Lincoln Level Advantage 2 Advisory Registered Indexed Linked Annuity In-depth Review

How Does the Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) Work?

The Lincoln Level Advantage is a Registered Index-Linked Annuity (RILA) that provides a combination of market-linked growth, downside protection, and customizable features. It allows policyholders to balance risk and reward by selecting from multiple allocation options, including indexed and fixed-rate accounts. Here’s a detailed breakdown of how it works:

Initial Setup and Funding

Minimum Payment: $25,000

Maximum Payment (Without Prior Approval): $2,000,000

Issue Age: 0 to 85 years old

Plan Types: Traditional IRA, Roth IRA, SEP IRA, Beneficiary IRA, Non-Qualified, Non-Qualified Beneficiary (Stretch)​

After making an initial payment, policyholders have the flexibility to choose how their funds will be allocated across various indexed accounts. These allocation choices play a major role in how the annuity performs over time. Apart from the regular crediting period, there are various events that may trigger earnings credit: On free withdrawals, for a long-term care event or terminal illness or injury event, or when a death benefit is payable. All these interest credits are credited to a bucket called “Account Value.” This bucket is your annuity account balance, and all your withdrawals take place from it.

The Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) offers the annuitant to choose from one or more crediting strartegies linked to seven indexes/ETFs (S&P 500 Index, Russell 2000 Index, MSCI EAFE Index, Capital Strength Index, First Trust American Leadership Index, Capital Group Growth ETF, and Capital Group Global Growth Equity ETF) to determine their earnings crediting formula:

The Standard & Poor's 500 (S&P 500) is a stock market index that tracks the performance of 500 large-cap U.S. companies across various industries. It serves as a key indicator of the overall health of the U.S. equity market and is widely used as a benchmark for investment performance.

The Russell 2000 Index, on the other hand, focuses on approximately 2,000 small-cap U.S. companies, offering exposure to emerging businesses across diverse sectors. Unlike the large-cap focus of the S&P 500, the Russell 2000 captures the growth potential of smaller, more dynamic companies, making it suitable for investors looking for higher growth opportunities, albeit with increased volatility. This index serves as a benchmark for small-cap equity performance and can help diversify an annuity portfolio with exposure to companies that may have significant expansion potential.

MSCI EAFE Index – A widely used benchmark tracking large- and mid-cap stocks across 21 developed markets outside the U.S. and Canada, including Europe, Australasia, and the Far East. It provides broad exposure to international developed equity markets.

Capital Strength Index – Focuses on U.S. companies with strong balance sheets, high cash reserves, and consistent profitability. The index emphasizes financial stability and quality, aiming to identify firms better positioned to weather economic downturns.

First Trust American Leadership Index – Targets U.S. companies that demonstrate leadership within their industries through market share, profitability, and innovation. It seeks to capture firms with sustainable competitive advantages and strong growth prospects.

Capital Group Growth ETF – An actively managed ETF investing primarily in U.S. companies with above-average growth potential. It blends large, established growth names with select emerging leaders, aiming for long-term capital appreciation.

Capital Group Global Growth Equity ETF – An actively managed ETF that invests in growth-oriented companies worldwide, including both developed and emerging markets. The strategy focuses on businesses with strong fundamentals, innovative products, and potential for sustained earnings growth.

Choosing the right index for an annuity strategy depends on an individual's financial goals and risk tolerance. The S&P 500 provides steady and consistent returns through exposure to large, established companies, while the Russell 2000 offers greater growth potential with higher volatility by focusing on smaller, emerging businesses. The MSCI EAFE Index adds diversification through developed international markets, which can help reduce reliance on U.S. market performance. Specialty indexes like the Capital Strength Index and the First Trust American Leadership Index provide targeted exposure to high-quality, financially strong companies or industry leaders. Actively managed options such as the Capital Group Growth ETF and Capital Group Global Growth Equity ETF offer professional management with the potential to adapt to changing market conditions. A well-chosen combination of these options within an indexed annuity can balance growth potential, downside protection, and diversification to align with annuitant’s long-term retirement objectives.

Account Options

The initial premium can be allocated across multiple risk-controlled accounts. These include a mix of 1-year, 3-year, and 6-year term accounts. The 6-year accounts offer the potential for higher returns through cap rates, while the 1-year accounts provide more flexibility by allowing annual adjustments and lock-in gains.

The earnings crediting formula

The earnings crediting formula is the most important part of this annuity discussion. It is important to know that we don’t simply get the index return credited to our annuity. There are a few caps and other rate limitation mechanisms that the company has in place that affect your earnings. These rates tend to change over time, and the updated rates can always be checked on the company’s website or with your trusted financial advisor.

Let’s have a look at the Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) rate sheet (as of August 2025) to understand how the earnings are determined.

From the above rate chart, you will notice that there are seven indexes and multiple interest-crediting options tied to those indexes. Let’s have a look at different terms that are used by the company in the Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) rate chart:

Performance Cap Rate: Available in 1-year and 6-year terms. This refers to the rate at which your interest-earning capacity is capped. For example, if an index returns 12% but the contract’s cap rate is 8%, the annuitant will be eligible for an interest credit of 8% only. It doesn’t matter how much the index goes above the cap rate; the maximum interest that can be earned is the cap rate. 

Participation Rate: Available in 3-year and 6-year terms. With this method, you earn a percentage of the index’s positive performance over the term. If the index is negative or flat, no interest is credited, but you do not lose principal. The percentage you earn is called the participation rate.

Example:

Participation rate = 110% Index return = +50% → Credited interest = 110% × 50% = +55% Index return = +40% → Credited interest = 110% × 40% = +44% Index return = –10% → Credited interest = 0% (no loss, just no gain)

This strategy works best in periods of strong index performance, since you participate in a share of the upside.

Performance Trigger Rate: Available in 1-year terms. Here, you get a fixed trigger rate if the index return is zero or positive at the end of the term. If the index is negative, no interest is credited, but your account value stays the same.

Example:

Trigger rate = 7%

Index return = +3% → Credited = +7% (you get the full trigger rate, not the actual index return)

Index return = 0% → Credited = +7% Index return = –2% → Credited = 0% This can be attractive in flat or slightly positive markets, as it rewards you with the same fixed rate even if actual index growth is minimal.

Dual Performance Trigger: Available in 1-year terms. This method expands the trigger concept by paying the trigger rate if the index is up, flat, or down within your chosen protection level. If the market drops more than your protection level, the trigger rate is used to offset that excess loss.

Example:

Trigger rate = 6% Protection level = –10% Index return = +4% → Credited = +6% Index return = 0% → Credited = +6% Index return = –8% (within –10% protection) → Credited = +6% Index return = –15% (5% worse than –10% protection) → Credited = –5% (loss beyond protection partially offset by trigger)

This approach can still generate positive returns in slightly down markets while providing a cushion in deeper declines. At first glance, this appears to be a more logical choice than selecting the Performance-Triggered index option; however, the trade-off is a lower trigger rate compared to the Performance-Triggered option (7.25% vs 12.00% for the S&P 500 Index with a 10% protection).

Dual Plus Accounts: Available in 6-year terms. The Dual Plus strategy offers two dual rate options - 10% and 15%, and applies over a 6-year term. At the end of the term, if the index performance is up or flat, you receive the greater of your chosen dual rate or the actual index performance, subject to the performance cap. If the index is down, the dual rate is added to the index performance to help offset losses, which can result in a positive return if the decline is within your protection level. Losses beyond the protection level reduce the credited amount.

Example with 15% Dual Rate and 150% Performance Cap (6-Year Term, $100,000 Investment):

The dual rate provides a solid baseline in flat or modestly positive markets. In down markets, the dual rate cushions losses up to your protection level. Note that the 6-year term means returns (positive or negative) are measured over the entire period, not annually.

Risk and Reward Control Customization

The Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) offers various crediting strategies that allow annuity holders to customize their exposure to market risk and reward. Below is an explanation of the terms in the rate chart, along with an example to demonstrate how they function:

1. Protection: The protection is the percentage of market loss that Lincoln absorbs during the crediting period. For example, a 10% protection means that if the market declines by up to 10%, the annuity holder does not incur any losses. However, if the market loss exceeds the protection, the policyholder’s account value will be reduced by the excess loss.

Example:

Market decline: 12%
Protection: 10%
Loss incurred by policyholder: 2% (12% - 10%)

2. Secure Lock+ Feature: It is an optional feature of the Lincoln Level Advantage 2 Advisory index-linked annuity that allows you to “lock in” gains during your term without waiting for the end date. When you activate Secure Lock+, your current indexed account value is preserved, and you have the choice to either automatically reset the account on your next monthly anniversary or hold the locked value until your next yearly anniversary. Once the account resets, your protection level remains the same, but you start with a new performance cap and a fresh starting index value for the remainder of the term.

For example, Paula invests $100,000 in a 6-year indexed account with 20% downside protection. Midway through the term, her account grows to $150,000. Concerned about market volatility, she decides to use Secure Lock+ to capture the gain. Her account value is locked at $150,000 until it resets on her next monthly anniversary. At that reset, she keeps her 20% protection level but receives a new performance cap based on current market conditions (example 24%). From there, her growth potential starts anew, and she can use Secure Lock+ again (up to once per year) if another opportunity to lock in gains arises. This feature provides added control and the ability to protect accumulated gains while still participating in future market performance.

The Secure Lock+ is useful when you want to secure gains during favorable market conditions and protect your earnings from potential future market downturns, especially if you believe that the index has peaked for this crediting period, allowing you to lock in returns without waiting for the full term to end.

Among the available indexing strategies, the following options stand out to me:

Among the available indexing strategies, I would suggest allocating premiums to the following options based on their balance of growth potential, protection, and flexibility:

S&P 500 – 6-Year Performance Cap with 25% Protection: This option offers a very high cap of 350%, giving strong upside potential over a long term while still providing meaningful downside protection. The extended term works well for investors confident in long-term U.S. equity growth.

MSCI EAFE – 1-Year Performance Cap with 10% Protection: This adds international developed market exposure, which helps diversify away from U.S.-only risk. The 23% cap with a 1-year term is attractive for capturing shorter-term global market rebounds.

Russell 2000 – 6-Year Performance Cap with Annual Lock, 10% Protection: Small-cap U.S. stocks can deliver higher growth over time, but they’re volatile. The annual lock feature allows you to secure gains in good years while maintaining exposure for the remainder of the 6-year term, helping manage small-cap volatility.

S&P 500 – 1-Year Performance Cap with 15% Protection: This is a balanced, shorter-term S&P 500 strategy for those who want to participate in U.S. large-cap growth but with a more frequent reset period and reasonable downside buffer.

S&P 500 – 1-Year Performance Trigger with 10% Protection: This strategy is appealing in flat or slightly positive markets, as you still receive a solid credited rate (12.75%) even if the index posts minimal growth, all while keeping a 10% downside cushion.

Capital Group Growth ETF – 1-Year Performance Trigger with 10% Protection: This option credits 13.75% if the ETF posts a flat or positive return at the end of the term, regardless of the actual index gain, making it attractive in modest growth or sideways markets. The 10% protection level adds another layer of defense against short-term declines.

You have the flexibility to allocate your premium across multiple crediting strategies, allowing you to diversify your growth potential based on different market indices and risk levels. This enables a balanced approach by combining strategies with varying buffers, participation rates, and cap structures.

Surrender/Early Withdrawal Charges

For the Advisory version of the Lincoln Level Advantage 2 RILA, you are allowed a 100% free withdrawal of your contract value without incurring charges, fees, penalties, or market value adjustments (MVA).

Note: You may only purchase a Lincoln Level Advantage 2 Advisory Registered Indexed Linked Annuity if you are a participant in an account established under a fee-based program that is sponsored and maintained by a broker/dealer or other financial intermediary approved by Lincoln Financial Group.

Contract/Administrative Charge

The Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) does not impose any annual contract or administrative fees.

Who Is This Annuity Suitable For?

The Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) is designed to meet the needs of a diverse group of investors seeking both growth potential and protection from market losses. With its customizable blend of protection, triggers, participation rates, and caps, it offers a level of control that appeals to a variety of financial goals and risk tolerances. Below, we outline who is most likely to benefit from this annuity.

Pre-Retirees and Retirees Seeking Customizable Risk and Reward: Ideal for those seeking protection against market losses, but with the potential for upside growth.

Investors with a Medium to Long-Term Investment Horizon: Best for those who can commit funds for 6 years to maximize growth potential through higher participation rates.

Those Seeking Tax-Deferred Growth: Provides tax-deferred growth, making it a good option for those looking to reduce current tax liabilities while growing wealth.

Who Might Not Find This Annuity Suitable?

While the Lincoln Level Advantage 2 Advisory Registered Index-linked Annuity (RILA) offers plenty of customization and protection features, it may not suit everyone. Here’s who might want to reconsider:

Individuals Seeking Maximum Growth: The use of caps and participation may limit upside growth, which could be less appealing to those looking for unlimited market participation.

People With Short-Term Liquidity Needs: Withdrawals beyond the 10% free withdrawal limit are subject to surrender charges and interest adjustments, which may not work for those needing frequent access to funds.

Young Investors: Younger individuals with a longer time horizon may prefer more aggressive growth-focused investments, such as equities or ETFs, rather than a structured annuity.

Company Details

You must always keep in mind that, unlike CDs, annuities are not guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other federal insurance agency. An annuity's "guarantee" is only as strong as the insurance company that issues the annuity, so it is always important to assess the issuing company before buying an annuity.

Lincoln National Life Insurance Company

Lincoln National Life Insurance Company has been in the business since 1905. It is one of the largest and oldest providers of fixed and fixed indexed annuities in the US and has been regularly in the top ten Fixed Indexed Annuity Sales.

It is rated as follows by the rating agencies:

Lincoln National Life Insurance Company has managed to maintain decent ratings for many years. It is considered to be strong and stable financially. In 2024, the company paid out nearly $7.9 billion in claims and benefits. As of year-end 2024, some of the other financial highlights for Lincoln National Life Insurance Company include its:

$18.44 billion in total sales / direct written premium

$8.26 billion of stockholders’ equity

$1.7 billion in comprehensive income

$390.8 billion in total assets

Thus, going by the operating history and financial numbers, we can safely gauge that you can trust your savings with Lincoln National Life Insurance Company.

Conclusion

With the advancements in healthcare and technology, the average American today lives longer than ever. So, it’s very important to have a retirement corpus that can grow safely and steadily and have the ability to provide a fixed stream of income during the retirement years. This not only helps you mitigate the risk of outliving your income but also ensures that you continue to live a decent life even in your retirement.

The Lincoln Level Advantage 2 Advisory Registered Index-Linked Annuity (RILA) offers a balanced approach to retirement planning by combining market-linked growth potential with built-in downside protection features. The Level Advantage 2 Advisory RILA offers flexibility with multiple indexing options, including the S&P 500, MSCI EAFE, and Russell 2000, catering to different risk appetites and financial goals. Whether investors prioritize stable returns with strategies like triggers or aim for higher accumulation through enhanced cap and participation, the Level Advantage 2 Advisory RILA provides a versatile solution. However, it's important for potential buyers to carefully evaluate their risk tolerance, growth expectations, and fee implications to determine if this product aligns with their long-term retirement strategy.

We understand that choosing the right annuity can be a complex decision, influenced by a myriad of factors such as market conditions, individual financial goals, and evolving life circumstances. To better serve you in this critical decision-making process, we regularly conduct in-depth reviews of various annuity products, examining features, costs, and potential benefits. To dive deeper into our extensive reviews, click here.