------------
Return privilege.......................................................... 20
--------------------------------------------------------------------------------
State regulation.......................................................... 20
--------------------------------------------------------------------------------
Records and reports....................................................... 20
--------------------------------------------------------------------------------
Other information......................................................... 20
--------------------------------------------------------------------------------
Statement of additional information table of contents for Variable Annuity
Account T SEI Variable Annuity........................................... 21
</TABLE>
--------------------------------------------------------------------------------

Special terms

2
<PAGE>

Expense tables

Summary of Contractowner expenses:

Annual Account Fee: $40

(See Charges and other deductions).

The account fee will be waived for any contract year if your account value
equals or exceeds $50,000.00.

--------------------------------------------------------------------------------
Account T annual expenses for SEI Variable Annuity subaccounts:*
(as a percentage of average account value)
<TABLE>
<CAPTION>
Death benefit options
----------------------------
Return Annual 5%
Account of Step- Step-
Value Premium Up Up
<S> <C> <C> <C> <C>
Mortality and expense risk charge: .20% .25% .35% .50%
Administrative charge: .15% .15% .15% .15%
---- ---- ---- ----
Total annual charge for each subaccount: .35% .40% .50% .65%
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
The
mortality
and expense
risk charge
is based on
the
particular
death
benefit
option you
choose. (See
Charges and
other
deductions.)
</TABLE>

Annual expenses of the funds:
(as a percentage of each fund's average net assets):

3
<PAGE>

Examples

(expenses of the subaccounts and of the funds):

If you surrender your contract at the end of the time period shown, you would
pay the following expenses on a $1,000 investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
For Account Value Death Benefit:
1. SEI VP Large Cap Growth Fund $16 $49
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 16 49
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 18 56
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 18 56
----------------------------------------------------------
5. SEI VP International Equity Fund 19 59
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 28 82
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 27 80
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 14 43
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 17 51
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 21 63
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 13 40
----------------------------------------------------------
For Return of Premium Death Benefit:
1. SEI VP Large Cap Growth Fund $16 $50
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 16 50
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 19 58
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 19 58
----------------------------------------------------------
5. SEI VP International Equity Fund 20 61
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 28 84
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 27 81
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 15 45
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 17 53
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 21 65
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 14 42
----------------------------------------------------------
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
1 year 3 years
<S> <C> <C>
For Annual Step-Up Death Benefit:
1. SEI VP Large Cap Growth Fund $17 $53
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 17 53
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 20 61
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 20 61
----------------------------------------------------------
5. SEI VP International Equity Fund 21 64
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 29 87
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 28 84
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 16 48
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 18 56
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 22 68
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 15 45
----------------------------------------------------------
For 5% Step-Up Death Benefit:
1. SEI VP Large Cap Growth Fund $19 $58
----------------------------------------------------------
2. SEI VP Large Cap Value Fund 19 58
----------------------------------------------------------
3. SEI VP Small Cap Growth Fund 22 65
----------------------------------------------------------
4. SEI VP Small Cap Value Fund 22 65
----------------------------------------------------------
5. SEI VP International Equity Fund 23 68
----------------------------------------------------------
6. SEI VP Emerging Markets Equity Fund 31 91
----------------------------------------------------------
7. SEI VP Emerging Markets Debt Fund 30 88
----------------------------------------------------------
8. SEI VP Core Fixed Income Fund 17 52
----------------------------------------------------------
9. SEI VP High Yield Bond Fund 20 60
----------------------------------------------------------
10. SEI VP International Fixed Income Fund 24 72
----------------------------------------------------------
11. SEI VP Prime Obligation Fund 16 49
----------------------------------------------------------
</TABLE>
We provide these examples to help you understand the direct and indirect costs
and expenses of the contract. Examples are given for each of the death benefit
options.

5
<PAGE>

Summary

What kind of contract am I buying? It is an individual variable annuity
contract between you and Lincoln Life. See The contracts.

What charges do I pay under the contract? We will deduct any applicable premium
tax from purchase payments or account value at the time the tax is incurred or
at another time we choose.

We apply an annual charge totaling .35%, .40%, .50% or .65% to the daily net
asset value of the VAA depending on the death benefit option chosen. This
charge includes 0.15% as an administrative charge; the balance of the charge is
a mortality and expense risk charge. We charge an account fee of $40 per
contract year if the account value is less than $50,000. See Charges and other
deductions.