LINCOLN NATIONAL CORP

“– Market Conditions – Increases in interest rates and sustained higher interest rates may negatively affect our profitability, capital position and the value of our investment portfolio and may also result in increased contract withdrawals and surrenders” for more information on the risks related to rising interest rates.”

“We enter into derivative transactions to hedge our exposure to equity market risk. Such derivatives include over-the-counter equity options, total return swaps and equity futures. See Note 5 for additional information on our derivatives used to hedge our exposure to equity market fluctuations.”

“Includes notional and fair value of $1.4 billion and $41 million, respectively, as of December 31, 2025, and $1.9 billion and $58 million, respectively, as of December 31, 2024, that support our modified coinsurance and funds withheld reinsurance agreements. Investment results for these agreements are passed directly to the reinsurers.”

“If the level of the equity markets were to have instantaneously increased or decreased by 1% immediately after December 31, 2025, we estimate the effect on income (loss) from operations for the next 12-month period from the change in asset-based fees and related expenses would be approximately $10 million. For purposes of this estimate, we excluded any effect related to net flows, our annual assumption review, persistency, hedge program performance, policyholder behavior or reduction in account balances attributable to policyholder assessments.”

“Credit risk is the risk to earnings and capital that arises from uncertainty of an obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with contractually agreed upon terms. We are exposed to credit risk primarily by our investment holdings and through our use of derivatives.”