LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H, N-4 EL, 1996-12-20

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H
N-4 EL, 1996-12-20

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As filed with the Securities and Exchange Commission on December 20, 1996
Registration No.:
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]

AMENDMENT NO. 10 [X]

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H
(Exact Name of Registrant)

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
(Name of Depositor)

1300 South Clinton Street
Post Office Box 1110
Fort Wayne, Indiana 46801

- --------------------------------------------------------------------------------
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, including Area Code: (219)455-2000

JACK D. HUNTER, ESQ.
200 East Berry Street
Post Office Box 1110
Fort Wayne, Indiana 46802

- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)

Copy to:
Susan S. Krawczyk
Sutherland, Asbill & Brennan, L.L.P.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004

Title of securities being registered:
Interests in a separate account under individual flexible premium deferred
variable annuity contracts.

DECLARATION PURSUANT TO RULE 24f-2

An indefinite amount of securities is being registered under the Securities Act
of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940. A
filing fee of $500 is being paid in connection with this filing.

-------------------

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H

CROSS REFERENCE SHEET
(PURSUANT TO RULE 495 OF REGULATION C
UNDER THE SECURITIES ACT OF 1933)
RELATING TO ITEMS REQUIRED BY FORM N-4

N-4 ITEM CAPTION IN PROSPECTUS (PART A)
- -------- ------------------------------
1. Cover Page

2. Special terms

3. (a) Expense Table
(b) Synopsis
(c) Synopsis
(d) Not Applicable

4. (a) Condensed Financial Information
(b) Condensed Financial Information
(c) Financial Statements

5. (a) Cover Page; The Lincoln National Life Insurance Company
(b) Variable Account; Investments of the Variable Account; Cover Page
(c) Investments of the Variable Account
(d) Cover Page
(e) Voting Rights
(f) Not Applicable

6. (a) Charges and Other Deductions
(b) Charges and Other Deductions
(c) Charges and Other Deductions
(d) The Contracts - Commissions
(e) Charges and Other Deductions
(f) Charges and Other Deductions
(g) Not Applicable

7. (a) The Contracts; Investments of the Variable Account; Annuity
Payments; Voting Rights; Return Privilege
(b) Investments of the Variable Account; The Contracts; Cover Page
(c) The Contracts
(d) The Contracts
<PAGE>

CROSS REFERENCE SHEET TO ITEMS REQUIRED BY FORM N-4

N-4 ITEM CAPTION IN PROSPECTUS (PART A)
- -------- ------------------------------
8. (a) Annuity Payments
(b) Annuity Payments
(c) Annuity Payments
(d) Annuity Payments
(e) Annuity Payments
(f) The Contracts; Annuity Payments

9. (a) The Contracts; Annuity Payments
(b) The Contracts; Annuity Payments

10. (a) The Contracts; Cover Page; Charges and Other Deductions
(b) The Contracts; Investments of the Variable Account
(c) The Contracts
(d) Distribution of the Contracts

11. (a) The Contracts
(b) Restrictions Under the Texas Optional Retirement Program
(c) The Contracts
(d) The Contracts
(e) Return Privilege

12. (a) Federal Tax Status
(b) Cover Page; Federal Tax Status
(c) Federal Tax Status

13. Legal Proceedings

14. Table of Contents to the Statement of Additional
Information (SAI) for Lincoln National Variable
Annuity Account H American Legacy III
<PAGE>

CAPTION IN STATEMENT OF ADDITIONAL
N-4 ITEM INFORMATION (PART B) (continued)
- -------- ----------------------------------

15. Cover Page for Part B

16. Cover Page for Part B

17. (a) Not Applicable
(b) Not Applicable
(c) General Information and History of The Lincoln
National Life Insurance Company (Lincoln Life)

<PAGE>

CROSS REFERENCE SHEET TO ITEMS REQUIRED BY FORM N-4

CAPTION IN STATEMENT OF ADDITIONAL
N-4 ITEM INFORMATION (PART B)
- -------- ----------------------------------
18. (a) Not Applicable
(b) Not Applicable
(c) Services
(d) Not Applicable
(e) Not Applicable
(f) Not Applicable

19. (a) Purchase of Securities Being Offered
(b) Purchase of Securities Being Offered

20. (a) Not Applicable
(b) Underwriters
(c) Not Applicable
(d) Not Applicable

21. Calculation of Investment Results

22. Annuity Payments [See also p. 20 of the Prospectus]

23. (a) Financial Statements -- Lincoln National Variable
Annuity Account H
(b) Financial Statements -- The Lincoln National Life
Insurance Company

<PAGE>

American Legacy III
Lincoln National Variable Annuity Account H
individual variable annuity contracts
issued by:
Lincoln National Life Insurance Co.
1300 South Clinton Street
Fort Wayne, Indiana 46802

This Prospectus describes the individual flexible premium deferred variable
annuity contract (contract or variable annuity contract) issued by The Lincoln
National Life Insurance Company. (Lincoln Life). It is for use with the
following retirement plans qualified for special tax treatment (qualified
plans) under the Internal Revenue Code of 1986, as amended (the code):

1. Public school systems and certain tax-exempt organizations [403(b)];
2. Qualified corporate employee pension and profit-sharing trusts and qualified
annuity plans;
3. Corresponding plans of self-employed individuals (H.R. 10 or Keogh);
4. Individual retirement annuities (IRA);
5. Government deferred compensation plans (457);
6. Simplified employee pension plans (SEP); and
7. Simple 401(k) plans.

Section 403(b) business under number (1.) will normally be accepted only for
purchase payments qualifying as 403(b) lump sum transfers or rollovers.

The contract described in this Prospectus is also offered to plans established
by persons who are not entitled to participate in one of the previously
mentioned plans (nonqualified contracts). A nonqualified contract can be owned
jointly only by spouses.

The contract offers you the accumulation of contract value and payment of
periodic annuity benefits. These benefits may be paid on a variable or fixed
basis or a combination of both. Annuity benefits start at an annuity
commencement date which you select and which must be on or before the
contractowner's 85th birthday. If the contractowner dies before the annuity
commencement date, the greater of the contract value or the enhanced guaranteed
minimum death benefit (EGMDB) will be paid to the beneficiary, if the EGMDB is
then in effect. (See Death benefit before annuity commencement date.) If the
EGMDB is not in effect, the death benefit is the contract value. The EGMDB is
not available under contracts for qualified plans (other than IRAs) or if the
contractowner's issue age is 75 or more.

The minimum initial purchase payment for the contract is:
1. $1,500 for a nonqualified plan and a 403(b) transfer/rollover or
2. $300 for a qualified plan.

The minimum payment to the contract is $100 per payment ($25 if transmitted
electronically), subject to a $300 annual minimum.

All investments (purchase payments) for benefits on a variable basis will be
placed in Lincoln National Variable Annuity Account H (variable annuity account
[VAA]). The VAA is a segregated investment account of Lincoln Life, which is the
depositor. Based upon your instructions, the VAA invests purchase payments (at
net asset value) in [Class II] shares of one or more specified funds of the
American Variable Insurance Series (series): Growth Fund, Growth-Income Fund,
International Fund, [New Fund], Asset Allocation Fund, High-Yield Bond Fund,
Bond Fund, U.S. Government/AAA-Rated Securities Fund, and Cash Management Fund.
Both the value of a contract before the annuity commencement date and the amount
of payouts afterward will depend upon the investment performance of the fund(s)
selected. Investments in these funds are neither insured
<PAGE>

nor guaranteed by the U.S. Government or by any other person or entity.

Purchase payments for benefits on a fixed basis will be placed in the fixed side
of the contract, which is part of our General Account. However, this Prospectus
deals only with those elements of the contracts relating to the VAA, except
where reference to the fixed side is made.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Prospectus details the information regarding the VAA that you should know
before investing. This booklet also includes a current Prospectus of the series.
Both should be read carefully before investing and kept for future reference.

A statement of additional information (SAI), dated ____ __, 1997, concerning the
VAA has been filed with the SEC and is incorporated by this reference into this
Prospectus. If you would like a free copy, complete and mail the enclosed card,
or call 1-800-942-5500, Ext. 2348. A table of contents for the SAI appears on
the last page of this Prospectus.

This Prospectus is dated ____ __, 1997

Table of contents
Page
Special terms .................................................... 3
Expense tables ................................................... 4
Synopsis ......................................................... 6
Condensed Financial Information...................................
Investment results ............................................... 10
Financial statements ............................................. 10
Lincoln National Life Insurance Co. .............................. 10
Variable annuity account (VAA) ................................... 10
Investments of the variable annuity account ...................... 10
Charges and other deductions ..................................... 13
The contracts .................................................... 15
Annuity payouts .................................................. 20
Federal tax status ............................................... 22
Voting rights .................................................... 24
<PAGE>

Distribution of the contracts ............................ 24
Return privilege ......................................... 25
State regulation ......................................... 25
Restrictions under the Texas Optional Retirement Program . 25
Records and reports ...................................... 25
Other information ........................................ 26
Statement of Additional Information table of
contents for Variable Annuity Account H.................. 26

Special terms

(Throughout this Prospectus, in order to make the following documents more
understandable to you, we have italicized the special terms.)

Account or variable annuity account (VAA)--The segregated investment account,
Account H, into which Lincoln Life sets aside and invests the assets for the
variable annuity contract offered in this Prospectus.

Accumulation unit--A measure used to calculate contract value for the variable
side of the contract before the annuity commencement date. See The contracts.

Advisor or investment advisor--Capital Research and Management Co. (CRMC), which
provides investment management services to the series. See Investment advisor.

Annuitant--The person upon whose life the annuity benefit payments made after
the annuity commencement date will be based.

Annuity commencement date--The valuation date when the funds are withdrawn or
converted into annuity units or fixed dollar payout for payment of annuity
benefits under the annuity payment option selected. For purposes of determining
whether an event occurs before or after the annuity commencement date, the
annuity commencement date is deemed to begin at close of business on the
valuation date.

Annuity payment option--An optional form of payment of the annuity provided for
under the contract. See Annuity payouts.

Annuity payout--An amount paid at regular intervals 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. See Annuity payouts.

Beneficiary--The person whom you designate to receive the death benefit, if any,
in case of the contractowner's death.

Cash surrender value--Upon surrender, the contract value less any applicable
charges, fees and taxes.

Code--The Internal Revenue Code of 1986, as amended.

Contract (variable annuity contract)--The agreement between you and us providing
a variable annuity.

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
also the annuitant.

Contract value--At a given time, the total value of all accumulation units for a
contract plus the
<PAGE>

value of the fixed side of the contract.

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. See The contracts.

Depositor--Lincoln National Life Insurance Co.

Enhanced Guaranteed Minimum Death Benefit (EGMDB)--The EGMDB is the greater of:
(1) contract value as of the day on which Lincoln Life approves the payment of a
death benefit claim; or (2) the highest contract value which the contract
attains on any policy anniversary date (including the inception date) on ages,
up to and including, the contractowner's age 75, as adjusted for any purchase
payments, withdrawals, annuitizations or premium taxes made, effected or
deducted, after the date of the highest contract value.

Flexible premium deferred contract--An annuity contract with an initial purchase
payment, allowing additional purchase payments to be made, and with annuity
payouts beginning at a future date.

Fund--Any of the underlying investment options available in the series in which
your purchase payments are invested.

Home office--The headquarters of Lincoln National Life Insurance Co., located at
1300 South Clinton Street, Fort Wayne, Indiana 46802.

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

Purchase payments--Amounts paid into the contract.

Series--American Variable Insurance Series (series), the funds in which purchase
payments are invested.

Statement of additional information (SAI)--A document required by the SEC to be
provided upon request to a prospective purchaser of a contract, you. This free
document gives more information about Lincoln Life, the VAA and the variable
annuity contract.

Subaccount or American Legacy III Subaccount--That 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.

Surrender--A contract right that allows you to terminate your contract and
receive your cash surrender value. See The contracts.

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

Valuation period--The period starting at the close of business on a particular
valuation date and ending at the close of business on the next valuation date.

Withdrawal--A contract right that allows you to obtain a portion of your cash
surrender value.

Expense tables

Contractowner transaction expenses:

. The maximum contingent deferred sales charge

(as a percentage of purchase payments surrendered/withdrawn): 6%

The contingent deferred sales charge percentage is reduced over time. The later
a redemption occurs after a purchase payment is surrendered or withdrawn, the
lower the contingent deferred sales charge with respect to that surrender or
withdrawal. See Contingent deferred sales charges.

(Note: This charge may be waived in certain cases. See Contingent deferred sales
charges.)
<PAGE>

Variable Annuity Account H annual expenses for American Legacy III subaccounts:

(as a percentage of average account value for each subaccount):

<TABLE>
<CAPTION>
For each subaccount*
With EGMDB Without EGMDB
<S> <C> <C>
Mortality and expense risk fees 1.30% 1.15%

Administrative Charge .10% .10%
--------- ---------
Total annual expenses for
American Legacy III Subaccounts 1.40% 1.25%
</TABLE>

Annual expenses of the funds for year ended November 30, 1996:
(as a percentage of each fund's average net assets):

<TABLE>
<CAPTION>
Management 12b-1 Other Total
fees + fees + expenses = expenses
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Growth
- --------------------------------------------------------------------------------------------------
2. International
- --------------------------------------------------------------------------------------------------
3. [New Fund]*
- --------------------------------------------------------------------------------------------------
4. Growth-Income
- --------------------------------------------------------------------------------------------------
5. Asset Allocation
- --------------------------------------------------------------------------------------------------
6. High-Yield Bond
- --------------------------------------------------------------------------------------------------
7. Bond Fund
- --------------------------------------------------------------------------------------------------
8. U.S. Govt./AAA-Rated Securities
- --------------------------------------------------------------------------------------------------
9. Cash Management
- --------------------------------------------------------------------------------------------------
</TABLE>

*The VAA is divided into separately-named subaccounts, nine of which are
available under the contracts. Each subaccount, in turn, invests purchase
payments in shares of a class of its respective fund.

Examples

(reflecting expenses both of the American Legacy III subaccounts and of the
funds)

If you surrender your contract at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming a 5% annual
return:

With EGMDB
<TABLE>
<CAPTION>
1 year 3 years
- -----------------------------------------------
<S> <C> <C>
1. Growth
- -----------------------------------------------
2. International
- -----------------------------------------------
3. [New Fund]**
- -----------------------------------------------
4. Growth-Income
- -----------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
- ----------------------------------------------------
5. Asset Allocation
- ----------------------------------------------------
6. High-Yield Bond
- ----------------------------------------------------
7. Bond Fund
- ----------------------------------------------------
8. U.S. Govt./AAA-Rated Securities
- ----------------------------------------------------
9. Cash Management
- ----------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Without EGMDB

1 YEAR 3 YEARS
- ----------------------------------------------------
<S> <C> <C>
1. Growth $ $
- ----------------------------------------------------
2. International
- ----------------------------------------------------
3. [New Fund]*
- ----------------------------------------------------
4. Growth-Income
- ----------------------------------------------------
5. Asset Allocation
- ----------------------------------------------------
6. High-Yield Bond
- ----------------------------------------------------
7. Bond Fund
- ----------------------------------------------------
8. U.S. Govt./AAA-Rated Securities
- ----------------------------------------------------
9. Cash Management
- ----------------------------------------------------
</TABLE>

If you do not surrender your contract, you would pay
the following expenses on a $1,000 investment,
assuming a 5% annual return:

<TABLE>
<CAPTION>
With EGMDB

1 YEAR 3 YEARS
- ----------------------------------------------------
<S> <C> <C>
1. Growth
- ----------------------------------------------------
2. International
- ----------------------------------------------------
3. [New Fund]*
- ----------------------------------------------------
4. Growth-Income
- ----------------------------------------------------
5. Asset Allocation
- ----------------------------------------------------
6. High-Yield Bond
- ----------------------------------------------------
7. Bond Fund
- ----------------------------------------------------
8. U.S. Govt./AAA-Rated Securities
- ----------------------------------------------------
9. Cash Management
- ----------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Without EGMDB

* These expenses are estimated amounts for the fiscal year ending
November 30, 1997.

All of the figures provided under the subheading Annual expenses of the funds
and part of the data used to produce the figures in the examples were supplied
by the underlying portfolio company (series) through the VAA's principal
underwriter, American Funds Distributors, Inc. We have not independently
verified this information.

This table is provided to assist you in understanding the various costs and
expenses that you will bear directly or indirectly depending on whether or not
the EGMDB is in effect. The table reflects expenses both of the VAA for the
American Legacy III subaccounts and of the nine funds. For more complete
descriptions of the various costs and expenses involved, see Charges and other
deductions in this Prospectus, and Fund Organization and Management in the
Prospectus for the series. Premium taxes may also be applicable, although they
do not appear in the table. In addition, we reserve the right to impose a
transfer charge, although we do not currently do so. The examples should not be
considered a representation of past or future expenses. Actual expenses may be
more or less than those shown. This table is unaudited.

Synopsis

What type of contract am I buying? It is an individual annuity contract issued
by Lincoln Life. It may provide for a fixed annuity and/or a variable annuity.
This Prospectus is intended to provide disclosure only about the variable
portion of the contract. See The contracts.

What is the variable annuity account (VAA)? It is a segregated asset account
established under Indiana insurance law, and registered with the SEC as a unit
investment trust. The assets of the
<PAGE>

VAA are allocated to one or more subaccounts, according to your investment
choice. Those 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? Through its various subaccounts, the VAA uses
your purchase payments to purchase series shares, at your direction, in one or
more of the following investment funds of the series: Growth, International,
[New Fund], Growth-Income, Asset Allocation, High-Yield Bond, Bond, U.S.
Government/AAA-Rated Securities, and Cash Management. In turn, each fund holds a
portfolio of securities consistent with its own particular investment policy.
See Investments of the variable annuity account and Description of the series.

Who invests my money? The investment advisor for the series is CRMC, Los
Angeles, California. CRMC is a long-established investment management
organization, and is registered as an investment advisor with the SEC. See
Investments of the variable annuity account and Investment advisor.

How does the contract work? Once we approve your application, you will be issued
your individual annuity contract. During the accumulation period, while you are
paying in, your purchase payments will buy accumulation units under the
contract. Should you decide to annuitize (that is, change your contract to a
payout mode rather than an accumulation mode), your accumulation units will be
converted to annuity units. Your periodic annuity payout will be based upon the
number of annuity units to which you became entitled at the time you decided to
annuitize and the value of each unit on the valuation date. See The contracts.

What charges are associated with this contract? Should you decide to withdraw
contract value before your purchase payments have been in your contract for a
certain minimum period, you will incur a contingent deferred sales charge of
anywhere from 1% to 6%, depending upon how many full contract years those
payments have been in the contract. (Note: This sales charge is not assessed
upon: (1) the first four withdrawals of contract value during a contract year to
the extent that the sum of the percentages of the contract value withdrawn by
the withdrawals does not exceed 10% (this 10% withdrawal exception does not
apply to a surrender of a contract); (2) automatic withdrawals in total not in
excess of 10% of the contract value during a contract year, made by non-trustee
contractowners who are at least 59 1/2; (3) annuitization; (4) upon the death of
the owner; (5) 90 days of continuous confinement of the owner in an accredited
nursing home or equivalent health care facility; (6) the occurrence of a
terminal illness of the owner that results in a life expectancy of less than one
year as determined by a qualified professional medical practitioner; (7) where
total and permanent disability occurs after the contract effective date and
before the contract owner's 65th birthday; or (8) when the surviving spouse
assumes ownership of the contract as a result of the death of the original owner
(in such case, the CDSC would be waived on the contract value as of the date
which the surviving spouse assumed contract ownership); however, this does not
apply if the spouses were joint owners. If a joint owner exists on a contract,
both the owner and joint owner must meet one of the exceptions for waiver of the
contingent deferred sales charge.)

If your state assesses a premium tax with respect to your contract, then at the
time the tax is incurred (or at such other time as we may choose), we will
deduct those amounts from purchase payments or contract value, as applicable.
See Charges and other deductions and Deductions for premium taxes.

We assess annual charges in the aggregate amount of 1.40% against the daily net
asset value of the VAA, including that portion of the account attributable to
your purchase payments. These charges consist of 0.10% as an administrative
charge and 1.30% as a mortality and expense risk charge. If the EGMDB is not in
effect, the mortality and expense risk charge is 1.15%, resulting in an
aggregate charge against the VAA of 1.25%. For a complete discussion of the
charges associated with the contract, see Charges and other deductions.

The series pays a fee to its investment advisor, CRMC, based upon the average
daily net asset value of each fund in the series. See Investments of the
variable annuity account - Investment advisor. The class of shares of each
series available under the contracts also bears expenses pursuant to a 12b-1
plan. In addition, there are other expenses associated with the daily operation
of the series. These are more fully described in the Prospectus for the series.

How much must I pay, and how often? Subject to the minimum and maximum payments
stated on the first page of the Prospectus, the amount and frequency of your
payments are completely flexible. See The contracts - Purchase payments.
<PAGE>

How will my annuity payouts be calculated? If you decide to annuitize, you elect
an annuity payout option. Once you have done so, your periodic payout will be
based upon a number of factors. If you participate in the VAA, the changing
values of the funds in which you have invested will be one factor. See Annuity
payouts. Remember that participants in the VAA benefit from any gain, and take a
risk of any drop, in the value of the securities in the funds' portfolios.

What happens if I die before I annuitize? If the EGMDB is in effect, the
beneficiary whom you designate will receive either the EGMDB or the then current
value of the contract, whichever is greater. If the EGMDB is not in effect, the
beneficiary will receive the current value of the contract. Your beneficiary
will have certain options for how the money is to be paid out.

May I transfer contract value between funds in the series? Yes; however, there
are limits on how often you may do so. See The contracts-Transfers of
accumulation units between subaccounts and Transfers following the annuity
commencement date.

May I transfer contract value from the fixed to the variable side of the
contract, and vice-versa? Yes, subject once again to specific restrictions in
the contract. See The contracts - Transfers of accumulation units to and from
the General Account.

May I surrender the contract or make a withdrawal? Yes, subject to contract
requirements and to restrictions imposed under certain retirement plans.
Contractowners under a plan for a public school system or tax-exempt institution
qualifying under Section 403(b) of the code are subject to special restrictions
upon surrender and withdrawal.

If you surrender the contract or make a withdrawal, certain charges may be
assessed, as discussed above and under Charges and other deductions. In
addition, the Internal Revenue Service (IRS) may assess a 10% premature
withdrawal penalty tax. A surrender or a withdrawal may be subject to 20%
withholding. See Federal tax status and withholding.

Do I get a free look at this contract? Yes. If within ten days (or a longer
period if required by law) of the date you first receive the contract you return
it, postage prepaid to the home office of Lincoln Life, it will be canceled.
However, except in some states, during this period, you assume the risk of a
market drop with respect to purchase payments which you allocate to the variable
side of the contract. See Return privilege.
<PAGE>

Condensed Financial Information

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.

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, with or without contingent deferred sales charges. Results
calculated without contingent deferred sales charges will be higher. 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 financial statements for Lincoln Life are located in the SAI. If you would
like a free copy of the SAI, complete and mail the enclosed card, or call 1-800-
942-5500, Ext. 2348.

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.

Variable annuity account (VAA)

On February 7, 1989, 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 is used to support annuity contracts other than the
contract described in this prospectus. The VAA satisfies the

<PAGE>

definition of 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.

Investments of the variable annuity account

You decide the subaccount(s) to which you allocate purchase payments. There is a
separate subaccount which corresponds to each class of each fund of the series.
You may change your allocation without penalty or charges. Shares of the funds
will be sold at net asset value with no initial sales charge to the VAA in order
to fund the contracts. The series is required to redeem fund shares at net asset
value upon our request. We reserve the right to add, delete or substitute funds.

Investment advisor

The investment advisor for the series is CRMC, 333 South Hope Street, Los
Angeles, California 90071. CRMC is one of the nation's largest and oldest
investment management organizations. As compensation for its services to the
series, the investment advisor receives a fee from the series 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
series.

Description of the series

The series was organized as a Massachusetts business trust in 1983 and is
registered as a diversified, open-end management investment company
under the 1940 Act. Diversified means not owning too great a percentage of the
securities of any one company. An open-end company is one which, in this case,
permits Lincoln Life to sell its shares back to the series when you make a
withdrawal, surrender the contract or transfer from one fund to another.
Management investment company is the legal term for a mutual fund. These
definitions are very general. The precise legal definitions for these terms are
contained in the 1940 Act.

The series has nine separate portfolios of funds. Fund assets are segregated and
a shareholder's interest is limited to those funds in which the shareholder owns
shares. The series has adopted a plan pursuant to Rule 18f-3 under the 1940 Act
to permit the series to establish a multiple class distribution system for all
of its portfolios. The series' Board of Trustees may at any time establish
additional funds or classes, which may or may not be available to the VAA.

Under the multi-class system adopted by the Series, shares of each class of a
multi-class fund represent an equal pro rata interest in that fund and,
generally, have identical voting, dividend, liquidation, and other rights,
preferences, powers, restrictions, limitations, qualifications and terms and
conditions, except that: (1) each class has a different designation; (2) each
class of shares bears its "class expenses;" (3) each class has exclusive voting
rights on any matter submitted to shareholders that relates solely to its
distribution arrangement; and (4) each class has separate voting rights on any
matter submitted to shareholders in which the interests of one class differ from
the interests of any other class. Expenses currently designated as "Class
Expenses" by the series' Board of Trustees under the plan pursuant to Rule 18f-3
include, for example, service fees paid under a 12b-1 plan to cover servicing
fees paid to dealers selling the Contracts.

Each fund has two classes of shares, designated as [Class I] shares and
[Class II] shares. [Class II] and [Class I] differ primarily in that [Class II]
but not [Class I] shares are subject to a 12b-1 plan. Only [Class II] shares are
available under the contracts.

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
series 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. Growth Fund -- This fund seeks to provide growth of capital. Whatever current
income is generated by the fund is likely to be incidental to the objective of
capital growth. Ordinarily, accomplishment of the fund's objective of capital
growth will be sought by investing primarily in common stocks or securities with
common stock characteristics.

2. International Fund -- The investment objective is long-term growth of capital
by investing primarily in securities of issuers domiciled outside the United
States.

3. [New Fund] -- [description to be added]

4. Growth-Income Fund -- The investment objective is growth of capital and
income. In the selection of securities for investment, the possibilities of
appreciation and potential dividends are given more weight than current yield.
Ordinarily, the assets of the Growth-Income Fund
<PAGE>

consist principally of a diversified group of common stocks, but other types of
securities may be held when deemed advisable including preferred stocks and
corporate bonds, including convertible bonds.

5. Asset Allocation Fund -- This fund seeks total return (including income and
capital gains) and preservation of capital over the long-term by investing in a
diversified portfolio of securities. These securities can include common stocks
and other equity-type securities (such as convertible bonds and preferred
stocks), bonds and other intermediate and long-term fixed-income securities and
money market instruments (debt securities maturing in one year or less).

6. High-Yield Bond Fund -- The investment objective is a fully managed,
diversified bond portfolio. It seeks high current income and secondarily seeks
capital appreciation. This fund will generally be invested substantially in
intermediate and long-term corporate obligations, with emphasis on higher
yielding, higher risk, lower rated or unrated securities.

7. Bond Fund -- This fund seeks a high level of current income as is
consistent with the preservation of capital by investing in a broad variety of
fixed income securities including: marketable corporate debt securities, loan
participations, U.S. Government Securities, mortgage-related securities, other
asset-backed securities and cash or money market instruments. Please note: As of
the date of this Prospectus, the Bond Fund is not yet available in all states.
Please consult your investment dealer for current information about the Bond
Fund's availability.

8. U.S. Government/AAA-Rated Securities Fund -- This fund seeks a high level of
current income consistent with prudent investment risk and preservation of
capital by investing primarily in a combination of securities guaranteed by the
U.S. Government and other debt securities rated AAA or Aaa.

9. Cash Management Fund -- The investment objective is high yield while
preserving capital by investing in a diversified selection of money market
instruments.

Sale of fund shares by the series

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 series 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 series sells shares in any of its funds to separate accounts
of unaffiliated life insurance companies, it is said to engage in shared
funding.

The series 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
series' 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 series.

Reinvestment

<PAGE>

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 series and/or any funds within the series 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.) No substitution of the
shares attributable to your account may take place without notice to you and
before approval of the SEC, in accordance with the 1940 Act.

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
automatic withdrawal services), 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 the actual life-span of persons receiving annuity payments under
contract guarantees will exceed the assumptions reflected in our guaranteed
rates (these rates are incorporated in the contract and cannot be changed); the
risk that death benefits paid under the EGMDB, will exceed the actual contract
value; the risk that more owners than expected will qualify for waivers of the
contingent deferred sales charge; and the risk that our costs in providing the
services will exceed our revenues from contract charges (which cannot be changed
by us). The amount of a charge may not necessarily correspond to the costs
associated with providing the services or benefits indicated by the designation
of the charge. For example, the contingent deferred sales load collected may not
fully cover all of the sales and distribution expenses actually incurred by us.

Deductions from the VAA

We deduct from the VAA an amount, computed daily, which is equal to an annual
rate of 1.40% (1.25% for contracts without the EGMDB) of the daily net asset
value. The charge consists of a 0.10% administrative charge and a 1.30% (1.15%
for contracts without the EGMDB) mortality and expense risk charge.

Contingent deferred sales charge

A contingent deferred sales charge applies (except as described below) to
surrenders and withdrawals of other purchase payments that have been invested
for the periods indicated as follows:

<TABLE>
<CAPTION>
Number of complete contract years that
a purchase payment has been invested
- -------------------------------------------------------------------
Less At
than least
2 years 2 3 4 5 6 7+
<S> <C> <C> <C> <C> <C> <C> <C>

Contingent deferred sales
charge as a percentage of
the surrendered or
withdrawn purchase payments 6% 5 4 3 2 1 0
</TABLE>

A contingent deferred sales charge does not apply to:

1. A surrender or withdrawal of purchase payments that have been invested at
least seven full contract years.
<PAGE>

2. The first four withdrawals of contract value during a contract year to the
extent that the sum of the percentages of the contract value withdrawn by the
withdrawals does not exceed 10% of contract value (this 10% withdrawal exception
does not apply to a surrender of a contract);

3. Automatic withdrawals in total not in excess of 10% of the contract value
during a contract year, made by non-trustee contractowners who are at least
59 1/2;

4. Annuitization;

5. A surrender of a contract or withdrawal of contract value as a result of the
permanent and total disability of the owner as defined in section 22(e)(3) of
the code, subsequent to the effective date of the contract and before the 65th
birthday of the owner;

6. When the surviving spouse assumes ownership of the contract as a result of
the death of the original owner (in such case, the contingent deferred sales
charge would be waived on the value of the contract as of the date which the
surviving spouse assumed the contract ownership); however, this does not apply
if the spouses were joint owners;

7. A surrender of a contract as a result of 90 days of continuous confinement of
the contractowner in an accredited nursing home or equivalent health care
facility;

8. A surrender of a contract as a result of terminal illness of the
contractowner that results in a life expectancy of less than one year as
determined by a qualified professional medical practitioner;

9. A surrender of the contract as a result of the death of the contractowner.
However, these charges are not waived as a result of the death of an annuitant
who is not the contractowner; and

10. A surrender of a contract or withdrawal of contract value of a contract
issued to employees and registered representatives of any member of the selling
group and their spouses and minor children, or to officers, directors, trustees
or bona-fide full-time employees of Lincoln National Corp. or The Capital Group,
Inc. or their affiliated or managed companies (based upon the contractowner's
status at the time the contract was purchased).

If a joint owner exists on a contract, both the owner and joint owner must meet
one of the exceptions for waiver of the contingent deferred sales charge.

The contingent deferred sales charge is calculated separately for each contract
year's purchase payments to which a charge applies. (For purposes of calculating
this charge, we assume that purchase payments are withdrawn on a first in-first
out basis, and that all purchase payments are withdrawn before any earnings are
withdrawn.) The contingent deferred sales charges associated with surrender or
withdrawal are paid to us to compensate us for the loss we experience on
contract distribution costs when contractowners surrender or withdraw before
distribution costs have been recovered.

Deductions for premium taxes

<PAGE>

Any premium tax or other tax levied by any governmental entity as a result of
the existence of the contracts or the VAA will be deducted from the contract
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
administrative 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 4.0%.

Other charges and deductions

There are deductions from and expenses paid out of the assets of the underlying
series that are more fully described in the Prospectus for the series. Among
these deductions and expenses are 12b-1 fees which reimburse Lincoln Life for
certain expenses incurred in connection with certain administrative and
distribution support services provided to the series.

Additional information

Participants in the Texas Optional Retirement Program should refer to
Restrictions under the Texas Optional Retirement Program, later in this
Prospectus booklet.

The administrative and contingent deferred sales 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
administrative and contingent deferred sales 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.

If a completed application and all other information necessary for processing a
purchase order are 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 cannot be completed
within those five days, you will be informed of the reasons, and the purchase
payment will be returned immediately (unless you specifically authorize us to
keep it until the application is complete). 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
and the annuitant cannot be older than age 85.

Purchase payments

Purchase payments are payable to us at a frequency and in an amount selected by
you in the

<PAGE>

application. The minimum initial purchase payment is $1,500 for nonqualified
contracts and Section 403(b) transfers/rollovers; and $300 for qualified
contracts. The minimum annual amount for subsequent purchase payments is $300
for nonqualified and qualified contracts. 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 $1 million for an owner or $500,000 for each
joint owner. If you stop making purchase payments, the contract will remain in
force as a paid-up contract subject to our right to terminate the contract in
accordance with the terms set forth in 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 or
the death of the contractowner (or joint owner, if applicable), 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 the class of its corresponding fund of the series, according to
your instructions.

The minimum amount of any purchase payment which can be put into any one
subaccount is $20 under the contract. Upon allocation to the appropriate
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., E.S.T. If the purchase payment is received at or
after 4:00 p.m., E.S.T., 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 investments perform, but also upon the
expenses of the VAA and the underlying funds.

Valuation of accumulation units

Accumulation units for each subaccount are valued separately. Initially, the
value of each accumulation unit was set at $1.00. Thereafter, the value of an
accumulation unit in any subaccount on any valuation date equals the value of an
accumulation unit in that subaccount as of the preceding valuation date
multiplied by the net investment factor of that subaccount for the current
valuation period.

The net investment factor is an index used to measure the investment performance
of a subaccount from one valuation date to the next. The net investment factor
for any subaccount for any valuation date reflects the change in the net
asset value per share of the fund held in the subaccount from one valuation
Period to the next, adjusted for the daily deduction of the administrative and
mortality and expense risk charges from assets in the subaccount. If any "ex-
dividend" date occurs during the valuation period, the per share amount of any
dividend or capital gain distribution is taken into account. Also, if any taxes
need to be reserved, a per share charge or credit for any taxes reserved for,
which is determined by us to have resulted from the operations of the
subaccount, is taken into account.

Because a different daily charge is made for contracts with the EGMDB than for
those without, a different net investment factor is calculated for each of the
two types of contracts, resulting in different corresponding accumulation unit
values on any given day.

Transfers between subaccounts before the annuity commencement date

Prior to the earlier of the surrender of the contract, payment of any death
benefit, or the annuity commencement date, you may transfer all or a portion of
your investment from one subaccount to another. A transfer
<PAGE>

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 on the valuation date the transfer request
is received.

Transfers between subaccounts are restricted to six times every contract year.
We reserve the right to waive this six-time limit. The minimum amount which 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 total balance of
the subaccount. A transfer may be made by writing to our home office or, if a
Telephone Exchange Authorization form (available from us) is on file with us, by
a toll-free telephone call. Currently, there is no charge to you for a transfer.
However, we reserve the right to impose a charge in the future for transfers
between subaccounts.

When thinking about a transfer of contract 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.

Transfers to and from the General Account before the annuity commencement date,
you may transfer all or any part of the contract value from the subaccount(s) to
the fixed side of the contract. These transfers cannot be elected more than six
times every contract year. We reserve the right to waive this six-time limit.
The minimum amount which can be transferred to the fixed side is $300 or the
total amount in the subaccount, if less than $300. However, if a transfer from a
subaccount would leave you with less than $300 in the subaccount, we may
transfer the total amount to the fixed side. Currently, there is no charge to
you for a transfer. However, we reserve the right to impose a charge in the
future for any transfers to and from the General Account.

You may also transfer all or any part of the contract value from the fixed side
of your contract to the various subaccount(s) subject to the following
restrictions: (1) the sum of the percentages of fixed value transferred is
limited to 25% of the value of the fixed side in any 12 month period; (2) the
minimum amount which can be transferred is $300 or the amount in the fixed
account; and (3) a transfer cannot be made during the first 30 days after the
issue date of the contract and cannot be elected more than six times every
contract year. We reserve the right to waive any of these restrictions.

Transfers after the annuity commencement date

After the annuity commencement date, you may transfer all or a portion of your
investment in one subaccount to another subaccount or to the fixed side of the
contract. Those transfers will be limited to three times per contract year.
However, after the annuity commencement date, no transfers are allowed from the
fixed side of the contract 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.

If the contractowner dies before the annuity commencement date and the
EGMDB is in effect, the death benefit paid to your designated beneficiary will
be the greater of: (1) contract value as of the day on which Lincoln Life
approves the payment of the claim; or (2) the highest contract value which the
contract attains on any policy anniversary date (including the inception date)
on ages up to, and including, the contractowner's age 75. The highest contract
value is increased by purchase payments and is decreased by partial withdrawals,
partial annuitizations, and any premium taxes made, effected or incurred
subsequent to the anniversary date on which the highest contract value is
obtained. If the EGMDB is not in effect, the death benefit will be equal to the
contract value. If there are joint owners, no death benefit is payable until the
death of the second owner to die. Upon the death of the first owner to die, the
surviving owner may continue the contract (subject to federal tax rules) or
surrender the contract. Any applicable contingent deferred sales charge will not
be waived on a surrender.

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, satisfactory to us, of

<PAGE>

the death of the owner; (2) Written authorization for payment; and (3) Our
receipt of all required claim forms, fully completed.

When applying for a contract, an applicant can request a contract without the
EGMDB. The EGMDB is not available under contracts for qualified plans (other
than IRAs) or contracts issued to a contractowner who is age 75 or older at the
time of issuance.

After a contract is issued, the contractowner may discontinue the EGMDB at any
time by sending a written request to Lincoln Life. The benefit will be
discontinued effective as of the valuation date we receive the request, and we
will cease deducting the charge for the benefit as of that date. See charges and
deductions. If you discontinue the benefit, it cannot be reinstated.

At any time during a 60-day period beginning at the time due proof of the death
of the last contractowner is received by us, the beneficiary may elect to
receive payment of the death benefit either in the form of a lump sum settlement
or an annuity payout.

If a lump sum settlement is requested, the proceeds will be mailed within seven
days of receipt of satisfactory claim documentation as discussed previously,
subject to the laws and regulations governing payment of death benefits. If an
election has not been made by the end of the 60-day period, a lump sum
settlement will be made to the beneficiary at that time. This payment may be
postponed as permitted by the 1940 Act.

If an annuity payout is elected, the annuity commencement date shall be the date
specified in the request but no later than 60 days after we receive satisfactory
claim documentation as discussed previously. Payment will be made in accordance
with applicable laws and regulations governing payment of death benefits.

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
interests (There are no restrictions on the beneficiary's use of the proceeds.);
and/or

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

Joint ownership

If a joint owner is named in the application, the joint owners shall be treated
as having equal undivided interests in the contract. Either owner, independently
of the other, may exercise any ownership rights in this contract.

Death of annuitant

If the annuitant is also the contractowner or a joint owner, then the death
benefit provided will be the death benefit subject to the provisions of this
contract regarding death of the contractowner. If the surviving spouse assumes
the Contract, the contingent annuitant becomes the annuitant. If no contingent
annuitant is named, the surviving spouse becomes the annuitant.

If an annuitant who is not the contractowner or joint owner dies, then the
contingent annuitant, if any, becomes the annuitant. If no contingent annuitant
is named, the contractowner (or joint owner if younger) becomes the annuitant.
<PAGE>

Surrenders and withdrawals

Before the annuity commencement date, we will allow the surrender of the
contract or a withdrawal of the contract value upon your written request,
subject to the rules discussed below. Surrender or withdrawal rights after the
annuity commencement date depend upon the annuity option you select.

Special restrictions on surrenders/withdrawals apply if your contract is
purchased as part of a retirement plan of a public school system or 501(c)(3)
organization under Section 403(b) of the code. Beginning January 1, 1989, in
order for a contract to retain its tax-qualified status, Section 403(b)
prohibits a withdrawal from a 403(b) contract of post-1988 contributions (and
earnings on those contributions) pursuant to a salary reduction agreement.
However, this restriction does not apply if the annuitant (a) attains age
59 1/2, (b) separates from service, (c) dies, (d) becomes totally and
permanently disabled and/or (e) experiences financial hardship (in which event
the income attributable to those contributions may not be withdrawn).

Pre-1989 contributions and earnings through December 31, 1988, are not subject
to the previously stated restriction. Funds transferred to the contract from a
403(b)(7) custodial account will be subject to the restrictions.

The contract value available upon surrender/withdrawal is the value of the
contract at the end of the valuation period during which the written request for
surrender/withdrawal is received at the home office minus any applicable
contingent deferred sales charge. Unless a request for withdrawal specifies
otherwise, withdrawals will be made from all subaccounts within the VAA and from
the General Account in the same proportion that the amount of withdrawal bears
to the total contract value. The minimum amount which can be withdrawn is $300,
and the remaining contract value must be at least $300. Where permitted by
contract, 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.

There are charges associated with surrender of a contract or withdrawal of
contract value before the annuity commencement date. You may specify whether
these charges are deducted from the amount you request to be withdrawn or
from the remaining contract value. See Charges and other deductions.

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

We reserve the right to terminate the contract, if your contract fails to meet
minimum contract value as payment frequencies as set forth in your state's
non-forfeiture law for individual deferred annuities.

Reinvestment privilege

You may elect to make a reinvestment purchase with any part of the proceeds of a
surrender/withdrawal, and we will recredit the surrender/withdrawal charges
previously deducted. This election must be made within 30 days of the date of
the surrender/withdrawal, and the repurchase must be of a contract covered by
this Prospectus. A representation must be made that the proceeds being used to
make the purchase have retained their tax-favored status under an arrangement
for which the contracts offered by this Prospectus are designed. The number of
accumulation units which will be credited when the proceeds are reinvested will
be based on the value of the accumulation unit(s) on the next valuation date.
This computation will occur following receipt of the proceeds and request for
reinvestment at the home office. You may

<PAGE>

utilize the reinvestment privilege only once. For tax reporting purposes, we
will treat a surrender/withdrawal and a subsequent reinvestment purchase as
separate transactions. You should consult a tax advisor before you request a
surrender/withdrawal or subsequent reinvestment purchase.

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 4.75% of each purchase
payment; plus an annual continuing commission of up to ___% of contract value;
plus service fees equal to an annual rate of ___% of the value of purchase
payments that remain invested. These commissions are not deducted from purchase
payments or contract value; they are paid by us.

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. 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 except as permitted by
the Employee Retirement Income Security Act (ERISA) of 1974 and upon written
notification to us. We assume no responsibility for the validity or effect of
any assignment. Consult your tax advisor about the tax consequences of an
assignment.

Contractowner questions

The obligations to purchasers under the contracts are those of Lincoln Life.
Your questions and concerns should be directed to us at 1-800-942-5500.

Annuity payouts

When you apply for a contract, you may select any annuity commencement date
permitted by law; however, this date can not be any later than the
contractowner's 85th birthday. (PLEASE NOTE THE FOLLOWING EXCEPTION: Contracts
issued under qualified employee pension and profit-sharing trusts [described in
Section 401(a) and tax exempt under Section 501(a) of the code] and qualified
annuity plans [described in Section 403(a) of the code], including H.R.10 trusts
and plans covering self-employed individuals and their employees, provide for
annuity payouts to start at the date and under the option specified in the
plan.)

The contract provides optional forms of payouts of annuities (annuity options),
each of which is payable on a variable basis, a fixed basis or a combination of
both as you specify. The contract provides that all or part of the contract
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
<PAGE>

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 annuitant would receive no payouts if he/she
dies before the date set for the first 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
selected 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, divided by (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.

None of the options listed above currently provide withdrawal features,
permitting the contractowner to withdraw commuted values as a lump sum payment.
Other options, with or without withdrawal features, may be made available by us.
Options are only available to the extent they are consistent with the
requirements of the contract and Section 72(s) of the code, if applicable. The
mortality and expense risk charge and the charge for administrative services
will be assessed on all annuity payouts, including options that may be offered
that do not have a life contingency and therefore no mortality risk.

You may change your annuity commencement date, change your annuity option or
change the allocation of your investment among subaccounts up to 30 days before
your 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
with 10 year guaranteed period annuity (on a fixed, variable or combination
fixed and variable basis, in proportion to the account allocations at the time
of annuitization). 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 your
beneficiary as payouts become due.

Variable annuity payouts

Variable annuity payouts will be determined using:

1. The contract value on the annuity commencement date;

2. The annuity tables contained in the contract;

3. The annuity option selected; and

<PAGE>

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 month thereafter.

We assume an investment return of 4% per year, as applied to the applicable
mortality table. The amount of each payout after the initial payout will depend
upon how the underlying fund(s) perform, relative to the 4% assumed rate. There
is a more complete explanation of this calculation in the SAI.

Federal tax status

This section is a discussion of the Federal income tax rules applicable to the
contracts as of the date of this Prospectus. More information is provided in the
SAI. THESE DISCUSSIONS AND THOSE IN THE SAI ARE NOT INTENDED AS TAX ADVICE. This
section does not discuss the Federal tax consequences resulting from every
possible situation. No attempt has been made to consider any applicable state,
local, or foreign tax law, other than the imposition of any state premium taxes
(See Deductions for premium taxes). If you are concerned about the tax
implications with respect to the contracts, you should consult a tax advisor.
The following discussion is based upon our understanding of the present Federal
income tax laws as they are currently interpreted by the IRS. No representation
is made about the likelihood of continuation of the present Federal income tax
laws or their current interpretations by the IRS.

Taxation of nonqualified contracts

You are generally not taxed on increases in the value of your contract until a
distribution occurs. This distribution can be in the form of a lump sum payout
received by requesting all or part of the cash surrender value (i.e.
surrenders/withdrawals) or as annuity payouts. For this purpose, the assignment
or pledge of, or the agreement to assign or pledge, any portion of the value of
a contract will be treated as a distribution. A transfer of ownership of a
contract, or designation of an annuitant (or other beneficiary) who is not also
the contractowner, may also result in tax consequences. The taxable portion of a
distribution (in the form of a lump sum payout or an annuity) is taxed as
ordinary income. In general, a contractowner who is not a natural person (for
example, a corporation [subject to limited exceptions]) will be taxed on any
increase in the contract's cash value over the investment in the contract during
the taxable year, even if no distribution occurs. (See Section 72(u) of the
code.) The next discussion applies to contracts owned by natural persons.

In the case of a surrender under the contract or withdrawal of contract value,
generally amounts received are first treated as taxable income to the extent
that the cash value of the contract immediately before the surrender exceeds the
investment in the contract at that time. Any additional amount withdrawn is not
taxable. The investment in the contract generally equals the portion, if any, of
any purchase payment made by or on behalf of an individual under a contract
which is not excluded from the individual's gross income.

Even though the tax consequences may vary depending on the form of annuity
payout selected under the contract, the contractowner of an annuity payout
generally is taxed on the portion of the annuity payout that exceeds the
investment in the contract. For variable annuity payouts, the taxable portion is
determined by a formula that establishes a specific dollar amount of each payout
that is not taxed. The dollar amount is determined by dividing the investment in
the contract by the total number of expected periodic payouts. For fixed annuity
payouts, there generally is no tax
<PAGE>

on the portion of each payout that represents the same ratio that the investment
in the contract bears to the total expected value of payouts for the term of the
annuity; the remainder of each payout is taxable. For individuals, the entire
distribution (whether fixed or variable) will be fully taxable once the
recipient is deemed to have recovered the dollar amount of the investment in the
contract.

There may be imposed a penalty tax on distributions equal to 10% of the amount
treated as taxable income. The penalty tax is not imposed in certain
circumstances, which generally are distributions:

1. Received on or after the contractowner attains age 59 1/2;

2. Made as a result of death or disability of the contractowner;

3. Received in substantially equal periodic payments such as a life annuity
(subject to special recapture rules if the series of payouts is subsequently
modified);

4. Under a qualified funding asset in a structured settlement;

5. Under an immediate annuity contract as defined in the code; and/or

6. Under a contract purchased in connection with the termination of certain
retirement plans.

Qualified contracts

The contracts may be purchased in connection with the following types of tax-
favored retirement plans:

1. Contracts purchased for employees of public school systems and certain tax-
exempt organizations, qualified under Section 403(b) of the code (normally for
transfers or rollovers only);

2. Pension and profit-sharing plans of self-employed individuals (H.R. 10 or
Keogh plans) or corporations, qualified under Section 401(a) or 403(a) of the
code;

3. IRAs, qualified under Section 408 of the Code;

4. Deferred compensation plans of state or local governments, qualified under
Section 457 of the code;

5. SEPs, qualified under Section 408(k) of the code; and/or

6. Simple retirement accounts, qualifed under Section 401(k)(11) of the
code, commonly referred to as SIMPL or Simple 401(k) plans.

The tax rules applicable to these plans, including restrictions on contributions
and benefits, taxation of distributions and any tax penalties, vary according to
the type of plan and its terms and conditions. Participants under such plans, as
well as contractowners, annuitant and beneficiaries, should be aware that the
rights of any person to any benefits under such plans may be subject to the
terms and conditions of the plans themselves, regardless of the terms and
conditions of the contracts. Purchasers of contracts for use with any qualified
plan, as well as plan participants and beneficiaries, should consult counsel and
other advisors as to the suitability of the contracts to their specific needs,
and as to applicable code limitations and tax consequences.

Multiple contracts

All contracts entered into after October 21, 1988, and issued by the same
insurance company (or its affiliates) to the same contractowner during any
calendar year will be treated as a single contract for tax purposes.

Investor control

The Treasury Department has indicated that guidelines may be issued under which
a variable
<PAGE>

annuity contract will not be treated as an annuity contract for tax purposes if
the contractowner has excessive control over the investments underlying the
contract. The issuance of those guidelines may require us to impose limitations
on your right to control the investment. We do not know whether any such
guidelines would have a retroactive effect.

Withholding

Generally, pension and annuity distributions are subject to withholding for the
recipient's Federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. Under the Unemployment Compensation Amendments of 1992 (UCA), 20%
income tax withholding may apply to eligible rollover distributions. All taxable
distributions from qualified plans and Section 403(b) annuities are eligible
rollover distributions, except (1) annuities paid out over life or life
expectancy, (2) installments paid for a period spanning 10 years or more, and
(3) required minimum distributions. The UCA imposes a mandatory 20% income tax
withholding on any eligible rollover distribution that the contractowner does
not elect to have paid in a direct rollover to another qualified plan, Section
403(b) annuity or individual retirement account. Distributions from Section 457
plans are subject to the general wage withholding rules.

Voting rights

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

Series 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 series. Since the series engages in shared funding, other
persons or entities besides Lincoln Life may vote series shares. See Sale of
fund shares by the series.

Distribution of the contracts

American Funds Distributors, Inc. (AFD), 333 South Hope Street, Los Angeles, CA
90071, is the distributor and principal underwriter of the contracts. They will
be sold by properly licensed registered representatives of independent broker-
dealers which in turn have selling agreements with AFD and have been licensed by
state insurance departments to represent us. AFD is registered with the SEC
under the Securities Exchange Act of 1934 as a broker-
<PAGE>

dealer and is a member of the National Association of Securities Dealers (NASD).
Lincoln Life will offer contracts in all states where 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 office
at P.O. Box 2348, 1300 South Clinton Street, Fort Wayne, Indiana, 46801. A
contract canceled under this provision will be void. With respect to the fixed
portion of a contract, we will return purchase payments. With respect to the
VAA, except as explained in the following paragraph, we will return the contract
value as of the date of receipt of the cancellation, plus any premium taxes
which had been deducted. No contingent deferred sales charge will be made. 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.

Restrictions under the Texas Optional Retirement Program

Title 8, Section 830.105 of the Texas Government Code, consistent with prior
interpretations of the Attorney General of the State of Texas, permits
participants in the Texas Optional Retirement Program (ORP) to redeem their
interest in a variable annuity contract issued under the ORP only upon:

1. Termination of employment in all institutions of higher education as defined
in Texas law;

2. Retirement; or

3. Death.

Accordingly, a participant in the ORP will be required to obtain a certificate
of termination from their employer before accounts can be redeemed.

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 by that Act or any other applicable law or regulation.

<PAGE>

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.

Lincoln National Variable Annuity Account E and Lincoln Life Flexible Premium
Variable Life Accounts F, G and J (all registered as investment companies under
the 1940 Act) and Lincoln National Flexible Premium Group Variable Annuity
Accounts 50, 51 and 52 are all segregated investment accounts of Lincoln
National Life Insurance Co. (Lincoln Life) which also invest in the series.
The series also offers shares of the funds to other segregated investment
accounts.

Statement of Additional Information table of contents for Variable Annuity
Account H American Legacy III

General Information and History of Lincoln Life

Special Terms

Services

Underwriter

Purchase of Securities Being Offered

Calculation of Investment Results

Annuity Payments

Federal Tax Status

Advertising and Sales Literature

Financial Statements

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)

THE AMERICAN LEGACY III

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H
(REGISTRANT)

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
(DEPOSITOR)

This Statement of Additional Information should be read in conjunction with the
American Legacy III Prospectus of Lincoln National Variable Annuity Account H
dated _____ _, 1997. You may obtain a copy of the American Legacy III Prospectus
on request and without charge. Please write Barb Servos, The Lincoln National
Life Insurance Company, P.O. Box 2348, Fort Wayne, Indiana 46801 or call 1-800-
942-5500, Extension 2348.
------------

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.

TABLE OF CONTENTS

ITEM PAGE
General Information and History of Lincoln Life B-2
Special Terms B-2
Services B-2
Purchase of Securities Being Offered B-2
Underwriter B-3
Calculation of Investment Results B-3
Annuity Payments B-5
Federal Tax Status B-5
Advertising and Sales Literature B-9
Financial Statements B-10

THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION IS _____ _, 1997.
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION (SAI)
LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H

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 and health 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, 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.

CUSTODIAN

The custodian for the securities purchased by the series is State Street Bank
and Trust Company, 225 Franklin Street, Boston, MA 02101. Custodian, as
authorized by the series, will hold, transfer, exchange, deliver or loan the
series' securities, and will maintain certain cash accounts in support of those
functions.

INDEPENDENT AUDITORS

The financial statements of the Variable Annuity Account and the consolidated
financial statements and schedules of Lincoln Life appearing in this Statement
of Additional Information and Registration Statement have been audited by Ernst
& Young LLP, independent auditors, as set forth in their reports thereon also
appearing elsewhere herein and in the Registration Statement. Such financial
statements and schedules have been included herein in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.

KEEPER OF RECORDS

All accounts, books, records and other documents which are required to be
maintained for the Variable Annuity Account 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 Variable Annuity Account is made by Lincoln Life for this service.

<PAGE>

UNDERWRITER

Lincoln Life has contracted with American Funds Distributors, Inc. (AFD), 333
South Hope Street, Los Angeles, California 90071, a licensed broker-dealer, to
distribute the contracts through certain legally authorized sales persons and
organizations (Brokers). AFD and its Brokers are compensated under a standard
Compensation Schedule.

PURCHASE OF SECURITIES BEING OFFERED

The contracts are offered to the public through certain securities
broker/dealers who have entered into selling agreements with AFD and whose
personnel are legally authorized to sell annuity products. Although there are no
special purchase plans for any class of prospective buyers, the contingent
deferred sales charge normally assessed upon surrender or withdrawal of contract
value will be waived for officers, directors or bona fide full time employees of
LNC, The Capital Group, Inc., their affiliated or managed companies, and certain
other persons. See "Contingent Deferred Sales Charges" in the Prospectus.

Both before and after the annuity commencement date, there are exchange
privileges between sub-accounts, and from the Variable Account to the General
Account subject to restrictions set out in the Prospectus. See "The Contracts",
in the Prospectus. No exchanges are permitted between the Variable Account and
other separate accounts.

The offering of the contracts is continuous.

CALCULATION OF INVESTMENT RESULTS

(a) Average Annual Total Return:
The tables below show, for the various subaccounts of the VAA, an Average Annual
Total Return as of the stated periods, based upon a hypothetical initial
purchase payment of $1,000, calculated according to the formula set out after
the tables. The average Annual Total Return has been calculated to show the
Average Annual Total Return for a hypothetical contract with the EGMDB and
without EGMDB. Although the subaccounts commenced activity on ------- ---, 1997
these figures are calculated as if the subaccounts had commenced activity at the
same time as the underlying Funds.

Further, since the class of shares of the funds in which the subaccounts invest
was not created until after December 31, 1996, the figures below are based on
the performance of the class of shares of the funds issued since the funds
commenced operations in 1989, as adjusted to reflect the fees and expenses
chargeable against assets attributable to shares of [Class II].
<PAGE>

AVERAGE ANNUAL TOTAL RETURN
PERIOD ENDING DECEMBER 31, 1996

<TABLE>
<CAPTION>
1-YEAR PERIOD 5-YEAR PERIOD 10-YEAR PERIOD
<S> <C> <C> <C> <C> <C> <C>
With EGMDB Without EGMDB With EGMDB Without EGMDB With EGMDB Without EGMDB
---------- ------------- ---------- ------------- ---------- -------------
Growth Subaccount % % % % % %
(as if commenced activity 2/8/84)

International Subaccount
(as if commenced activity 5/1/90)

[New Fund] Subaccount

Growth-Income Subaccount
(as if commenced activity 2/8/84)

Asset Allocation Subaccount
(commenced activity 8/1/89)

High-Yield Bond Subaccount
(as if commenced activity 2/8/84

U.S. Gov't./AAA Subaccount
(as if commenced activity 12/1/85)

Cash Management Subaccount
(as if commenced activity 2/8/84)
</TABLE>

*The lifetime of this subaccount is less than the complete period indicated.

See the date the subaccount commenced activity under its name.
<PAGE>

The length of the periods and the last day of each period used in the above
table are set out in the table heading and in the footnotes above. The 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--

n
P(1 + T) = 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)

The formula assumes that: 1) all recurring fees have been charged to
contractowner accounts; 2) all applicable non-recurring charges are deducted at
the end of the period in question; and 3) there will be a complete redemption at
the end of the period in question.

b) Non-Standardized Investment Results:

The Variable Annuity Account 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.
<PAGE>

NON-STANDARDIZED INVESTMENT RESULTS
SUBACCOUNTS OF ACCOUNT H*

$10,000 invested in ...would have grown to this amount on
this fund through December 31, 1996**
American Legacy III
this many years ago...
With EGMDB*
-----------
Growth Growth-Income High-Yield Bond Cash Management
------------------ ----------------- ----------------- -----------------
Number Compound Compound Compound Compound
of Growth Growth Growth Growth
Years Periods Amount Rate Amount Rate Amount Rate Amount Rate
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

Without EGMDB
-------------
Growth Growth-Income High-Yield Bond Cash Management
------------------ ----------------- ----------------- -----------------
Number Compound Compound Compound Compound
of Growth Growth Growth Growth
Years Periods Amount Rate Amount Rate Amount Rate Amount Rate
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

With EGMDB
----------
U.S. Govt/AAA Asset Allocation International
------------------ ------------------ ------------------
Number Compound Compound Compound
of Growth Growth Growth
Years Periods Amount Rate Amount Rate Amount Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>

Without EGMDB
-------------
U.S. Govt/AAA Asset Allocation International
------------------ ------------------ ------------------
Number Compound Compound Compound
of Growth Growth Growth
Years Periods Amount Rate Amount Rate Amount Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>

</TABLE>

*Enhanced Guaranteed Minimum Death Benefit ("EGMDB")
<PAGE>

* Although the subaccounts for the contracts did not commence activity until
1997, these figures are calculated as if the subaccounts had commenced
activity at the same time as the corresponding underlying funds.

**For purposes of determining these investment results, American Legacy III's
1.40% annual asset charge and administrative fee for those contracts with
EGMDB and 1.25% for those contracts without EGMDB have been taken into
account. However, these examples do not assume redemption at the end of the
period.
<PAGE>

ANNUITY PAYMENTS

VARIABLE ANNUITY PAYMENTS

Variable annuity payments will be determined on the basis of: (1) the value of
the contract prior to 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 payments, Lincoln Life makes the following calculation: first,
it determines the dollar amount of the first monthly payment; and third, it
calculates the value of the annuity units each month thereafter. These steps are
explained below.

The dollar amount of the first monthly variable annuity payment is determined by
applying the total value of the accumulation units credited under the Contract
valued as of the fourteenth day prior to the annuity commencement date (less any
premium taxes) to the annuity tables contained in the contract. Amounts shown in
the tables are based on the 1971 Individual Annuity Mortality Tables, modified,
with an assumed investment return at the rate of 4% per annum. The first annuity
payment 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 4%
interest rate stated above is the measuring point for subsequent annuity
payments. If the actual Net Investment Rate (annualized) exceeds 4%, the payment
will increase at a rate equal to the amount of such excess. Conversely, if the
actual rate is less than 4%, annuity payments will decrease. If the assumed rate
of interest were to be increased, annuity payments 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 not prohibited by law.

At an annuity commencement date, the contract is credited with annuity units
for each subaccount on which variable annuity payments are based. The number of
Annuity Units to be credited is determined by dividing the amount of the first
monthly payment by the value of an annuity unit in each 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 annuity payments is determined by multiplying the contractowner's
fixed number of annuity units in each subaccount by the appropriate Annuity
Unit value for the

<PAGE>

valuation date ending 14 days prior to the date that payment is due.

The value of each subaccount annuity unit will be set initially at $1.00. The
annuity unit value for each subaccount at the end of any valuation date is
determined by multiplying the subaccount annuity unit value for the immediately
preceding valuation date by the product of:

(a) The net investment factor of the subaccount for the valuation period for
which the annuity unit value is being determined, and

(b) 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
payments 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.

FEDERAL TAX STATUS

GENERAL

The operations of the Variable Annuity Account form a part of, and are taxed
with, the operations of Lincoln Life under the Internal Revenue Code of 1986, as
amended (the "Code"). Investment income and realized net capital gains on the
assets of the Variable Annuity Account are reinvested and taken into account in
determining the accumulation and annuity unit values. As a result, such
investment income and realized net capital gain are automatically retained as
part of the reserves under the Contract. Under existing federal income tax law,
Lincoln Life believes that the Variable Annuity Account investment income and
realized net capital gain are not taxed to the extent they are retained as part
of the reserves under the Contract. Accordingly, Lincoln Life does not
anticipate that it will incur any federal income tax liability attributable to
the Variable Annuity Account, and therefore it does not intend to make any
provision for such taxes. However, if changes in the federal tax laws or
interpretations thereof result in Lincoln Life's being taxed on income or gain
attributable to the Variable Annuity Account, then Lincoln Life may impose a
charge against the Variable Annuity Account (with respect to some or all

<PAGE>

(Contracts) in order to make provision for payment of such taxes.

TAX STATUS OF NON-QUALIFIED CONTRACTS

Section 817(h) of the Code provides that separate account investments (or the
investments of a mutual fund the shares of which are owned by separate accounts
of insurance companies) underlying the contract be "adequately diversified" in
accordance with Treasury regulations in order for the contract to qualify as an
annuity contract under Section 72 of the Code. The Variable Annuity Account,
through each of the funds, intends to comply with the diversification
requirements prescribed in regulations, which affect how the assets in each of
the Funds in which the Variable Annuity Account invests may be invested. Capital
Research and Management Company is not affiliated with Lincoln Life and Lincoln
Life does not have control over the Series, or its investments. However, Lincoln
Life believes that each Fund in which the Variable Annuity Account owns shares
will meet the diversification requirements and that therefore the Contracts will
be treated as annuities under the Code.

The regulations relating to diversification requirements do not provide guidance
concerning the extent to which contractowners may direct their investments to
particular sub-accounts of a separate account. When guidance is provided, the
contract may need to be modified to comply with that guidance. For these
reasons, Lincoln Life reserves the right to modify the contract as necessary to
prevent the contractowner from being considered the owner of the assets of the
Variable Annuity Account.

In addition to the requirements of Section 817(h), code Section 72(s) provides
that contracts will not be treated as annuity contracts for purposes of Section
72 unless the contract provides that (1) if any contractowner dies on or after
the annuity starting date prior to the time the entire interest in the contract
has been distributed, the remaining portion of such interest must be distributed
at least as rapidly as under the method of distribution in effect at the time of
the contractowner's death; and (2) if any contractowner dies prior to the
annuity starting date, the entire interest must be distributed within five years
after the death of the contractowner. These requirements are considered
satisfied if any portion of the contractowner's interest that is payable to or
for the benefit of a "designated beneficiary" is distributed over that
designated beneficiary's life, or a period not extending beyond the designated
beneficiary's life expectancy, and if that distribution begins within one year
of the contractowner's death. The "designated beneficiary" must be a natural
person. No regulations interpreting these

<PAGE>

requirements have yet been issued. Thus, no assurance can be given that the
provisions contained in Contracts satisfy all such Code requirements. However,
Lincoln Life believes that such provisions in such Contracts meet these
requirements. Lincoln Life intends to review such provisions and modify them as
necessary to assure that they comply with the requirements of Section 72(s) when
clarified by Regulations or otherwise.

ANNUITIES FUNDING PLANS GENERALLY

The rules governing the tax treatment of contributions and distributions under
such plans, as set forth in the code and applicable rulings and regulations, are
complex and subject to change. These rules also vary according to the type of
plan and the terms and conditions of the plan itself. Therefore, no attempt is
made herein to provide more than general information about the use of Contracts
with the various types of plans, based on Lincoln Life's understanding of the
current federal tax laws as interpreted by the Internal Revenue Service.
Purchasers of contracts for use with such a plan and plan participants and
beneficiaries should consult counsel and other competent advisers as to the
suitability of the plan and the contract to their specific needs, and as to
applicable code limitations and tax consequences. Participants under such plans,
as well as contractowners, annuitants, and beneficiaries, should also be aware
that the rights of any person to any benefits under such plans may be subject to
the terms and conditions of the plans themselves regardless of the terms and
conditions of the Contract.

Following are brief descriptions of the various types of plans and of the use of
contracts in connection therewith.

PUBLIC SCHOOL SYSTEMS AND 501(C)(3) ORGANIZATIONS (SECTION 403(b) PLANS)

Payments made to purchase annuity contracts by public school systems or code
Section 501(c)(3) organizations for their employees are excludable from the
gross income of the employee to the extent that aggregate payments for the
employee do not exceed the "exclusion allowance" provided by Section 403(b) of
the code, the over-all limits for excludable contributions of Section 415 of the
code or the limit on elective contributions. Furthermore, the investment results
of the Fund credited to the account are not taxable until benefits are received
either in the form of annuity payments or in a single sum.

If an employee's individual account is surrendered, usually the full amount
received would be includable in income for that year at ordinary rates.

<PAGE>

QUALIFIED CORPORATE EMPLOYEE'S PENSION AND PROFIT-SHARING TRUSTS
AND QUALIFIED ANNUITY PLANS (SECTION 401(a) PLANS)

Payments made by a corporate employer and the increments on all payments for
qualified corporate plans are not taxable as income to the employee until
distributed. However, the employee may be required to include these amounts in
gross income prior to distribution if the qualified plan or trust loses its
qualification. Corporate plans qualified under Sections 401(a) or 403(a) of the
code are subject to extensive rules, including limitations on maximum
contributions or benefits.

Distributions of amounts in excess of non-deductible employee contributions are
generally taxable as ordinary income. If an employee or beneficiary receives a
"lump-sum distribution," that is, if the employee or beneficiary receives in a
single tax year the total amounts payable with respect to that employee, and the
benefits are paid as a result of the employee's death or separation from service
or after the employee attains 59-1/2, taxable gain may be eligible for special
"lump sum averaging" treatment. These special tax rules are not available in all
cases.

SELF-EMPLOYED INDIVIDUALS (H.R. 10 OR KEOGH)

Under code provisions, self-employed individuals may establish plans commonly
known as "H.R. 10" or "Keogh plans" for themselves and their employees. The tax
consequences to participants under such plans depend upon the plan itself. Such
plans are subject to special rules in addition to those applicable to qualified
corporate plans; therefore, purchasers of the contracts for use with H.R. 10
plans should seek competent advice as to suitability of plan documents and the
funding contracts.

INDIVIDUAL RETIREMENT ANNUITIES (IRA)

Under Section 408 of the code, individuals may participate in a retirement
program known as Individual Retirement Annuity (IRA). An individual may make an
annual IRA contribution of up to the lesser of $2,000 (or $2,250 if IRAs are
maintained for both the individual and his nonworking spouse) or 100% of
compensation. However, IRA contributions may be non-deductible in whole or in
part if (1) the individual or his spouse is an active participant in certain
other retirement programs and (2) the income of the individual (or of the
individual and his spouse) exceeds a specified amount. Distributions from
certain other IRA plans or qualified plans may be "rolled over" to an IRA on a
tax deferred basis without regard to the limit on contributions, provided
certain requirements are met. Distributions from IRA's are subject to certain
restrictions. Deductible

<PAGE>

IRA contributions and all IRA earnings will be taxed as ordinary income when
distributed. The failure to satisfy certain code requirements with respect to an
IRA may result in adverse tax consequences.

DEFERRED COMPENSATION PLANS (457 PLANS)

Under the code provisions, employees and independent contractors (participants)
performing services for state and local governments and certain tax-exempt
organizations may establish deferred compensation plans. While participants in
such plans may be permitted to specify the form of investment in which their
plan accounts will participate, all such investments are owned by the sponsoring
employer and are subject to the claims of its creditors. The amounts deferred
under a plan which meet the requirements of Section 457 of the code are not
taxable as income to the participant until paid or otherwise made available to
the participant or beneficiary. Deferrals are taxed as compensation from the
employer when they are actually or constructively received by the employee. As a
general rule, the maximum amount which can be deferred in any one year is the
lesser of $7,500, as increased for cost of living adjustments, or 33-1/3% of the
participant's includable compensation. However, in limited circumstances, up to
$15,000 may be deferred in each of the last three years before retirement.

SIMPLIFIED EMPLOYEE PENSION PLANS (SECTION 408(k))

An employer may make contributions on behalf of employees to a simplified
Employee Pension Plan ("SEPP") established prior to January 1, 1997, as provided
by Section 408(k) of the code. The contributions and distribution dates are
limited by the Code provisions. All distributions from the plan will be taxed as
ordinary income. Any distribution before the employee attains age 59-1/2 (except
in the event of death or disability) or the failure to satisfy certain other
Code requirements may result in adverse tax consequences.

TAX ON DISTRIBUTIONS FROM QUALIFIED CONTRACTS

The following rules generally apply to distributions from contracts purchased in
connection with the plans discussed above, other than 457 plans.

The portion, if any, of any contribution under a contract made by or on behalf
of an individual which is not excluded from the employee's gross income
(generally, the employee's own non-deductible contributions) constitutes his
"investment in the contract." If a distribution is made in the form of annuity
payments, the employee's "investment in the contract"

<PAGE>

(adjusted for certain refund provisions) divided by his life expectancy (or
other period for which annuity payments are expected to be made) constitutes a
return of capital each year. The dollar amount of annuity payments received in
any year in excess of such return is taxable as ordinary income. However, for
employees whose annuity starting date is after December 31, 1986, all
distributions will be fully taxable once the employee is deemed to have
recovered the dollar amount of his investment in the contract. Notwithstanding
the above, if the employee's annuity starting date was on or before July 1, 1986
and if his investment in the contract will be recovered within three years of
his annuity starting date, no amount is included in income until he has fully
recovered such investment. For amounts distributed after 1986, new rules
generally provide that all distributions which are not received as an annuity
will be taxed as a pro rata distribution of taxable and non-taxable amounts
(rather than as a distribution first of non-taxable amounts).

If a surrender of or withdrawal from the contract is effected and a distribution
is made in a single payment, the proceeds may qualify for special "lump-sum
distribution" treatment under certain qualified plans, as discussed above.
Otherwise, the amount by which the payment exceeds the "investment in the
Contract" (adjusted for any prior withdrawals) allocated to that payment, if
any, will be taxed as ordinary income in the year of receipt.

Distributions from Section 401(a) Plans, Section 403(b) Plans, IRAs, SEPPs and
Keoghs will be subject to (1) a 10% penalty tax if made before age 59-1/2 unless
certain other exceptions apply, and (2) except during 1997, 1998 and 1999, a 15%
penalty tax on combined annual distributions in excess of $150,000, subject to
various special rules. Failure to meet certain minimum distribution requirements
for the above plans, as well as for Section 457 plans, will result in a 50%
excise tax. Various other adverse tax consequences may also be potentially
applicable in certain circumstances to these types of plans.

Upon an annuitant's death, the taxation of benefits payable to his beneficiary
generally follow these same principles, subject to a variety of special rules.
In particular, tax on death benefits paid as a lump-sum may be deferred if,
within 60 days after the lump-sum becomes payable, the beneficiary instead
elects to receive annuity payments.

OTHER CONSIDERATIONS

It should be understood that the foregoing comments about the federal tax
consequences under these contracts are not exhaustive and that special rules are
provided with respect to other tax situations not discussed herein. Further, the
foregoing discussion does not address any applicable

<PAGE>

state, local, or foreign tax laws. In recent years, numerous changes have been
made in the federal income tax treatment of contracts and retirement plans,
which are not fully discussed above. Before an investment is made in any of the
above plans, a tax adviser should be consulted.

<PAGE>

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 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 with over 1000 companies across 18 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 claims-paying rating is a system of rating insurance company's
financial strength, market leadership, 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.

<PAGE>

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 assessment 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 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 INDEX--broad-based measurement of changes in stock-market
conditions based on the average performance of 500 widely held common stocks;
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. The
index tracks 400 industrial company stocks, 20 transportation stocks, 40
financial company stocks, and 40 public utilities.

NASDAQ-OTC Price Index--this 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)--price-weighted average of 30 actively
traded blue chip stocks, primarily industrials but 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 Variable Annuity
Account and the series funds, Lincoln Life intends to illustrate the advantages
of the contracts in a number of ways:

<PAGE>

COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several advantages of the
variable annuity contract. For example, but not by way of illustration, the
literature may emphasize the potential 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 its account.

DOLLAR-COST AVERAGING ILLUSTRATIONS. These illustrations will generally discuss
the price-leveling effect of making regular purchases in the same subaccounts
over a period of time, to take advantage of the trends in market prices of the
portfolio securities purchased for those subaccounts.

AUTOMATIC WITHDRAWAL SERVICE. A service provided by Lincoln Life, through which
a Contractowner may take any distribution allowed by Code Section 401(a)(9) in
the case of qualified contracts, or permitted under Code Section 72 in the case
of non-qualified contracts, by way of an automatically generated payment.

EARNINGS SWEEP. A service provided by Lincoln Life which allows a client to
designate one of the variable subaccounts or the fixed side of the contract as
a holding account, and to transfer earnings from that account to any other
variable subaccount. The contractowner chooses a specific fund as the holding
account. At specific intervals, account value in the holding account fund that
exceeds a certain designated baseline amount is automatically transferred to
another specific fund(s). The minimum account value required for the Earnings
Sweep feature is $10,000.

Lincoln Life's CUSTOMERS. Sales literature for the Variable Account and the
Series 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 Statement of
Additional Information, Lincoln Life was serving over 9,500 employers and had
more than 750,000 annuity clients.

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 1994 Lincoln Life was the tenth largest U.S.
life insurance company based upon overall assets.

[Financial statements, including auditors report thereon,
to be included in pre-effective amendment]

<PAGE>

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H

REGISTRATION STATEMENT ON FORM N-4

PART C - OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) List of Financial Statements

1. Part A The Table of Condensed Financial Information is included in
Part A of this Registration Statement.

2. Part B The following Financial Statements for the Variable Account are
included in Part B of this Registration Statement:
To be included in Pre-Effective Amendment

3. Part B The following Consolidated Financial Statements and Schedules
of The Lincoln National Life Insurance Company are included in Part B
of the Registration Statement:

To be included in Pre-Effective Amendment

<PAGE>

Item 24. (Continued)

(b) List of Exhibits

(1) Resolutions of the Board of Directors of the Lincoln National Life
Insurance Company establishing Separate Account H are incorporated herein
by reference to Registration Statement on Form N-4 (33-27783) filed on
December 5, 1996.

(2) None.

(3) Underwriting Agreement incorporated by reference to Registration Statement
on Form N-4 (33-27783) filed on December 5, 1996.

(4) Form of Variable Annuity Contract.

(5) Form of application to be filed by pre-effective amendment.

(6) Articles of Incorporation and Bylaws of the Lincoln National Life Insurance
Company are incorporated herein by reference to Registration Statement on
Form N-4 (33-27783) filed on December 5, 1996.

(7) Not applicable.

(8) Services Agreement between the Lincoln National Life Insurance Company and
the Delaware Management Company is incorporated herein by reference to
Registration on Form N-4 (33-27783) filed on December 5, 1996.

(9) Opinion and consent to be filed by pre-effective amendment.

(10) Consent of auditors to be filed by pre-effective amendment.

(11) Not applicable.

(12) Not applicable.

(13) Schedule for computation for performance quotations to be included by
pre-effective amendment.

(14) Other Exhibits:
(a) Organizational Chart of the Lincoln National Insurance
Holding Company System (11/1/96)
(b) Books and Records Report (12/3/96).

Item 25.
DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name Positions and Offices with LNL
- ---- ------------------------------

Jon A. Boscia* President, Chief Executive Officer and Director

Carolyn P. Brody* Vice President

Thomas L. Clagg* Vice President and Associate General Counsel

Kenneth J. Clark* Vice President

Kelly D. Clevenger* Vice President

Jack D. Hunter* Executive Vice President and General Counsel

Lawrence T. Rowland *** Executive Vice President and Director

Keith J. Ryan* Vice President, Chief Financial Officer and
Assistant Treasurer

John L. Steinkamp* Vice President and Associate General Counsel

Roy V. Washington* Vice President and Chief Compliance Officer

Janet C. Whitney** Vice President and Treasurer

C. Suzanne Womack** Secretary and Assistant Vice President

O. Douglas Worthington* Vice President and Controller

<PAGE>

*Principal business address is 1300 South Clinton Street, Fort Wayne, Indiana
46802.
**Principal business address is 200 East Berry Street, Fort Wayne, Indiana
46802-2706.
***Principal business address is 1700 Magnavox Way, One Reinsurance Place,
Fort Wayne, Indiana 46804.
<PAGE>

Item 26.
PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
WITH THE DEPOSITOR OR REGISTRANT

See Exhibit 14(b): Organizational Chart of the Lincoln National Insurance
Holding Company System (11/1/96).

Item 27.
NUMBER OF CONTRACTOWNERS

As of December 2, 1996, there were 223,916 (variable and fixed) contract
owners under Account H.

Item 28. Indemnification

(a) Brief description of indemnification provisions.

In general, Article VII of the By-Laws of The Lincoln National Life
Insurance Company (LNL) provides that LNL will indemnify certain
persons against expenses, judgments and certain other specified costs
incurred by any such person if he/she is made a party or is threatened
to be made a party to a suit or proceeding because he/she was a
director, officer, or employee of LNL, as long as he/she acted in good
faith and in a manner he/she reasonably believed to be in the best
interests of, or not opposed to the best interests of, LNL. Certain
additional conditions apply to indemnification in criminal proceedings.

In particular, separate conditions govern indemnification of directors,
officers, and employees of LNL in connection with suits by, or in the
right of, LNL.

Please refer to Article VII of the By-Laws of LNL (Exhibit No. 6(b)
hereto) for the full text of the indemnification provisions.
Indemnification is permitted by, and is subject to the requirements of,
Indiana law.

(b) Undertaking pursuant to Rule 484 of Regulation C under the Securities
Act of 1933:

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item
28(a) above or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.

Item 29. Principal Underwriter

(a) American Funds Distributors, Inc., is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American
Funds Income Series, The American Funds Tax-Exempt Series I, The
American Funds Tax-Exempt Series II American High-Income Municipal Bond
Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The
Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World
Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash
Management Trust of America, EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of
America, Inc., Intermediate Bond Fund of America, The Investment
Company of America, Limited Term Tax-Exempt Bond Fund of America, The
New Economy Fund, New Perspective Fund, Inc., The Tax-Exempt Bond Fund
of America, Inc., The Tax-Exempt Money Fund of America, The U.S.
Treasury Money Fund of America, Washington Mutual Investors Fund, Inc.
and SMALLCAP World Fund, Inc.

(b)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter

*David L. Abzug Regional Vice President
5657 Limona Avenue
Van Nuys, CA 91411

John A. Agar Regional Vice President
1501 N. University Drive
Madison, WI 53711
<PAGE>

Robert B. Aprison Regional Vice President
2983 Bryn Wood Drive
Madison, WI 53711

#Richard Armstrong Assistant Vice President

*William W. Bagnard Vice President

Steven L. Barnes Vice President
8000 Town Line Avenue South
Suite 204
Minneapolis, MN 55438

Michelle A. Bergeron Regional Vice President
1190 Rockmart Circle
Kennesaw, GA 30144
<PAGE>

Item 29. Principal Underwriter (continued)

(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ---------------------

Joseph T. Blair Vice President
27 Drumlin Road
West Simsbury, CT 06092

Ian B. Bodell Senior Vice President

3100 West End Avenue, Suite 870
Nashville, TN 37215

Michael L. Brethower Vice President
108 Hagen Court
Georgetown, TX 78628

C. Alan Brown Regional Vice President
4619 McPherson Avenue
St. Louis, MO 63108

*Daniel C. Brown Director and Senior Vice President

@J. Peter Burns Vice President

Brian C. Casey Regional Vice President
9508 Cable Drive
Kensington, MO 20895

Victor C. Cassato Vice President
999 Green Oaks Drive
Littleton, CO 80121

Christopher J. Cassin Regional Vice President
231 Burlington
Clarendon Hills, IL 60514

Denise M. Cassin Regional Vice President
1301 Stoney Creek Drive
San Ramon, CA 94538
<PAGE>

*Larry P. Clemmensen Director and Treasurer

*Kevin G. Clifford Senior Vice President

Ruth M. Collier Vice President
145 West 67th Street, Suite 12K
New York, NY 10023

Thomas E. Cournoyer Vice President
2333 Granada Boulevard
Coral Gables, FL 33134

Douglas A. Critchell Vice President
4116 Woodbine St.
Chevy Chase, MD 20815

*Carl D. Cutting Vice President

Michael A. Dilella Vice President
P.O. Box 661
Ramsey, NJ 07446
<PAGE>

Item 29. Principal Underwriters (continued)

(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- --------------------- ---------------------

G. Michael Dill Senior Vice President
3622 E. 87th Street
Tulsa, OK 74137

Kirk D. Dodge Regional Vice President
2617 Salisbury Road
Ann Arbor, MI 48103

Peter J. Doran Senior Vice President
1205 Franklin Avenue
Garden City, NY 11530

*Michael J. Downer Secretary

Robert W. Durbin Vice President
74 Sunny Lane
Tiffin, OH 44883

&Lloyd G. Edwards Vice President

*Paul H. Fieberg Senior Vice President

*Mark P. Freeman, Jr. Director and President

John Foder Regional Vice President
15 Latisquana Road
Southborough, MA 01772

Clyde E. Gardner Vice President
Route 2, Box 3162
Osage Beach, MO 65065

#Evelyn K. Glassford Vice President

Jeffrey J. Greiner Regional Vice President
5898 Heather Glen Court
<PAGE>

Dublin, OH 43017

*Paul G. Haaga, Jr. Director

David E. Harper Vice President
R.D.1, Box 210, Rte 519

Frenchtown, NJ 08825

Ronald R. Hulsey Regional Vice President
6744 Avalon
Dallas, TX 75214

*Robert L. Johansen Vice President and Controller

Michael J. Johnston Chairman of the Board
630 Fifth Ave., 36th Floor
New York, NY 10111

Victor J. Kriss Senior Vice President
P. O. Box 274
Surfside, CA 90743

Arthur J. Levine Vice President
12558 Highlands Place
Fishers, IN 46038
<PAGE>

Item 29. Principal Underwriters (continued)

(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ------------------------
#Karl A. Lewis Assistant Vice President

T. Blake Liberty Regional Vice President

12585-E East Tennessee Circle
Aurora, CO 80012

Stephen A. Malbasa Regional Vice President
13405 Lake Shore Boulevard
Cleveland, OH 44110

Steven M. Markel Senior Vice President
5241 South Race St.
Littleton, CO 80121

*John C. Massar Senior Vice President

%John V. McLaughlin Senior Vice President

*E. Lee McClennahan Senior Vice President

Laurie B. McCurdy Regional Vice President

3500 W. Camino de Urania
Tucson, AZ 85255

Terry W. McNabb Vice President
2002 Barrett Station Road
St. Louis, MO 63131

*R. William Melinat Vice President
Institutional Investment
Services Division

David R. Murray Regional Vice President
25701 S. E. 32nd Place
Issaquah, WA 98027
<PAGE>

Stephen S. Nelson Vice President
7215 Trevor Road
Charlotte, NC 28226

William E. Noe Regional Vice President
304 River Oaks Road
Brentwood, TN 37027

Peter A. Nyhhus Regional Vice President
3084 Wilds Ridge Court
Prior Lake, MN 55372

Eric P. Olson Regional Vice President
62 Park Drive
Glenview, IL 60025

Frederic Phillips Regional Vice President
32 Ridge Avenue
Newton Centre, MA 02159

#Candance D. Pilgrim Assistant Vice President
<PAGE>

Item 29. Principal Underwriters (continued)
- -------

(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ---------------------

Carl S. Platou Regional Vice President
4021 96th Avenue, SE
Mercer Island, WA 98040

*John O. Post, Jr. Vice President

Steven J. Reitman Vice President
212 The Lane
Hinsdale, IL 60521

Brian A. Roberts Regional Vice President
12025 Delmahoy Drive
Charlotte, NC 28277

George S. Ross Vice President
55 Madison Avenue
Morristown, NJ 07962

*Julie D. Roth Vice President

*James F. Rothenberg Director

Douglas F. Rowe Regional Vice President
30309 Oak Tree Drive
Georgetown, TX 78628

Christopher Rowey Regional Vice President

9417 Beverlywood Street
Los Angeles, CA 90034

Dean B. Rydquist Vice President

1080 Bay Pointe Crossing
Alpharetta, GA 30202

Richard R. Samson Vice President
4604 Glencoe Ave., #4
<PAGE>

Marina Del Rey, CA 90292

Joe D. Scarpitti Regional Vice President
25760 Kensington Dr.
Westlake, OH 44145

*R. Michael Shanahan Director

David W. Short Senior Vice President
1000 RIDC Plaza, Suite 212
Pittsburgh, PA 15238

*Victor S. Sidhu Vice President
Institutional Investment Services
Division

William P. Simon, Jr. Vice President
554 Canterbury Lane
Berwyn, PA 19312

*John C. Smith Assistant Vice President
Institutional Investment Services
Division

*Mary E. Smith Assistant Vice President
Institutional Investment Services
Division

Rodney G. Smith Regional Vice President
2350 Lakeside Blvd., #850
Richardson, TX 75082

Nicholas D. Spadaccini Regional Vice President
855 Markley Woods Way
Cincinnati, OH 45230
<PAGE>

Item 29. Principal Underwriters (continued)
- --------
(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ---------------------

Daniel S. Spradling Senior Vice President
#4 West Fourth Avenue, Suite 406
San Mateo, CA 94402

Thomas A. Stout Regional Vice President
12913 Dendale Lane
Bowie, MD 20715

Craig R. Strausser Regional Vice President
17040 Summer Place
Lake Oswego, OR 97035

Francis N. Strazzeri Regional Vice President
31641 Saddletree Drive
Westlake Village, CA 91361

#James P. Toomey Assistant Vice President

&Christopher E. Trede Assistant Vice President

George F. Truesdail Vice President
400 Abbotsford Court
Charlotte, NC 28270

Scott W. Ursin-Smith Regional Vice President
606 Glenwood Avenue
Mill Valley, CA 94941

@Andrew J. Ward Vice President

*David M. Ward Assistant Vice President
Institutional Investment Services
Division

Thomas E. Warren Regional Vice President

4001 Crockers Lake Blvd.
Sarasota, FL 34238

*J. Kelly Webb Senior Vice President
<PAGE>

Gregory J. Weimer Regional Vice President
125 Surrey Drive
Canonsburg, PA 15317

#Timothy W. Weiss Director

**N. Dexter Williams Vice President

Timothy J. Wilson Regional Vice President
113 Farmview Place
Venetia, PA 15367

*Marshall D. Wingo Senior Vice President

*Robert L. Winston Director and Senior Vice President

William Yost Regional Vice President
9320 Overlook Trail
Eden Prairie, MN 55347

Janet M. Young Regional Vice President
1616 Vermont
Houston, TX 77006

*Business Address, 333 South Hope Street, Los Angeles, CA 90071

**Business Address, Four Embarcadero, Suite 1800, San Francisco, CA 94111
#Business Address, 135 South State College Boulevard, Brea, CA 92621
%Business Address, 8000 IH-10, Suite 1400, San Antonio, TX 78230
@Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
&Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240

Item 32. Undertakings
- ---------------------

(a) Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted.

(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a Certificate or an Individual Contract offered by
the Prospectus, a space that an applicant can check to request a Statement
of Additional Information, or (2) a post card or similar written
communication affixed to or included in the Prospectus that the applicant
can remove to send for a Statement of Additional Information.

(c) Registrant undertakes to deliver any Statement of Additional Information
and any financial statements required to be made available under this Form
promptly upon written or oral request to Lincoln Life at the address or
phone number listed in the Prospectus.

(d) The Lincoln National Life Insurance Company hereby represents that the fees
and charges deducted under the contract, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred,
and the risks assumed by The Lincoln National Life Insurance Company.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant duly has caused this Registration
Statement to be signed on its behalf, in the City of Fort Wayne, and the State
of Indiana on this 20th day of December, 1996.

LINCOLN NATIONAL VARIABLE ANNUITY
ACCOUNT H, (Registrant)

By: /s/ Stephen H. Lewis
-------------------------------------
Stephen H. Lewis
(Signature-Officer of Depositor)
Senior Vice President, LNL
(Title)

By: THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (LNL)
(Depositor)

By: /s/ Jon A. Boscia
-------------------------------------
Jon A. Boscia
President
(Title)

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----

/s/ Jon A. Boscia President, Chief Executive December 20, 1996
- ----------------- Officer & Director -----------------
Jon A. Boscia (Principal Executive
Officer)

/s/ Ian M. Rolland
- ---------------------- Director December 20, 1996
Ian M. Rolland -----------------

/s/ O. Douglas Worthington Vice President and Controller December 20, 1996
- -------------------------- -----------------
O. Douglas Worthington

/s/ Keith J. Ryan
- ---------------------- Vice President, and Assistant December 20, 1996
Keith J. Ryan Treasurer and Chief -----------------
Financial Officer (Principal
Financial Officer)

- ---------------------- Executive Vice President
Lawrence T. Rowland and Director ---------------

/s/ Richard C. Vaughan
- ---------------------- Director December 20, 1996
Richard C. Vaughan -----------------

- ---------------------- Director
H. Thomas McMeekin ----------------

/s/ Jack D. Hunter
- ---------------------- Executive Vice President, December 20, 1996
Jack D. Hunter General Counsel & Director -----------------

<PAGE>

ARTICLE 1
DEFINITIONS

ACCOUNT or VARIABLE ACCOUNT -- The segregated investment account into which
Lincoln National Life Insurance Company sets aside and invests the variable
assets attributable to this Variable Annuity Contract.

ACCUMULATION UNIT -- A unit of measure used to calculate the variable Contract
Value during the accumulation period.

ANNUITANT -- The person upon whose life the annuity benefit payments made after
the Annuity Commencement Date will be based.

ANNUITY COMMENCEMENT DATE -- The Valuation Date when the funds are withdrawn for
payment of annuity benefits under the Annuity Payment Option selected.

ANNUITY PAYMENT OPTION -- An optional form of payment of the annuity provided
for under this Contract.

ANNUITY UNIT -- A unit of measure used after the Annuity Commencement Date to
calculate the amount of variable annuity payments.

BENEFICIARY -- The person designated by the Owner to receive the Death Benefit,
if any, payable upon the death of the Owner.

CODE -- The Internal Revenue Code (IRC) of 1986, as amended.

CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Charges assessed on premature
surrender of the Contract, calculated according to the Contract provisions.

CONTRACT -- The Agreement between LNL and the Owner providing a variable
annuity.

CONTRACT VALUE -- The sum of the values of all the Accumulation Units
attributable to this Contract at a given time and the value of monies in the
Fixed Account.

CONTRACT YEAR -- The period from the Contract effective date (month and day) to
the anniversary of the Contract effective date in the following year.

DEATH BENEFIT -- The amount payable to the Owner's designated Beneficiary upon
death of the Owner.

FUND -- Underlying investment options available in the Series.

FIXED ACCOUNT -- The fixed portion of this Contract which is invested in the
General Account of LNL.

HOME OFFICE -- The principal office of LNL located at 1300 South Clinton Street,
Fort Wayne, Indiana 46801.

LNL -- The Lincoln National Life Insurance Company.

MATURITY DATE -- The date specified on Page 3 of this Contract.

OWNER -- The individual or entity who exercises rights of ownership under this
contract.

PURCHASE PAYMENTS -- Amounts paid into this Contract.

QUALIFIED PLAN -- A retirement plan qualified for special tax treatment under
the Internal Revenue Code of 1986, as amended, including Sections 401, 403, 408
and 457.

SERIES -- American Variable Insurance Series, the Mutual Fund into which
Purchase Payments allocated to the Variable Account are invested.

SUB-ACCOUNT -- That portion of the Variable Account which pertains to
investments in the Accumulation Units of a particular Fund.

VALUATION DATE -- Close of the market of each day that the New York Stock
Exchange is open for business.

VALUATION PERIOD -- The period commencing at the close of business on a
particular Valuation Date and ending at the close of business on the next
succeeding Valuation Date.

<PAGE>

ARTICLE 2
PURCHASE PAYMENTS, OPTIONS, AND
BENEFITS

2.01 WHERE PAYABLE

All Purchase Payments must be made to LNL at its Home Office.

2.02 AMOUNT AND FREQUENCY

Purchase Payments are made in an amount and at the frequency shown on page 3.
The Owner may change the frequency or amount of Purchase Payments subject to
LNL's rules in effect at the time of the change.

The minimum initial Purchase Payment is $1,500 for Non-Qualified Plans and $300
for Qualified Plans. The minimum annual amount of subsequent Purchase Payments
is $300 for either Non-Qualified Plans or Qualified Plans. The minimum payment
to the Contract at any one time must be at least $25.00 if transmitted
electronically; otherwise the minimum amount is $100.00.

Purchase Payments may be made until the earliest of the Annuity Commencement
Date or the Surrender of the Contract.

2.03 VARIABLE ACCOUNT

Purchase Payments under the Contract may be allocated to the Lincoln National
Variable Annuity Account H (Variable Account) and/or to the fixed portion of the
Contract. The Variable Account is for the exclusive benefit of persons entitled
to receive benefits under variable annuity contracts. The Variable Account will
not be charged with the liabilities arising from any other part of LNL's
business. There are currently nine Sub-accounts in the Variable Account
available to the Owner. The Owner may direct Purchase Payments under the
Contract to any of the available Sub-accounts subject to the following
limitations. A minimum payment to any one Sub-account must be at least $20. If
the Owner elects to direct Purchase Payments to a new Sub-account not previously
selected, the election must be in writing to LNL or by telephone transfer
provided LNL has received the appropriate authorization. The amounts allocated
to each Sub-account will be invested at net asset value in the shares of one of
the Funds of the American Variable Insurance Series (Series). The Funds are:

1. Growth Fund
2. International Fund
3. [New Fund]
4. Growth-Income Fund
5. Asset Allocation Fund
6. High-Yield Bond Fund
7. Bond Fund
8. U.S. Government/AAA-Rated Securities Fund
9. Cash Management Fund
10. Other funds made available by LNL.

LNL reserves the right to eliminate the shares of any Fund and substitute the
securities of a different Fund or investment company or mutual fund if the
shares of a Fund are no longer available for investment, or, if in the judgment
of LNL, further investment in any Fund should become inappropriate in view of
the purposes of the Contract. LNL may add a new Sub-account in order to invest
the assets of the Variable Account into a Fund. LNL shall give the Owner written
notice of the elimination and substitution of any Fund within fifteen days after
such substitution occurs.

LNL shall use each Purchase Payment allocated to the Variable Account by the
Owner to buy Accumulation Units in the Sub-account(s) selected by the Owner. The
number of Accumulation Units bought shall be determined by dividing the amount
directed to the Sub-account by the dollar value of an Accumulation Unit in such
Sub-account as of the point of the next valuation of such Sub-account
immediately following receipt of the Purchase Payment at the Home Office of LNL.
The number of Accumulation Units held for the account of an Owner shall not be
changed by any change in the dollar value of Accumulation Units in any Sub-
account.

2.04 VALUATION OF ACCUMULATION UNITS

The variable Contract Value of an Owner's Contract at any time prior to the
Annuity Commencement Date equals the sum of the values of the Accumulation Units
credited in the Variable Account under the Contract.

The value of a Sub-account is the number of units in the Sub-account multiplied
by the value of an Accumulation Unit in the Sub-account.

<PAGE>

Accumulation Units for each Sub-account are valued separately. Initially, the
value of an Accumulation Unit was set at $1.00. Thereafter, the value of an
Accumulation Unit in any Sub-account on any Valuation Date equals the value of
an Accumulation Unit in that Sub-account as of the immediately preceding
Valuation Date, multiplied by the "Net Investment Factor" of that Sub-account
for the current Valuation Period.

The Net Investment Factor is an index which measures the investment performance
of a Sub-account from one Valuation Period to the next. The Net Investment
Factor for any Sub-account for any Valuation Period is equal to (1) divided by
(2) and subtracting (3) from the result, where:

(1) is the result of:

(a) the Net Asset Value Per Share of the Fund held in the Sub-account,
determined at the end of the current Valuation Day; plus

(b) the per share amount of any dividend or capital gain distribution made
by the Fund in the Sub-account, if the "ex-dividend" date occurs during the
Valuation Period; plus or minus

(2) is the Net Asset Value Per Share of the Fund held in the Sub-account,
determined at the end of the prior Valuation Day;

(3) is a daily factor representing the mortality and expense risk and
administrative charge deducted from the Sub-account adjusted for the number of
days in the Valuation Period. On an annual basis, this charge will not exceed
1.40%. For any period in which the Enhanced Guaranteed Minimum Death Benefit
(see Section 2.12) is not in effect, on an annual basis, this charge will not
exceed 1.25%.

The unit values may increase or decrease the dollar value of benefits under the
Contract. The dollar value of benefits will not be adversely affected by
expenses incurred by LNL.

2.05 FIXED ALLOCATIONS

Purchase Payments under the Contract may be allocated to the Variable Account
and/or to the fixed portion of the Contract. A minimum allocation to the fixed
portion must be at least $20.

2.06 CREDITING OF INTEREST ON FIXED ALLOCATIONS

Interest shall be credited daily on all Purchase Payments that are allocated to
the fixed portion of this Contract.

Prior to the Annuity Commencement Date, payment of any Death Benefit, or
surrender of this Contract, whichever occurs first, LNL guarantees that it will
credit interest on fixed allocations at an effective annual rate not less than
3.0% during all years. A table of guaranteed values for the fixed allocations
may be found in Article 8.

LNL may credit interest at rates in excess of the guaranteed rates at any time.

2.07 AUTOMATIC NONFORFEITURE OPTION

In the event that Purchase Payments are stopped, this Contract will continue as
a paid-up Contract until the earlier of the Maturity Date, surrender of the
Contract, payment of any Death Benefit, or the Annuity Commencement Date.
Purchase Payments may be resumed at any time prior to the Maturity Date,
surrender of the Contract, payment of any Death Benefit, or the Annuity
Commencement Date. LNL reserves the right to surrender this Contract in
accordance with the terms set forth in the nonforfeiture law for individual
deferred annuities applicable in your state.

2.08 TRANSFERS

Prior to the earlier of the Maturity Date, surrender of the Contract, payment of
any Death Benefit, or the Annuity Commencement Date, the Owner may direct a
transfer of assets from one Sub-account to another Sub-account or to the fixed
portion of the Contract. The Owner may also direct a transfer of assets from the
fixed portion of the Contract to one or more Sub-accounts of the Variable
Account. Such a transfer request must be in writing or by telephone provided LNL
has received the appropriate authorization by the Owner. Amounts transferred to

<PAGE>

the Sub-account(s) will purchase Accumulation Units as described in Section
2.03.

A transfer will result in the purchase of Accumulation Units in one Sub-account
and the redemption of Accumulation Units in the other Sub-account. Such a
transfer will be accomplished at relative Accumulation Unit values as of the
Valuation Date the transfer request is received. The valuation of Accumulation
Units is described in Section 2.04.

LNL reserves the right to impose a charge in the future for transfers between
Sub-accounts.

The minimum transfer amount is $300 or the entire amount in the Sub-
account/fixed portion, whichever is less. If, after the transfer, the amount
remaining under this Contract in the Sub-account/fixed portion from which the
transfer is taken is less than $300, the entire amount held in that Sub-
account/fixed portion will be transferred with the transfer amount.

For transfers between Sub-accounts and from the Sub-account(s) to the fixed
portion of the Contract, there are no restrictions on the maximum amount which
may be transferred. For transfers from the fixed portion of the Contract to the
Variable Account, the sum of the percentages of fixed value transferred will be
limited to 25% in any 12 month period. Transfers cannot be made during the first
30 days after the issue date of the Contract and no more than six transfers will
be allowed in any Contract Year. LNL reserves the right to waive any of these
restrictions.

2.09 WITHDRAWAL OPTION

The Owner may withdraw a part of the surrender value of this Contract, subject
to the charges outlined under Surrender Option (see Section 2.10). The first
four partial withdrawals of Contract Value during a Contract Year will be free
of Contingent Deferred Sales Charges to the extent that the sum of the
percentages of the Contract Value withdrawn does not exceed 10%. Withdrawals
will be treated as first in-first out (FIFO) for purposes of calculating the
Contingent Deferred Sales Charge (see Section 2.11). Withdrawal will be
effective on the Valuation Date on which LNL receives a written request at its
Home Office. The minimum withdrawal is $300. LNL reserves the right to surrender
this Contract if any withdrawal reduces the total account value to a level in
which this Contract may be surrendered in accordance with the terms set forth in
the nonforfeiture law for individual deferred annuities in your state. LNL may
surrender the Contract for its surrender value. The remaining value will be
subject to the charges as provided under Surrender Option (see Section 2.10).
The request should specify from which Sub-account the withdrawal will be made.
If no Sub-account is specified, LNL will withdraw, on a pro-rata basis from each
Sub-account, the amount requested. Any cash payment will be mailed from LNL's
Home Office within seven days after the date of withdrawal; however, LNL may be
permitted to defer such payment under the Investment Company Act of 1940, as in
effect at the time such request for withdrawal is received.

For purposes of this Section, the fixed portion of the Contract is considered a
Sub-account.

The Withdrawal Option is not available after the Annuity Commencement Date.

2.10 SURRENDER OPTION

The Owner may surrender this Contract for its surrender value. On surrender,
this Contract terminates. Surrender will be effective on the Valuation Date on
which LNL receives a written request at its Home Office. The surrender value
will be the total Contract Value on the Valuation Date, less a Contingent
Deferred Sales Charge.

Any cash payment will be mailed from LNL's Home Office within seven days after
the date of surrender; however, LNL may be permitted to defer such payment under
the Investment Company Act of 1940, as in effect at the time a request for
surrender is received.

The Surrender Option is not available after the Annuity Commencement Date.

2.11 CONTINGENT DEFERRED SALES CHARGE

The Contingent Deferred Sales Charge (CDSC) is calculated separately for each
Contract Year's Purchase Payments to which a charge applies. Charges are applied
as follows:

<PAGE>

Number of complete Contract Years that
a Purchase Payment has been invested.

Less
than At least
2 Years 2 3 4 5 6 7+

CDSC as a percentage 6% 5 4 3 2 1 0%
of the surrendered or
withdrawn Purchase
Payments.

A CDSC will be waived under certain circumstances (see Section 2.14 for
details).

For purposes of calculating CDSC, LNL assumes that Purchase Payments are
withdrawn on a "first in-first out (FIFO) basis," and that all Purchase Payments
are withdrawn before any earnings are withdrawn.

<PAGE>

2.12 DEATH BENEFITS

Before the Annuity Commencement Date.

Entitlement.

If there is a single Owner, upon the death of the Owner LNL will pay a Death
Benefit to the designated Beneficiary(s).

If there are Joint Owners, upon the death of the first Joint Owner, LNL will pay
a Death Benefit to the surviving Joint Owner. However, if the surviving Joint
Owner is the spouse of the deceased Joint Owner such spouse may continue the
Contract as sole Owner. Upon the death of the spouse who continues the Contract,
LNL will pay a Death Benefit to the designated Beneficiary(s).

The Death Benefit will be paid if LNL is in receipt of: (1) proof, satisfactory
to LNL, of the death; (2) written authorization for payment; and (3) all claim
forms, fully completed.

Due proof of death may be a certified copy of a death certificate, a certified
copy of the statement of death from the attending physician, a certified copy of
a decree of a court of competent jurisdiction as to the findings of death, or
any other proof of death acceptable to LNL.

All Death Benefit payments will be subject to the laws and regulations governing
death benefits.

Notwithstanding any provision of this Contract to the contrary, no payment of
Death Benefits provided under the Contract will be allowed that does not satisfy
the requirements of Code Section 72(s) or 401(a)(9) as applicable, as amended
from time to time.

Determination of Amounts.

This Contract provides a DEATH BENEFIT EQUAL TO THE CONTRACT SURRENDER VALUE, OR
THE CONTRACT VALUE, OR an Enhanced Guaranteed Minimum Death Benefit (EGMDB).

The EGMDB will not be in effect if this Contract is issued to an Owner with an
attained age of 75 or greater at issue. Under these circumstances, there will
be no EGMDB provided.

The EGMDB will only be in effect, UNLESS TERMINATED BY THE OWNER, for
Non-Qualified Contracts and Contracts sold as Individual Retirement Annuities
(IRA) under Code Section 408.

Upon the death of the sole Owner, this Contract provides a Death Benefit of an
EGMDB, if still in effect. If the EGMDB has been terminated by the Owner prior
to the Owner's death, the Death Benefit is equal to the Contract Value.

If there are Joint Owners, upon the death of the first Joint Owner, this
Contract will provide a Death Benefit of the Contract surrender value to the
surviving Joint Owner. If the surviving Joint Owner is the spouse of the
deceased Joint Owner, the surviving spouse may continue the Contract in lieu of
receiving the Death Benefit.

IF THE CONTRACT IS CONTINUED BY THE SPOUSE OF THE DECEASED JOINT OWNER, THEN
UPON THE DEATH OF THE SPOUSE WHO CONTINUED THE CONTRACT, THIS CONTRACT PROVIDES
A DEATH BENEFIT OF AN EGMDB, IF STILL IN EFFECT. IF THE EGMDB HAS BEEN
TERMINATED PRIOR TO THE DEATH OF THE SPOUSE WHO CONTINUED THE CONTRACT, THIS
CONTRACT PROVIDES A DEATH BENEFIT OF THE CONTRACT VALUE.

If the EGMDB is in effect and payable as described above, LNL will pay to the
designated Beneficiary(s) a Death Benefit equal to the greater of:

(a) the current Contract Value as of the date on which the death claim is
approved by LNL for payment; or

(b) the highest Contract Value at the time of fund valuation on any policy
anniversary date (including the inception date) on ages up to, and including,
the Owner's age 75. The highest Contract Value is increased by purchase
payments and is decreased by partial withdrawals, partial annuitizations, and
premium tax made, effected, or incurred subsequent to such anniversary date on
which the highest Contract Value is obtained.

At any time prior to the Annuity Commencement Date, an Owner may choose to
terminate the EGMDB by giving written notice to LNL, and will them have no
EGMDB. The EGMDB will terminate on the next Valuation Date following receipt of
the written notice in the LNL Home Office. Termination of the EGMDB by the Owner
will be permanent and final.

If the Owner is a corporation or other non-individual (non-natural person), the
death of the Annuitant will be treated as the death of the Owner. The EGMDB
will apply on the death of the Annuitant only in this situation.

Payment of Amounts.

THE DEATH BENEFIT PAYABLE ON THE DEATH OF THE OWNER, OR AFTER THE DEATH OF THE
FIRST JOINT OWNER, OR UPON THE DEATH OF THE SPOUSE WHO CONTINUES THE CONTRACT,
WILL BE DISTRIBUTED TO THE DESIGNATED BENEFICIARY(S) AS FOLLOWS:

(a) the Death Benefit must be completely distributed within five years of the
Owner's date of death; or

(b) the designated Beneficiary may elect, within the one year period after the
Owner's date of death, to receive the Death Benefit in substantially equal
installments over the life of such designated Beneficiary or over a period not
extending beyond the life expectancy of such designated Beneficiary; provided
that such distributions begin not later than one year after the Owner's date of
death.

If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by LNL of the claim. This payment may be postponed as permitted
by the Investment Company Act of 1940.

If the designated Beneficiary of the Death Benefit proceeds is the surviving
spouse of the deceased Owner, the surviving spouse may elect to continue the
Contract as the new Owner if the election is made within one year of the death
of the Owner.

On or After the Annuity Commencement Date.

If the Owner dies on or after the Annuity Commencement Date, the remaining
annuity payments, if any, will be paid to the designated Beneficiary according
to the previously selected Annuity Payment Option. If Joint Owners exist, upon
the death of the first Joint Owner, annuity payments, if any, will continue to
the surviving Joint Owner according to the previously selected Annuity Payment
Option.

2.13 DEATH OF ANNUITANT

If the Annuitant is also the Owner or a Joint Owner, then the Death Benefit paid
will be subject to the Contract provisions regarding death of the Owner. If the
surviving spouse of the Owner/Annuitant assumes the Contract, the Contingent
Annuitant becomes the Annuitant. If no Contingent Annuitant is named, the
surviving spouse becomes the Annuitant.

If an Annuitant who is not the Owner or Joint Owner dies, then the Contingent
Annuitant, if any, becomes the Annuitant. If no Contingent Annuitant is named,
the Owner (or the younger of the Joint Owners) becomes the Annuitant.

2.14 WAIVER OF CONTINGENT DEFERRED SALES CHARGES

A surrender of this Contract or withdrawal of Contract Value prior to the
Annuity Commencement Date may be subject to a Contingent Deferred Sales Charge
as described in Sections 2.09 and 2.10, except that such charges do not apply
to: (1) the first four withdrawals of Contract Value during a Contract Year to
the extent that the sum of the percentages of the Contract Value withdrawn by
the first four withdrawals does not exceed 10% (this 10% withdrawal exception
does not apply to a surrender of a Contract); (2) a surrender of the Contract as
a result of "permanent and total disability" of the Owner as defined in section
22(e)(3) of the Internal Revenue Code subsequent to the effective date of this
Contract and prior to the 65th birthday of the Owner; (3) when the surviving
spouse assumes ownership of the Contract as a result of the death of the
original Owner (in such case, the CDSC would be waived on the Contract Value as
of the date which the surviving spouse assumed the Contract ownership); however,
this does not apply if the spouses were Joint Owners; (4) a surrender of this
Contract as a result of 90 days of continuous confinement of the Owner in an
accredited nursing home or equivalent health care facility; (5) a surrender of
this Contract as a result of terminal illness of the Owner that results in a
life expectancy of less than one year as determined by a qualified professional
medical practitioner; (6) a surrender of the Contract as a result of the death
of the Owner; and (7) annuitization.

The Contingent Deferred Sales Charge will only be waived if LNL is in receipt of
proof, satisfactory to LNL, of the exception.

If a non-natural person is the Owner of the Contract,
<PAGE>

the Annuitant will be considered the Owner of the Contract for purposes of this
Section 2.14.

If a Joint Owner exists on the Contract, both the Joint Owners must meet one of
the exceptions for waiver of the CDSC.

ARTICLE 3
ANNUITY PAYOUT OPTION BENEFITS

3.01 ANNUITY PAYMENTS

An election to receive payments under an Annuity Payment Option must be made by
the Maturity Date.

If an Annuity Payment Option is not chosen prior to the Maturity Date, payments
will commence to the Owner on the Maturity Date under the Annuity Payment Option
providing a Life Annuity with Annuity Payments guaranteed for 10 years.

The Maturity Date is set forth on Page 3. Upon written request by the Owner and
any Beneficiary who cannot be changed, the Maturity Date may be deferred.
Purchase Payments may be made until the new Maturity Date.

3.02 CHOICE OF ANNUITY PAYMENT OPTION

By Owner

Prior to the Annuity Commencement Date, the Owner may choose or change any
Annuity Payment Option, if that right has been reserved. For a 100% fixed
annuity benefit payment, the Annuity Commencement Date must be at least thirty
days prior to the time annuity payments are to begin.

By Beneficiary

At the time proceeds are payable to a Beneficiary, a Beneficiary may choose or
change any Annuity Payment Option that meets the requirements of Code Section
72(s) or 401(a)(9) if proceeds are available to the Beneficiary in a lump sum.

A choice or change must be in writing to LNL.

After the Annuity Commencement Date, the Annuity Payment Option may not be
changed.

3.03 ANNUITY PAYMENT OPTIONS

a) Life Annuity /Life Annuity with Guaranteed Period-- Payments will be made for
life with no certain period, or life and a 10 year certain period, or life and a
20 year certain period.

b) Unit Refund Life Annuity -- An annuity payable monthly during the lifetime of
the Annuitant with the guarantee that upon death a payment will be made of the
value of the number of Annuity Units equal to the excess, if any, of (a) over
(b) where (a) is the total amount applied under the option divided by the
Annuity Unit Value at the Annuity Commencement Date and (b) is the product of
the number of Annuity Units represented by each payment and the number of
payments paid prior to death.

c) Joint Life Annuity/Joint Life Annuity with Guaranteed Period -- Payments will
be made during the joint life of the Annuitant and a Joint Annuitant of the
Owner's choice. Payments will be made for life with no certain period, or life
and a 10 year certain period, or life and a 20 year certain period. Payments
continue for the life of the survivor at the death of the Annuitant or Joint
Annuitant.

d) Other options may be available as agreed upon in writing by LNL.

At the time Annuity Payments start under the provisions of this Contract, the
Owner may elect to have the total Contract Value applied to provide a variable
annuity, a fixed annuity, or a combination fixed and variable annuity. If no
election is made, the value of the Owner's Variable Account shall be used to
provide a variable annuity, and the value of the Owner's fixed allocations shall
be used to provide a fixed annuity.

The amount of Annuity Payment will depend on the age and sex (except in cases
where unisex rates are required) of the Annuitant as of the Annuity Commencement
Date. A choice may be made to receive payments once each month, four times each
year, twice each year, or once each year. The Contract Value and Annuity Unit
Value used to effect benefit payments will be calculated as of the Annuity
Commencement Date. If any portion of the annuity benefit payment will be on a
variable basis, the first

<PAGE>

payment will be made fourteen days after the Annuity Commencement Date.

Article 6 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the first monthly payment under a
variable payment option. The tables show the dollar amount of the first monthly
payment which can be purchased with each $1,000 of Contract Value, after
deduction of any applicable premium taxes. Amounts shown use the 1983 'a'
Individual Annuity Mortality Table, modified, with an assumed rate of return of
4% per year.

Article 7 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the monthly payments under a fixed
payment option. The tables show the dollar amount of the guaranteed monthly
payments which can be purchased with each $1,000 of Contract Value, after
deduction of any applicable premium tax. Amounts shown use the 1983 'a'
Individual Annuity Mortality Table, modified, with an interest rate of 3.0% per
year and a 2.0% expense load.

3.04 DETERMINATION OF THE AMOUNT OF VARIABLE ANNUITY PAYMENTS AFTER THE FIRST
PAYMENT

The first variable annuity payment is sub-divided into components each of which
represents the product of: (a) the percentage elected by the Contract Owner of a
specific Sub-account the performance of which will determine future variable
annuity payments, and (b) the entire first variable annuity payment. Each
Variable annuity payment after the first payment attributable to a specific Sub-
account will be determined by multiplying the Annuity Unit Value for that Sub-
account for the date each payment is due by a constant number of Annuity Units.
This constant for each specific Sub-account is determined by dividing the
component of the first payment attributable to such Sub-account as described
above by the Annuity Unit Value for that Sub-account for the date the first
payment is due. The total variable annuity payment will be the sum of the
payments attributable to each Sub-account.

The Annuity Unit Value for any Valuation Period for any Sub-account is
determined by multiplying the Annuity Unit Value for the immediately preceding
Valuation Period by the product of (a) 0.9998926 raised to a power equal to the
number of days in the current Valuation Period and (b) the Net Investment Factor
of the Sub-account for the Valuation Period for which the Annuity Unit Value is
being determined.

The valuation of all assets in the Sub-account shall be determined in accordance
with the provisions of applicable laws, rules, and regulations. The method of
determination by LNL of the value of an Accumulation Unit and of an Annuity Unit
will be conclusive upon the Owner and any Beneficiary.

LNL guarantees that the dollar amount of each installment after the first shall
not be affected by variations in mortality experience from mortality assumptions
on which the first installment is based.

After the Annuity Commencement Date, the Owner may direct a transfer of assets
from one Sub-account to another Sub-account or to the fixed portion of the
Contract. Such transfers will be limited to three (3) times per Contract Year.

A transfer will result in the purchase of Annuity Units in one Sub-account, and
the redemption of Annuity Units in the other Sub-account. Such a transfer will
be accomplished at relative Annuity Unit values as of the Valuation Date the
transfer request is received. The valuation of Annuity Units is described above.

3.05 PROOF OF AGE

Payment will be subject to proof of age that LNL will accept such as a certified
copy of a birth certificate.

3.06 MINIMUM ANNUITY PAYMENT REQUIREMENTS

If the Annuity Payment Option chosen results in payments of less than $50 per
Sub-account, the frequency will be changed so that payments will be at least
$50.

For the purposes of this Section, the fixed portion of the Contract is
considered a Sub-account.

3.07 EVIDENCE OF SURVIVAL

LNL has the right to ask for proof that the person on whose life the payment is
based is alive when each
<PAGE>

payment is due.

3.08 CHANGE IN ANNUITY PAYMENT OPTION

The Annuity Payment Option may not be changed after the Annuity Commencement
Date.

ARTICLE 4
BENEFICIARY

4.01 DESIGNATION

The Owner may designate a Beneficiary(s), if there is a single owner. The
designated Beneficiary(s) will receive the Death Benefit proceeds upon the death
of the Owner.

If there are Joint Owners, upon the death of the first Joint
Owner, the surviving Joint Owner will receive the Death Benefit proceeds. The
surviving Joint Owner will be treated as the primary, designated Beneficiary.
Any other designation on record at the time of death will be treated as a
contingent beneficiary.

If the surviving Joint Owner, as spouse of the deceased Joint Owner, continues
the Contract as the sole Owner in lieu of receiving the Death Benefit proceeds,
then the designated Beneficiary(s) will receive the Death Benefit proceeds upon
the death of the surviving spouse.

UNLESS OTHERWISE STATED IN THE BENEFICIARY DESIGNATION, IF THERE IS MORE THAN
ONE BENEFICIARY THEY ARE PRESUMED TO SHARE EQUALLY.

4.02 CHANGE

The Owner may change any Beneficiary unless otherwise provided in the previous
designation.

A change of Beneficiary will revoke any previous designation.

A change may be made by filing a written request to LNL at its Home Office. The
change will become effective upon receipt of the written request by LNL at its
Home Office.

LNL reserves the right to request the Contract for endorsement of the change.

4.03 DEATH OF BENEFICIARY

Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other
Beneficiaries named, according to their respective interests. If there are no
Beneficiaries, benefits will be paid to a Contingent Beneficiary(s), if any. If
no Beneficiary or Contingent Beneficiary survives the Owner, the proceeds will
be paid to the Owner's estate.

Once a Beneficiary is entitled to death proceeds, the Beneficiary may name his
or her own Beneficiary(s) to receive any remaining benefits due under the
Contract, should the Beneficiary die prior to receipt of all benefits. This
designation must be made to the LNL Home Office.

ARTICLE 5
GENERAL PROVISIONS

5.01 THE CONTRACT

The Contract and any riders attached constitute the entire Contract. Only the
President, a Vice President, the Secretary or an Assistant Secretary of LNL has
the power, on behalf of LNL, to change, modify, or waive any provisions of this
Contract.

LNL reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.

Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have usual and customary meaning except when specifically defined.

5.02 OWNERSHIP

The Owner is the person who has the ability to exercise the rights within this
Contract.

The Owner may only name his or her spouse as a Joint Owner. Joint Owner(s) shall
be treated as having equal, undivided interests in the contract, including
rights of survivorship. Either Joint Owner, independently of the other, may
exercise any ownership rights in the Contract.

Prior to the Annuity Commencement Date, the Owner has the right to change the
Annuitant at any time by notifying LNL in writing of the change. The Annuitant
may not be changed in a Contract owned by a non-natural person. The Owner may
also name a Contingent Annuitant by notifying LNL in writing. The Contingent
Annuitant designation is no longer applicable after the Annuity Commencement
Date.
<PAGE>

5.03 ASSIGNMENTS

If this Contract is used with a Qualified Plan, the Contract will not be
transferable. It may not be sold, assigned, discounted or pledged as collateral
for a loan or as security for the performance of an obligation or for any other
purpose.

5.04 INCONTESTABILITY

This Contract will not be contested by LNL.

5.05 MISSTATEMENT OF AGE AND/OR SEX

If the age and/or sex of the Annuitant has been misstated, the benefits
available under this Contract will be those which the Purchase Payments would
have purchased using the correct age and/or sex. Any underpayment already made
by LNL shall be made up immediately and any overpayments already made by LNL
shall be charged against the Annuity Payments falling due after the correction
is made.

5.06 NONPARTICIPATING

The Contract is nonparticipating and will not share in the surplus earnings of
LNL.

5.07 VOTING RIGHTS

The Owner shall have a right to vote at the meetings of the Series. Ownership of
this Contract shall not entitle any person to vote at any meeting of
shareholders of LNL. Votes attributable to the Contract shall be cast in
conformity with applicable law.

5.08 OWNERSHIP OF THE ASSETS

LNL shall have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.

5.09 REPORTS

At least once each Contract Year LNL shall mail a report to the Owner. The
report shall be mailed to the last address known to LNL. Prior to the Annuity
Commencement Date, the report shall include a statement of the number of units
credited to the Variable Account under this Contract and the dollar value of
such units as well as a statement of the value of the fixed portion of this
Contract. The information in the report shall be as of a date not more than two
months prior to the date of mailing the report. LNL shall also mail to the Owner
at least once in each Contract Year a report of the investments held in the Sub-
accounts under this Contract.

5.10 PREMIUM TAX

State and local government premium tax, if applicable, will be deducted from
Purchase Payments or account value. This will be deducted when incurred by LNL
or at another time of LNL's choosing.

5.11 MAXIMUM ISSUE AGE

This Contract will not be issued to Owners over the age of 85. This also applies
to Joint Owners, if any.
<PAGE>

ARTICLE 6
ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION

DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
SINGLE LIFE ANNUITIES
No 120 240
Period Months Months Cash
age Certain Certain Certain Refund
60 4.78 4.73 4.56 4.56
61 4.87 4.81 4.63 4.63
62 4.97 4.90 4.69 4.71
63 5.07 5.00 4.75 4.78
64 5.19 5.10 4.82 4.87
65 5.30 5.21 4.88 4.95
66 5.43 5.32 4.95 5.04
67 5.57 5.44 5.01 5.14
68 5.72 5.56 5.08 5.24
69 5.88 5.70 5.14 5.34
70 6.05 5.84 5.20 5.46
71 6.23 5.99 5.26 5.57
72 6.44 6.14 5.31 5.69
73 6.66 6.30 5.36 5.82
74 6.89 6.47 5.40 5.96
75 7.15 6.65 5.44 6.10

JOINT AND SURVIVOR ANNUTIES
Joint and Full to Survivor Joint and Two-Thirds Survivor
Certain Period Joint Certain Period
None 120 240 Age None 120 240
4.37 4.37 4.34 60 4.78 4.74 4.57
4.44 4.44 4.40 61 4.88 4.82 4.63
4.52 4.51 4.46 62 4.97 4.91 4.69
4.60 4.59 4.53 63 5.08 5.00 4.76
4.68 4.68 4.60 64 5.19 5.10 4.82
4.77 4.77 4.67 65 5.31 5.21 4.88
4.87 4.86 4.74 66 5.44 5.32 4.95
4.98 4.96 4.82 67 5.57 5.44 5.01
5.09 5.07 4.89 68 5.72 5.56 5.08
5.21 5.19 4.96 69 5.87 5.69 5.14
5.34 5.31 5.04 70 6.04 5.83 5.20
5.47 5.44 5.11 71 6.22 5.97 5.25
5.62 5.58 5.18 72 6.42 6.12 5.31
5.78 5.73 5.24 73 6.62 6.28 5.36
5.96 5.88 5.30 74 6.85 6.44 5.40
6.14 6.05 5.36 75 7.09 6.61 5.44

<PAGE>

<TABLE>
<CAPTION>
Age Adjustment Table
<S> <C> <C> <C>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.

</TABLE>

ARTICLE 7
ANNUITY PURCHASE RATES UNDER A FIXED PAYMENT OPTION

DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED

SINGLE LIFE ANNUITIES

<TABLE>

<S> <C> <C> <C> <C>
No 120 240
Period Months Months Cash
age Certain Certain Certain Refund
60 4.42 4.38 4.22 4.18
61 4.52 4.47 4.29 4.26
62 4.62 4.56 4.36 4.34
63 4.73 4.66 4.43 4.42
64 4.85 4.77 4.50 4.51
65 4.97 4.89 4.57 4.60
66 5.11 5.01 4.64 4.69
67 5.25 5.13 4.71 4.79
68 5.41 5.27 4.78 4.90
69 5.57 5.41 4.85 5.01
70 5.75 5.56 4.91 5.13
71 5.95 5.71 4.98 5.25
72 6.16 5.88 5.04 5.38
73 6.38 6.05 5.09 5.52
74 6.63 6.23 5.14 5.66
75 6.90 6.42 5.19 5.81

</TABLE>

<TABLE>

JOINT AND SURVIVOR ANNUTIES
Joint and Full to Survivor Joint and Two-Thirds Survivor
Certain Period Joint Certain Period
<S> <C> <C> <C> <C> <C> <C>
None 120 240 Age None 120 240
4.01 4.01 3.98 60 4.43 4.38 4.22
4.09 4.08 4.05 61 4.52 4.47 4.29
4.17 4.16 4.12 62 4.63 4.57 4.36
4.25 4.25 4.19 63 4.74 4.67 4.43
4.34 4.34 4.26 64 4.85 4.78 4.50
4.44 4.43 4.34 65 4.98 4.89 4.57
4.54 4.54 4.42 66 5.11 5.01 4.64
4.66 4.64 4.50 67 5.26 5.13 4.71
4.77 4.76 4.58 68 5.41 5.27 4.78
4.90 4.88 4.66 69 5.57 5.41 4.85
5.04 5.01 4.74 70 5.75 5.55 4.91
5.18 5.15 4.82 71 5.94 5.70 4.98
5.34 5.30 4.89 72 6.14 5.86 5.03
5.51 5.45 4.96 73 6.35 6.03 5.09
5.69 5.62 5.03 74 6.59 6.20 5.14
5.89 5.79 5.09 75 6.84 6.38 5.18
</TABLE>

<PAGE>

Age Adjustment Table
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
Before 1920 +2 1960-1969 -3
1920-1929 +1 1970-1979 -4
1930-1939 0 1980-1989 -5
1940-1949 -1 1990-1999 -6
1950-1959 -2 ETC. ETC.

ARTICLE 8
GUARANTEED ACCUMULATED VALUES AND SURRENDER VALUES
FOR FIXED ALLOCATIONS*

$1,000 Annual Contribution $100 Monthly Contribution
Guaranteed Guaranteed Guaranteed Guaranteed
End of Accumulated Surrender End of Accumulated Surrender
Year Value Value Year Value Value
<S> <C> <C> <C> <C> <C>
1 1,030.00 970.00 1 1,219.41 1,147.41
2 2,090.90 1,970.90 2 2,475.41 2,331.41
3 3,183.63 3,013.63 3 3,769.08 3,565.08
4 4,309.14 4,099.14 4 5,101.56 4,849.56
5 5,468.41 5,228.41 5 6,474.02 6,186.02
6 6,662.46 6,402.46 6 7,887.66 7,575.66
7 7,892.34 7,622.34 7 9,343.70 9,019.70
8 9,159.11 8,889.11 8 10,843.42 10,519.42
9 10,463.88 10,193.88 9 12,388.14 12,064.14
10 11,807.80 11,537.80 10 13,979.19 13,655.19
11 13,192.03 12,922.03 11 15,617.98 15,293.98
12 14,617.79 14,347.79 12 17,305.93 16,981.93
13 16,086.32 15,816.32 13 19,044.52 18,720.52
14 17,598.91 17,328.91 14 20,835.27 20,511.27
15 19,156.88 18,886.88 15 22,679.74 22,355.74
16 20,761.59 20,491.59 16 24,579.54 24,255.54
17 22,414.44 22,144.44 17 26,536.34 26,212.34
18 24,116.87 23,846.87 18 28,551.84 28,227.84
19 25,870.37 25,600.37 19 30,627.81 30,303.81
20 27,676.49 27,406.49 20 32,766.06 32,442.06
21 29,536.78 29,266.78 21 34,968.45 34,644.45
22 31,452.88 31,182.88 22 37,236.91 36,912.91
23 33,426.47 33,156.47 23 39,573.43 39,249.43
24 35,459.26 35,189.26 24 41,980.05 41,656.05
25 37,553.04 37,283.04 25 44,458.86 44,134.86
26 39,709.63 39,439.63 26 47,012.04 46,688.04
27 41,930.92 41,660.92 27 49,641.81 49,317.81
28 44,218.85 43,948.85 28 52,350.48 52,026.48
29 46,575.42 46,305.42 29 55,140.41 54,816.41
30 49,002.68 48,732.68 30 58,014.03 57,690.03
31 51,502.76 51,232.76 31 60,973.86 60,649.86
32 54,077.84 53,807.84 32 64,022.49 63,698.49
33 56,730.18 56,460.18 33 67,162.58 66,838.58
34 59,462.08 59,192.08 34 70,396.87 70,072.87
35 62,275.94 62,005.94 35 73,728.18 73,404.18
36 65,174.22 64,904.22 36 77,159.44 76,835.44
37 68,159.45 67,889.45 37 80,693.64 80,369.64
38 71,234.23 70,964.23 38 84,333.86 84,009.86
39 74,401.26 74,131.26 39 88,083.29 87,759.29
40 77,663.30 77,393.30 40 91,945.20 91,621.20
41 81,023.20 80,753.20 41 95,922.96 95,598.96
42 84,483.89 84,213.89 42 100,020.07 99,696.07
43 88,048.41 87,778.41 43 104,240.08 103,916.08
44 91,719.86 91,449.86 44 108,586.69 108,262.69
45 95,501.46 95,231.46 45 113,063.71 112,739.71

</TABLE>
* Guaranteed Accumulated Values and Guaranteed Surrender Values may be more or
less than shown in the table because of the variable of the day of receipt of
the Purchase Payment at the Home Office from period to period and the
crediting of interest to the Annuitant's account on a daily basis. Values
shown are based upon contributions equally spaced with interest occurring at
the beginning of the year. These values do not provide for premium tax, if
any.

<PAGE>

EXHIBIT 14(a)
ORGANIZATIONAL CHART OF THE
LINCOLN NATIONAL INSURANCE HOLDING COMPANY SYSTEM

All the members of the holding company system are corporations, with the
exception of American States Lloyds Insurance Company, Delaware Distributors,
L.P., Founders CBO, L.P., and Lincoln National Mezzanine Fund, L.P.

<PAGE>

- ----------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
|
| --------------------------------------------------
|--| The Insurers' Fund, Inc. |
| | 100% - Maryland - Inactive |
| --------------------------------------------------
| --------------------------------------------------
|--| LNC Administrative Services Corporation |
| | 100% - Indiana - Third Party Administrator |
| --------------------------------------------------
|
| ----------------------------------------
|--| The Richard Leahy Corporation |
| | 100% - Indiana - Insurance Agency |
| ----------------------------------------
| | -----------------------------------
| |--| The Financial Alternative, Inc. |
| | | 100% - Utah- Insurance Agency |
| | -----------------------------------
| | -----------------------------------------
| |--| Financial Alternative Resources, Inc. |
| | | 100% - Kansas - Insurance Agency |
| | -----------------------------------------
| | -------------------------------------------
| |--| Financial Choices, Inc. |
| | | 100% - Pennsylvania - Insurance Agency |
| | -------------------------------------------
| | -------------------------------------------------
| | | Financial Investment Services, Inc. |
| |--| (formerly Financial Services Department, Inc.)|
| | | 100% - Indiana - Insurance Agency |
| | -------------------------------------------------
| | -------------------------------------------
| | | Financial Investments, Inc. |
| |--| (formerly Insurance Alternatives, Inc.) |
| | | 100% - Indiana - Insurance Agency |
| | -------------------------------------------
| | ---------------------------------------------
| |--| The Financial Resources Department, Inc. |
| | | 100% - Michigan - Insurance Agency |
| | ---------------------------------------------
| | -------------------------------------------
| |--| Investment Alternatives, Inc. |
| | | 100% - Pennsylvania - Insurance Agency |
| | -------------------------------------------
| | ----------------------------------------
| |--| The Investment Center, Inc. |
| | | 100% - Tennessee - Insurance Agency |
| | ----------------------------------------
| | ----------------------------------------
| |--| The Investment Group, Inc. |
| | | 100% - New Jersey - Insurance Agency |
| | ----------------------------------------
| | --------------------------------------
| |--| Personal Financial Resources, Inc. |
| | | 100% - Arizona - Insurance Agency |
| | --------------------------------------
| | ------------------------------------------
| |--| Personal Investment Services, Inc. |
| | 100% - Pennsylvania - Insurance Agency |
| ------------------------------------------
|
| ---------------------------------------------
|--| LincAm Properties, Inc. |
| | 50% - Delaware - Real Estate Investment |
| ---------------------------------------------
|
|
|

<PAGE>

- ----------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
|
| -------------------------------------------------
| | Lincoln Financial Group, Inc. |
|--| (formerly Lincoln National Sales Corporation) |
| | 100% - Indiana - Insurance Agency |
| -------------------------------------------------
| |
| | ------------------------------------
| |--| LNC Equity Sales Corporation |
| | | 100% - Indiana - Broker-Dealer |
| | ------------------------------------
| |
| | ----------------------------------------------------------------
| | | Corporate agencies: Lincoln Financial Group, Inc. ("LFG") |
| |--| has subsidiaries of which LFG owns from 80%-100% of the |
| | | common stock (see Attachment #1). These subsidiaries serve |
| | | as the corporate agency offices for the marketing and |
| | | servicing of products of The Lincoln National Life Insurance |
| | | Company. Each subsidiary's assets are less than 1% of the |
| | | total assets of the ultimate controlling person. |
| | ----------------------------------------------------------------
| |
| | --------------------------------------------------
| |--| Professional Financial Planning, Inc. |
| | 100% - Indiana - Financial Planning Services |
| --------------------------------------------------
|
| -----------------------------------------
|--| Lincoln Life Improved Housing, Inc. |
| | 100% - Indiana |
| -----------------------------------------
|
| -------------------------------------------------
|--| Lincoln National (China) Inc. |
| | 100% - Indiana - China Representative Office |
| -------------------------------------------------
|
| -----------------------------------------------
|--| Lincoln National Intermediaries, Inc. |
| | 100% - Indiana - Reinsurance Intermediary |
| -----------------------------------------------
|
|

3
<PAGE>

- ---------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ---------------------------------
|
| -----------------------------------------
|__| Lincoln National Investment Companies,|
| | Inc. 100% - Indiana - Holding Company |
| -----------------------------------------
| |
| | --------------------------------------
| |--| Delaware Management Holdings, Inc. |
| | | 100% - Delaware - Holding Company |
| | --------------------------------------
| | | -------------------------------------
| | |--| DMH Corp. |
| | | | 100% - Delaware - Holding Company |
| | | -------------------------------------
| | | --------------------------------------
| | |--| Delaware Distributors, Inc. |
| | | | 100% - Delaware - General Partner |
| | | --------------------------------------
| | | | -------------------------------------------------------------
| | | |--| Delaware Distributors, L.P. |
| | | | 100% - Delaware - Mutual Fund Distributor & Broker/Dealer |
| | | -------------------------------------------------------------
| | | ------------------------------------------
| | |--| Delaware International Advisers Ltd. |
| | | | 81.1% - England - Investment Advisor |
| | | ------------------------------------------
| | | -----------------------------------------
| | |--| Delaware International Holdings Ltd. |
| | | | 100% - Bermuda - Marketing Services |
| | | -----------------------------------------
| | | | ----------------------------------------
| | | |--| Delaware International Advisers Ltd. |
| | | | 18.9% - England - Investment Advisor |
| | | ----------------------------------------
| | | ----------------------------------------
| | |--| Delaware Investment Counselors, Inc. |
| | | | 100% - Delaware - Investment Advisor |
| | | ----------------------------------------
| | | ---------------------------------------------------
| | |__| Delaware Investment & Retirement Services, Inc. |
| | | | 100% - Delaware - Registered Transfer Agent |
| | | ---------------------------------------------------
| | | -----------------------------------------
| | |--| Delaware Management Company, Inc. |
| | | | 100% - Delaware - Investment Advisor |
| | | -----------------------------------------
| | | | --------------------------------------
| | | |--| Founders Holdings, Inc. |
| | | | 100% - Delaware - General Partner |
| | | --------------------------------------
| | | | ---------------------------------------------
| | | |--| Founders CBO, L.P. |
| | | | 100% - Delaware - Investment Partnership |
| | | ---------------------------------------------
| | | | -------------------------------------------------
| | | |--| Founders CBO Corporation |
| | | | 100% - Delaware - Co-Issuer with Founders CBO |
| | | -------------------------------------------------
| | | ----------------------------------------
| | |--| Delaware Management Trust Company |
| | | | 100% - Pennsylvania - Trust Services |
| | | ----------------------------------------
| | | -----------------------------------------------------------
| | |--| Delaware Service Company, Inc. |
| | | 100% - Delaware - Shareholder Services & Transfer Agent |
| | -----------------------------------------------------------
| | --------------------------------------------------------------
| |--| Lincoln Investment Management, Inc. |
| | | (formerly Lincoln National Investment Management Company) |
| | | 100% - Illinois - Mutual Fund Manager and |
| | | Registered Investment Adviser |
| | --------------------------------------------------------------
| | |
| | | ------------------------------------------------------------
| | | | Lincoln National Mezzanine Corporation |
| | |--| 100% - Indiana - General Partner for Mezzanine Financing |
| | | Limited Partnership |
| | ------------------------------------------------------------
| | |
| | | ------------------------------------------------------------
| | |--| Lincoln National Mezzanine Fund, L.P. |
| | | 50% - Delaware - Mezzanine Financing Limited Partnership |
| | ------------------------------------------------------------

4
<PAGE>

- ----------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
|
| -----------------------------------------------
|--| Lincoln National Investment Companies, Inc. |
| | 100% - Indiana - Holding Company |
| -----------------------------------------------
| | -------------------------------------------
| |--| Lynch & Mayer, Inc. |
| | | 100% - Indiana - Investment Adviser |
| | -------------------------------------------
| | | -------------------------------------------
| | |--| Lynch & Mayer Asia, Inc. |
| | | | 100% - Delaware - Investment Management |
| | | -------------------------------------------
| | | -------------------------------------------
| | |--| Lynch & Mayer Securities Corp. |
| | | 100% - Delaware - Securities Broker |
| | -------------------------------------------
| | --------------------------------------------------------
| | | Vantage Global Advisors, Inc. |
| |--| (formerly Modern Portfolio Theory Associates, (Inc.) |
| | 100% - Delaware - Investment Adviser |
| --------------------------------------------------------
| ------------------------------------------------
|--| The Lincoln National Life Insurance Company |
| | 100% - Indiana |
| ------------------------------------------------
| | ----------------------------------------------
| |--| First Penn-Pacific Life Insurance Company |
| | | 100% - Indiana |
| | ----------------------------------------------
| | -----------------------------------------------
| |--| Lincoln Life & Annuity Company of New York |
| | | 100% - New York |
| | -----------------------------------------------
| | -------------------------------------------------
| |--| Lincoln National Aggressive Growth Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | -------------------------------------------------
| | -------------------------------------
| |--| Lincoln National Bond Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | -------------------------------------
| | ----------------------------------------------------
| |--| Lincoln National Capital Appreciation Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | ----------------------------------------------------
| | ----------------------------------------------
| |--| Lincoln National Equity-Income Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | ----------------------------------------------
| | --------------------------------------------------------
| | | Lincoln National Global Asset Allocation Fund, Inc. |
| |--| (formerly Lincoln National Putnam Master Fund, Inc.) |
| | | 100% - Maryland - Mutual Fund |
| | --------------------------------------------------------
| | --------------------------------------------------
| | | Lincoln National Growth and Income Fund, Inc. |
| |--| (formerly Lincoln National Growth Fund, Inc.) |
| | | 100% - Maryland - Mutual Fund |
| | --------------------------------------------------
| |

<PAGE>

- ----------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
|
| -------------------------------------------------
|--| The Lincoln National Life Insurance Company |
| | 100% - Indiana |
| -------------------------------------------------
| | ----------------------------------------------------------
| |--| Lincoln National Health & Casualty Insurance Company |
| | | 100% - Indiana |
| | ----------------------------------------------------------
| | ---------------------------------------------
| |--| Lincoln National International Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | ---------------------------------------------
| | -----------------------------------------
| |--| Lincoln National Managed Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | -----------------------------------------
| | ----------------------------------------------
| |--| Lincoln National Money Market Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | ----------------------------------------------
| | -------------------------------------------------
| |--| Lincoln National Social Awareness Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | -------------------------------------------------
| | -------------------------------------------------------
| |--| Lincoln National Special Opportunities Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| | -------------------------------------------------------
| |
| | --------------------------------------------------------
| |--| Lincoln National Reassurance Company |
| | 100% - Indiana - Life Insurance |
| --------------------------------------------------------
| | -------------------------------------------------
| |--| Special Pooled Risk Administrators, Inc. |
| | 100% - New Jersey - Catastrophe Reinsurance |
| | Pool Administrator |
| -------------------------------------------------
| -----------------------------------------------------------
|--| Lincoln National Management Services, Inc. |
| | 100% - Indiana - Underwriting and Management Services |
| -----------------------------------------------------------
|
| -----------------------------------------
|--| Lincoln National Realty Corporation |
| | 100% - Indiana - Real Estate |
| -----------------------------------------
| -------------------------------------------------------------
|--| Lincoln National Reinsurance Company (Barbados) Limited |
| | 100% - Barbados |
| -------------------------------------------------------------
| ------------------------------------------------
|--| Lincoln National Reinsurance Company Limited |
| | (formerly Heritage Reinsurance, Ltd.) |
| | 100% ** - Bermuda |
| ------------------------------------------------
| | ------------------------------------------
| |--| Lincoln European Reinsurance Company |
| | | 100% - Belgium |
| | ------------------------------------------
| | -----------------------------------------------------------
| | | Lincoln National Underwriting Services, Ltd. |
| |--| 90% - England/Wales - Life/Accident/Health Underwriter |
| | | (Remaining 10% owned by Old Fort Ins. Co. Ltd.) |
| | -----------------------------------------------------------
| | ----------------------------------------------------------
| | | Servicios de Evaluacion de Riesgos, S. de R.L. de C.V. |
| |--| 51% - Mexico - Reinsurance Underwriter |
| | (Remaining 49% owned by Lincoln National Corp.) |
| ----------------------------------------------------------

6
<PAGE>

- ----------------------------------
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
| -----------------------------------------------
|--| Lincoln National Risk Management, Inc. |
| | 100% - Indiana - Risk Management Services |
| -----------------------------------------------
|
| -------------------------------------------------
|--| Lincoln National Structured Settlement, Inc. |
| | 100% - New Jersey |
| -------------------------------------------------
|
| -------------------------------------------
|--| Lincoln National (UK) PLC |
| | 100% - England/Wales - Holding Company |
| -------------------------------------------
| |
| | ---------------------------------------------------------
| | | Allied Westminster & Company Limited |
| |--| 100% - England/Wales - Sales Services |
| | ---------------------------------------------------------
| |
| | -------------------------------------
| |--|Cannon Fund Managers Limited |
| | | 100% - England/Wales - Inactive |
| | -------------------------------------
| |
| | ----------------------------------------------------------
| |--| Culverin Property Services Limited |
| | | 100% - England/Wales - Property Development Services |
| | ----------------------------------------------------------
| |
| | -----------------------------------------------------------
| | | HUTM Limited |
| | | 100% - England/Wales - Unit Trust Management (Inactive) |
| | -----------------------------------------------------------
| |
| | ----------------------------------------------
| |--| ILI Supplies Limited |
| | | 100% - England/Wales - Computer Leasing |
| | ----------------------------------------------
| |
| | ----------------------------------------------------
| |--| Laurentian Financial Group PLC |
| | | 100% - England/Wales - Holding Company |
| | ----------------------------------------------------
| | |
| | | ----------------------------------------------------
| | |--| Lincoln Financial Advisers Limited |
| | | | (formerly: Laurentian Financial Advisers Ltd.) |
| | | | 100% - England/Wales - Sales Company |
| | | ----------------------------------------------------
| | |
| | | ----------------------------------------------------
| | |--| Lincoln Investment Management Limited |
| | | | (formerly: Laurentian Fund Management Ltd.) |
| | | | 100% - England/Wales - Investment Management |
| | | ----------------------------------------------------
| | |
| | | -------------------------------------------------------------
| | |--| Lincoln Independent Limited |
| | | | (formerly: Laurentian Independent Financial Planning Ltd.)|
| | | | 100% - England/Wales - Independent Financial Adviser |
| | | -------------------------------------------------------------

<PAGE>

- ----------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
|
| -------------------------------------------
| | Lincoln National (UK) PLC |
|--| 100% - England/Wales - Holding Company |
| -------------------------------------------
| |
| | ------------------------------------------
| |--| Laurentian Financial Group PLC |
| | | 100% - England/Wales - Holding Company |
| | ------------------------------------------
| | | -----------------------------------------
| | |--| Laurentian Life PLC |
| | | | 100% - England/Wales - Life Insurance |
| | | -----------------------------------------
| | | |
| | | | -----------------------------------------
| | | |--|Barnwood Property Group Limited |
| | | | |100% - England/Wales - Holding Company |
| | | | -----------------------------------------
| | | | |
| | | | | ---------------------------------------------
| | | | |--| Barnwood Developments Limited |
| | | | | | 100% England/Wales - Property Development |
| | | | | ---------------------------------------------
| | | | | ----------------------------------------------
| | | | |--| Barnwood Properties Limited |
| | | | | 100% - England/Wales - Property Investment |
| | | | ----------------------------------------------
| | | | --------------------------------------------------------
| | | |--|IMPCO Properties Limited |
| | | |100% - England/Wales - Property Investment (Inactive) |
| | | --------------------------------------------------------
| | | ---------------------------------------------
| | |--| Laurentian Management Services Limited |
| | | | 100% - England/Wales - Management Services|
| | | ---------------------------------------------
| | | | --------------------------------------------------
| | | |--|Laurit Limited |
| | | |100% - England/Wales - Data Processing Systems |
| | | --------------------------------------------------
| | | -----------------------------------------
| | |--| Laurentian Milldon Limited |
| | | | 100% - England/Wales - Sales Company |
| | | -----------------------------------------
| | | ------------------------------------------------
| | |--| Laurentian Unit Trust Management Limited |
| | | | 100% - England/Wales - Unit Trust Management |
| | | ------------------------------------------------
| | | | -------------------------------------------
| | | |--| LUTM Nominees Limited |
| | | | 100% - England/Wales - Nominee Services |
| | | -------------------------------------------
| | | ------------------------------------------------------------
| | |--| Laurtrust Limited |
| | | | 100% - England/Wales - Pension Scheme Trustee (Inactive) |
| | | ------------------------------------------------------------
| | | -----------------------------------------
| | |--| The Money Club Direct Company Limited |
| | | 100% - Dormant |
| | -----------------------------------------
| |
| | ------------------------------------------
| |--| Liberty Life Assurance Limited |
| | | 100% - England/Wales - Inactive |
| | ------------------------------------------
| | -------------------------------------------------
| |--| Liberty Life Pension Trustee Company Limited |
| | | 100% - England/Wales - Corporate Pension Fund |
| | -------------------------------------------------
| | --------------------------------------------
| |--| Liberty Press Limited |
| | | 100% - England/Wales - Printing Services |
| | --------------------------------------------

<PAGE>

- ----------------------------------
| Lincoln National Corporation |
| Indiana - Holding Company |
- ----------------------------------
|
|
| ------------------------------------------
|--|Lincoln National (UK) PLC |
| | 100% - England/Wales - Holding Company |
| ------------------------------------------
| |
| | ----------------------------------------------
| |--|Lincoln Assurance Limited |
| | | 100% ** - England/Wales - Life Assurance |
| | ----------------------------------------------
| |
| | ---------------------------------------------------
| |--| Lincoln Fund Managers Limited |
| | | 100% - England/Wales - Unit Trust Management |
| | ---------------------------------------------------
| |
| | ------------------------------------------------------
| |--| Lincoln Insurance Services Ltd. |
| | | 100% - Holding Company |
| | ------------------------------------------------------
| | |
| | | -----------------------------------
| | |--| British National Life Sales Ltd.|
| | | | 100% - Inactive |
| | | -----------------------------------
| | |
| | | -------------------------------------------------
| | |--| BNL Trustees Limited |
| | | | 100% - England/Wales - Corporate Pension Fund |
| | | -------------------------------------------------
| | |
| | | ---------------------------------------
| | |--| Chapel Ash Financial Services Ltd. |
| | | | 100% - Direct Insurance Sales |
| | | ---------------------------------------
| | |
| | | ------------------------------------------------
| | | | Lincoln General Insurance Co. Ltd. |
| | | | 100% - Accident & Health Insurance |
| | | ------------------------------------------------
| | |
| | | ----------------------------
| | |--| P.N. Kemp-Gee & Co. Ltd. |
| | | 100% - Inactive |
| | ----------------------------
| |
| | ----------------------------------------------------
| |--| Lincoln National Training Services Limited |
| | | 100% - England/Wales - Training Company |
| | ----------------------------------------------------
| |
| | ---------------------------------------------------
| |--| Lincoln Pension Trustees Limited |
| | | 100% - England/Wales - Corporate Pension Fund |
| | ---------------------------------------------------
| |
| | -----------------------------------------------------------
| |--| LIV Limited (formerly Lincoln Investment Management Ltd.)|
| | | 100% - England/Wales - Investment Management Services |
| | -----------------------------------------------------------
| | |
| | | -------------------------------------------------
| | |--| CL CR Management Ltd. |
| | | 50% - England/Wales - Administrative Services |
| | -------------------------------------------------
| |
| | ---------------------------------------------------
| |--| LN Management Limited |
| | | 100% - England/Wales - Administrative Services |
| | ----------------------------------------------------
| | |
| | | -------------------------------------
| | |--| UK Mortgage Securities Limited |
| | | 100% - England/Wales - Inactive |
| | -------------------------------------
| |

<PAGE>

Footnotes:
- ----------

* The funds contributed by the Underwriters were, and continue to be subject
to trust agreements between American States Insurance Company, the grantor,
and each Underwriter, as trustee.

** Except for director-qualifying shares

# Lincoln National Corporation has subscribed for and paid for 100 shares of
Common Stock (with a par value of $1.00 per share) at a price of $10 per
share, as part of the organizing of the fund. As such stock is further
sold, the ownership of voting securities by Lincoln National Corporation
will decline and fluctuate.

<PAGE>

ATTACHMENT #1
LINCOLN FINANCIAL GROUP, INC.
CORPORATE AGENCY SUBSIDIARIES

1) Lincoln Financial Group, Inc. (AL)
2) Lincoln Southwest Financial Group, Inc. (Phoenix, AZ)
3) Lincoln Financial and Insurance Services Corporation (Walnut Creek, CA)
3a) California Fringe Benefit and Insurance Marketing Corporation
DBA/California Fringe Benefit Company (Walnut Creek, CA)
4) Colorado-Lincoln Financial Group, Inc. (Denver, CO)
5) Lincoln National Financial Services, Inc. (Lake Worth, FL)
6) CMP Financial Services, Inc. (Chicago, IL)
7) Lincoln Financial Group of Northern Indiana, Inc. (Fort Wayne, IN)
8) Financial Planning Partners, Ltd. (Mission, KS)
9) The Lincoln National Financial Group of Louisiana, Inc. (Shreveport, LA)
10) Benefits Marketing Group, Inc. (D.C. & Chevy Chase, MD)
11) Lincoln National Sales Corporation of Maryland (Baltimore, MD)
(formerly: Morgan Financial Group, Inc.)
12) Lincoln Financial Services and Insurance Brokerage of New England, Inc.
(formerly: Lincoln National of New England Insurance Agency, Inc.)
(Worcester, MA)
13) Lincoln Financial Group of Michigan, Inc. (Troy, MI)
13a) Financial Consultants of Michigan, Inc. (Troy, MI)
14) Lincoln Financial Group of Missouri, Inc. (formerly: John J. Moore &
Associates, Inc.) (St. Louis, MO)
15) Beardslee & Associates, Inc. (Clifton, NJ)
16) Lincoln Financial Group, Inc. (formerly: Resources/Financial, Inc.)
(Albuquerque, NM)
17) Lincoln Cascades, Inc. (Portland, OR)
18) Lincoln Financial Services, Inc. (Pittsburgh, PA)
19) Lincoln National Financial Group of Philadelphia, Inc. (Philadelphia, PA)
20) Lincoln Financial Group, Inc. (Salt Lake City, (UT)

<PAGE>

Exhibit 14(b)

BOOKS AND RECORDS

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H

RULES UNDER SECTION 31 OF THE INVESTMENT COMPANY ACT OF 1940

Records to Be Maintained by Registered Investment Companies, Certain
Majority-Owned Subsidiaries Thereof, and Other Persons Having
Transactions with Registered Investment Companies.

Reg. 270.31a-1. (a) Every registered investment company, and every
underwriter, broker, dealer, or investment advisor which is a majority-owned
subsidiary of such a company, shall maintain and keep current the accounts,
books, and other documents relating to its business which constitute the record
forming the basis for financial statements required to be filed pursuant to
Section 30 of the Investment Company Act of 1940 and of the auditor's reports
relating thereto.
<TABLE>
<CAPTION>
LN-Record Location Person to Contact Retention
- --------- -------- ----------------- ---------
<S> <C> <C> <C>
Annual Reports Controllers Eric Jones Permanently, the first two
To Shareholders years in an easily
accessible place

Semi-Annual Controllers Eric Jones Permanently, the first two
Reports years in an easily
accessible place

Form N-SAR Controllers Eric Jones Permanently, the first two
years in an easily
accessible place
</TABLE>

(b) Every registered investment company shall maintain and keep current the
following books, accounts, and other documents:

Type of Record
- --------------

(1) Journals (or other records of original entry) containing an itemized daily
record in detail of all purchases and sales of securities (including sales and
redemptions of its own securities), all receipts and deliveries of securities
(including certificate numbers if such detail is not recorded by custodian or
transfer agent), all receipts and disbursements of cash and all other debits and
credits. Such records shall show for each such transaction the name and quantity
of securities, the unit and aggregate purchase or sale price, commission paid,
the market on which effected, the trade date, the settlement date, and the name
of the person through or from whom purchased or received or to whom sold or
delivered.
<TABLE>
<CAPTION>
Purchases and Sales Journals
- ----------------------------
<S> <C> <C> <C>
Daily reports Product Nancy Alford Permanently, the first two
of securities Admin. years in an easily
transactions accessible place
</TABLE>

<PAGE>

Portfolio Securities
- --------------------

Not Applicable.

<PAGE>

LN-Record Location Person to Contact Retention
- --------- -------- ----------------- ---------

Receipts and Deliveries of Securities (units)
- ---------------------------------------------

Not Applicable.

Portfolio Securities
- --------------------

Not Applicable.

Receipts and Disbursements of Cash and other Debits and Credits
- ---------------------------------------------------------------
<S> <C> <C> <C>
Daily Journals Product Nancy Alford Permanently, the first two
Admin. years in an easily
accessible place
</TABLE>
(2) General and auxiliary ledgers (or other record) reflecting all asset,
liability, reserve, capital, income and expense accounts, including:

(i) Separate ledger accounts (or other records) reflecting the
following:
(a) Securities in transfer;
(b) Securities in physical possession;
(c) Securities borrowed and securities loaned;
(d) Monies borrowed and monies loaned (together with a
record of the collateral therefore and substitutions in
such collateral);
(e) Dividends and interest received;
(f) Dividends receivable and interest accrued.

Instructions. (a) and (b) shall be stated in terms of securities quantities
only; (c) and (d) shall be stated in dollar amounts and securities quantities as
appropriate; (e) and (f) shall be stated in dollar amounts only.

General Ledger
- --------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
LNL trial Controllers Eric Jones Permanently, the first two
Balance (5000 years in an easily
series) accessible place
</TABLE>

Securities in Transfer
- ----------------------

Not Applicable.

Securities in Physical Possession
- ---------------------------------

Not Applicable.

Securities Borrowed and Loaned
- ------------------------------

Not Applicable.

Monies Borrowed and Loaned
- --------------------------

<PAGE>

Not Applicable.

Dividends and Interest Received
- -------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
LNL Trial Controllers Eric Jones Permanently, the first two
Balance (5000 years in an easily
series) accessible place
</TABLE>

<PAGE>

LN-Record Location Person to Contact Retention
- --------- -------- ----------------- ---------

Dividends Receivable and Interest Accrued
- -----------------------------------------

LNL Trial Controllers Eric Jones Permanently, the first two
Balance (5000 years in an easily accessible
series) place

(ii) Separate ledger accounts (or other records) for each portfolio security,
showing (as of trade dates), (a) the quantity and unit and aggregate price for
each purchase, sale, receipt, and delivery of securities and commodities for
such accounts, and (b) all other debits and credits for such accounts.

Securities positions and money balances in such ledger accounts (or other
records) shall be brought forward periodically but not less frequently than at
the end of fiscal quarters. Any portfolio security, the salability of which is
conditioned, shall be so noted. A memorandum record shall be available setting
forth, with respect to each portfolio security accounts, the amount and
declaration, ex-dividend, and payment dates of each dividend declared thereon.

Ledger Account for each portfolio Security
- ------------------------------------------

Daily Report Not Permanently, the first two years
of Securities Applicable in an easily accessible place
transactions

(iii) Separate ledger accounts (or other records) for each broker-dealer, bank
or other person with or through which transactions in portfolio securities are
affected, showing each purchase or sale of securities with or through such
persons, including details as to the date of the purchase or sale, the quantity
and unit and aggregate prices of such securities, and the commissions or other
compensation paid to such persons. Purchases or sales effected during the same
day at the same price may be aggregated.

Not Applicable.

(iv) Separate ledger accounts (or other records), which may be maintained by a
transfer agent or registrar, showing for each shareholder of record of the
investment company the number of shares of capital stock of the company held.
in respect of share accumulation accounts (arising from periodic investment
plans, dividend reinvestment plans, deposit of issued shares by the owner
thereof, etc.), details shall be available as to the dates and number of shares
of each accumulation, and except with respect to already issued shares deposited
by the owner thereof, prices of each such accumulation.

Shareholder Accounts
- --------------------

Master file Controllers Eric Jones Permanently, the first two
Record years in an easily accessible
place

(3) A securities record or ledger reflecting separately for each portfolio
security as of trade date all "long" and "short" positions carried by the

<PAGE>

investment company for its own account and showing the location of all
securities long and the off-setting position to all securities short. The record
called for by this paragraph shall not be required in circumstances under which
all portfolio securities are maintained by a bank or banks or a member or
members of a national securities exchange as custodian under a custody agreement
or as agent for such custodian.

<PAGE>

LN-Record Location Person to Contact Retention
- --------- -------- ----------------- ---------

Securities Position Record
- --------------------------

Maintained by State Street Mutual Funds Div. Permanently, the fist two
Custodian of Bank & Trust years in an easily accessible
Securities place

(4) Corporate charters, certificates of incorporation or trust agreements, and
bylaws, and minute books of stockholders' and directors' or trustees' meetings;
and minute books of directors' or trustees' committee and advisory board or
advisory committee meetings.

Corporate Documents
- -------------------

Not Applicable.

(5) A record of each brokerage order given by or in behalf of the investment
company for, or in connection with, the purchase or sale of securities, whether
executed or unexecuted. Such record shall include the name of the broker, the
terms and conditions of the order and of any modification or cancellation
thereof, the time of entry or cancellation, the price at which executed, and the
time of receipt of report of execution. The record shall indicate the name of
the person who placed the order in behalf of the investment company.

Order Tickets
- -------------

UIT applica- Not Six years, the first two
tions and Applicable years in an easily accessible
daily reports place
of securities
transactions

(6) A record of all other portfolio purchase or sales showing details comparable
to those prescribed in paragraph 5 above.

Commercial Paper
- ----------------

Not Applicable.

(7) A record of all puts, calls, spreads, straddles, and other options in which
the investment company has any direct or indirect interest or which the
investment company has granted or guaranteed; and a record of any contractual
commitments to purchase, sell, receive or deliver securities or other property
(but not including open orders placed with broker-dealers for the purchase or
sale of securities, which may be cancelled by the company on notices without
penalty or cost of any kind); containing at least an identification of the
security, the number of units involved, the option price, the date of maturity,
the date of issuance, and the person to whom issued.

Record of Puts, Calls, Spreads, Etc.
- ------------------------------------

Not Applicable.

<PAGE>

(8) A record of the proof of money balances in all ledger accounts (except
shareholder accounts), in the form of trial balances. Such trial balances shall
be prepared currently at least once a month.

<PAGE>

LN-Record Location Person to Contact Retention
- --------- -------- ----------------- ---------

Trial Balance
- -------------

LNL Trial Controllers Eric Jones Permanently, the first two
Balance (5000 years in an easily accessible
series) place

(9) A record for each fiscal quarter, which shall be completed within 10 days
after the end of such quarter, showing specifically the basis or bases upon
which the allocation of orders for the purchase and sale of portfolio securities
to named brokers or dealers and the division of brokerage commissions or other
compensation on such purchase and sale orders among named persons were made
during such quarter. The record shall indicate the consideration given to (a)
sales of shares of the investment company by brokers or dealers, (b) the
supplying of services or benefits by brokers or dealers to the investment
company, its investment advisor or principal underwriter or any persons
affiliated therewith, and (c) any other considerations other than the technical
qualifications of the brokers and the dealers as such. The record shall show the
nature of their services or benefits made available, and shall describe in
detail the application of any general or specific formula or other determinant
used in arriving at such allocation of purchase and sales orders and such
division of brokerage commissions or other compensation. The record shall also
include the identifies of the person responsible for the determination of such
allocation and such division of brokerage commissions or other compensation.

Not Applicable.

(10) A record in the form of an appropriate memorandum identifying the person or
persons, committees, or groups authorizing the purchase or sale of portfolio
securities. Where an authorization is made by a committee or group, a record
shall be kept in the names of its members who participated in the authorization.
There shall be retained a part of the record required by this paragraph any
memorandum, recommendation, or instruction supporting or authorizing the
purchase or sale of portfolio securities. The requirements of this paragraph are
applicable to the extent they are not met by compliance with the requirements of
paragraph 4 of this Rule 31a1(b).

Advisory Law Division John Steinkamp Six years, the first two
Agreements years in an easily accessible
place

(11) Files of all advisory material received from the investment advisor, any
advisory board or advisory committee, or any other persons from whom the
investment company accepts investment advice publications distributed generally.

Not Applicable.

(12) The term "other records" as used in the expressions "journals (or other
records of original entry)" and "ledger accounts (or other records)" shall be
construed to include, where appropriate, copies of voucher checks,
confirmations, or similar documents which reflect the information required by
the applicable rule or rules in appropriate sequence and in permanent form,
including similar records developed by the use of automatic data processing
systems.

<PAGE>

Correspondence Product Nancy Alford Six years, the first two
Admin. years in an easily accessible
place

<PAGE>

LN-Record Location Person to Contact Retention
- --------- -------- ----------------- ---------
Proxy State- Product Nancy Alford Six years, the first two
ments and Admin. years in an easily accessible
Proxy Cards place

Pricing Sheets Controllers Eric Jones Permanently, the first two
years in an easily accessible
place

Bank State- Treasurers Rusty Summers
ments

December 3, 1996