Underscoring the rough times that have befallen the insurance industry, Radnor-based Lincoln Financial Group said yesterday that it would seek up to $950 million from a federal bailout program as part of a plan to raise more than $2 billion.

The rest of the capital plan involves the insurance company's sale of $600 million in common shares, with a 30-day option for underwriters to purchase up to an additional 15 percent, or $90 million, in stock.

Lincoln also aims to issue $500 million in senior debt.

To further shore up its U.S. businesses, Lincoln also said yesterday that it would sell its United Kingdom subsidiary, Lincoln UK, to Sun Life Financial Inc. of Toronto for estimated proceeds of $280 million to $300 million. The deal is expected to close Sept. 30.

Lincoln shares closed at $15.83 yesterday on the New York Stock Exchange, down $1.92, or 10.8 percent. While the company uses Lincoln Financial as its operating name, the shares trade under its official corporate name, Lincoln National Corp.

In April, shares in Lincoln soared 33 percent after the U.S. Treasury confirmed it was reviewing the company's application for federal bailout money. Last month, Lincoln received preliminary approval for up to $2.5 billion through the Capital Purchase Program.

Lincoln said yesterday that it would determine the exact amount of government funding by the end of this month. In return, the Treasury will receive shares of Lincoln preferred stock.

In a statement, Lincoln said it would "repay this financing as soon as practicable, taking into consideration appropriate balance sheet strength and capital markets conditions."

Capital Purchase, part of the $700 billion Troubled Asset Relief Program, or TARP, was created in October to help banks and savings and loans build capital to, in turn, increase the flow of financing to businesses and consumers.

TARP's reach has since been expanded to include insurance companies, whose investments in the stock market also have suffered. They have been under pressure to enhance capital positions to avoid ratings downgrades. Lower ratings chase customers to stronger rivals and create higher operating costs because creditors charge more.

The company, after which the Philadelphia Eagles' stadium is named, has posted two straight quarters of losses, totaling $1.1 billion.

Standard & Poor's Corp., the ratings firm, upgraded Lincoln's rating from negative to stable yesterday on the company's word that it would divert about $1 billion of the proceeds that were raised to its principal insurance subsidiary, the Lincoln National Life Insurance Co. The other $1 billion will be used for general corporate purposes, the company said, including repayment of short-term debt and investment in core businesses.

In January, regulators approved Lincoln's request to become a savings and loan holding company, which laid the groundwork for its consideration for TARP financing. The same month, the company announced it was eliminating about 5 percent of its workforce, or 540 jobs. Lincoln reported just more than 10,800 employees as of Dec. 31, 2007.

Among Lincoln Financial's cost cuts, it slashed its quarterly dividend in February to a penny per share, from 21 cents. Until October, the dividend had been 41.5 cents.

Contact staff writer Diane Mastrull at 215-854-2466 or dmastrull@phillynews.com.