Level Advantage 2 Income Advisory review

It depends on what you want it to do. For a fee-based advisory client who wants protected lifetime income and is comfortable with a structure that buffers losses rather than eliminating them, this is a good annuity. It is less appealing for someone who wants their principal fully guaranteed, who wants the simplest possible contract, or who is shopping purely for accumulation with no interest in turning on income. The buffer-plus-income-rider design is the whole point here, so the product only makes sense if both halves of that design fit your plan.

The main reason to buy this annuity is to build and then collect protected lifetime income while keeping more growth potential than a fully protected fixed indexed annuity would offer. The buffers let the account chase higher index gains, and the built-in ProtectedPay Select rider converts that account into income you cannot outlive, with a deferral bonus that raises your starting payout rate by 0.25% for every year you wait, up to 15 years or age 85. The second reason is the wrapper itself: because this is the advisory share class, there is no surrender period and no surrender penalty, so the money is not locked up the way it would be in a commission-based RILA. For an advisor managing a fee-based account, that combination of income guarantees and liquidity is the draw.

I think this annuity is best for someone in the pre-retirement or early-retirement window — roughly age 55 to 75 — who works with a fee-based advisor, wants a future lifetime income stream, and can accept that a buffer softens but does not erase market losses. It fits naturally inside a managed advisory account because the advisory share class strips out the surrender schedule. It works for both qualified and non-qualified money, and RMD withdrawals are handled without disrupting the Estate Lock death benefit guarantee, which matters for IRA owners. It is less attractive for someone who wants their principal fully protected, who is uncomfortable watching the account value swing with the markets, or who has no intention of ever turning income on — that buyer is paying for a rider they will not use. The minimum premium is $25,000, so it is not built for very small balances.

You are not buying direct stock market ownership, and you are not buying full principal protection either. You are buying a structured annuity that links your return to an index, cushions a defined slice of the losses, and then layers a lifetime income guarantee on top. The "buffer" is the key word: Lincoln absorbs the first portion of any index loss — between 10% and 25% depending on the strategy you pick — and you absorb anything beyond that. So if you choose a 10% buffer and the index falls 18%, Lincoln eats the first 10% and your account drops by the remaining 8%. In exchange for taking on that risk, you get higher caps and participation rates than a fully protected fixed indexed annuity would give you. The income rider then takes the account value, tracks a separate benefit base, and lets you draw a guaranteed percentage of that base for life. In plain terms, this is a growth-with-guardrails contract wrapped around a lifetime paycheck.

The headline feature is the built-in Lincoln ProtectedPay Select lifetime income rider. It works on two tracks. The first track is the benefit base, which is the figure your future income is calculated from — separate from your actual account value. While you defer income, the rider applies a Deferral Bonus that adds 0.25% each year to your initial Protected Annual Income (PAI) rate, for up to 15 years or until age 85, whichever comes first. The longer you wait to start income, the higher your starting withdrawal percentage. The second track is the payout: once you activate income, you receive a Protected Annual Income amount for life, available as a single-life or joint-life payout. A joint payout covers two lives and costs slightly more.

The underlying growth comes from the index strategies you allocate to. You can choose among Annual Point-to-Point, Performance Trigger, Term End Point, and Dual Performance Trigger crediting methods, tied to indices including the S&P 500, Russell 2000, MSCI EAFE, and several proprietary or fund-linked indices. Each strategy pairs a buffer (10% to 25%) with a cap or participation rate. The rates effective March 5, 2026 ranged widely — from roughly 8% caps up to several-hundred-percent participation on certain strategies — but those numbers move with each rate sheet, so anyone shopping this should ask for the current rates rather than rely on a snapshot. The crucial point is that one of these strategies — Dual Performance Trigger — can credit a fixed amount even in a flat or modestly negative year, which is the structural feature that helps support the income guarantee.

The most meaningful secondary feature is the death benefit menu, because it changes what happens to the money if you die before or during the income phase. There are three options. Estate Lock costs 0.45% a year and pays the greater of your full original investment or the account value, and — importantly — your income payments do not reduce that guarantee, so heirs are protected even after you have drawn income for years. Guarantee of Principal returns at least your full investment adjusted for withdrawals; it is free for ages 45 to 75 and costs 1.00% for ages 76 to 85. The Account Value option, available only for ages 76 to 85, simply pays whatever the account is worth at death and carries no charge.

This menu matters because it lets the buyer decide how much legacy protection to pay for. Someone whose main goal is income for themselves might take the free or low-cost option, while someone who wants to guarantee heirs get the original investment back regardless of market performance can pay 0.45% for Estate Lock. There is also a meaningful backstop on the income side: if the account value ever reaches zero, your lifetime income still continues, and a beneficiary can still receive the initial investment adjusted for withdrawals if that figure is above zero.

This is where the advisory share class is genuinely friendly. There is no surrender period and no surrender-charge schedule at all, and no market value adjustment (MVA — a penalty that fluctuates with interest rates) applies. That is unusual for a RILA and is a direct consequence of buying the fee-based advisory version rather than a commission-based one. Free withdrawals follow the rider rules: you must leave at least $1,000 in the account, and the accessible amount for ages 45 to 75 is the greater of full account value or premiums paid, less an adjustment for prior withdrawals; for ages 76 to 85 it is the full account value.

The one nuance to understand is how withdrawals interact with the income and death benefit guarantees. Protected Annual Income withdrawals and RMDs do not reduce the Estate Lock death benefit guarantee, which is exactly the behavior an IRA owner taking required distributions wants. But excess withdrawals — anything above your protected income amount — reduce both the benefit base and the death benefit proportionally, which can permanently shrink your future income. So even though the money is liquid in the sense that there is no surrender penalty, pulling large lump sums above the protected amount works against the very guarantees you are paying for.

The biggest cost is the income rider. ProtectedPay Select charges 1.45% of the benefit base for a single-life payout and 1.55% for a joint payout, deducted annually, with a contractual maximum of 2.75%. That fee buys the lifetime income guarantee and the 0.25% annual deferral bonus, so the trade is straightforward: you pay roughly one and a half percent a year for a paycheck you cannot outlive. Whether that is worth it depends entirely on whether you actually turn income on — if you never activate the rider, you have paid for a guarantee you did not use.

On top of that, the death benefit option you choose can add cost: 0.45% a year for Estate Lock, or 1.00% a year for Guarantee of Principal if you are between 76 and 85. The free death benefit options carry no charge. There is no explicit charge on the indexed accounts themselves and no separate base contract fee in the available materials, so the total annual cost is essentially the income benefit charge plus whatever death benefit charge applies. Stacking the single-life rider with Estate Lock, for example, puts you near 1.90% a year before any embedded index costs. The other tradeoff is structural rather than a line-item fee: the buffers cap your downside protection at 10% to 25%, so a severe market drop still costs you real account value, and that erosion compounds against the income base if it pushes you into excess withdrawals.

Legal Entity: The Lincoln National Life Insurance Company

Parent: Lincoln Financial Group

A.M. Best Rating: A