Burt Snover, ChFC, CLU President COMPEDGE ALTERNATIVES TO TRADITIONAL LTCi Burt Snover, ChFC, CLU President COMPEDGE For Advisor Use Only

AGENDA OVERVIEW OF THE LTCi INDUSTRY ISSUES ARISING WITH TRADITIONAL LTCi ASSET BASED LTC SOLUTIONS Asset Care IV Comparison to Traditional LTC Asset Care IV Case Study Asset Care I & Indexed Annuity Care details LIFE INSURANCE ABR RIDERS (CHRONIC ILLNESS) Definition of ABR Illnesses Chronic Illness ABR comparison to Traditional LTC & LTC Riders Differences between Chronic Illness ABR Riders ANNUITY CONFINEMENT DOUBLERS Comparison to Traditional LTC For Advisor Use Only

Statistics regarding the Long Term Care Industry INDUSTRY OVERVIEW Statistics regarding the Long Term Care Industry For Advisor Use Only

INDUSTRY OVERVIEW Why Long Term Care? For Advisor Use Only THE 2Q11 SUNAMERICA RETIREMENT RE-SET SM STUDY CONDUCTED BY HARRIS INT-ERACTIVE SURVEYED A NATIONAL SAMPLE OF ADULTS AGE 55+. For Advisor Use Only

INDUSTRY OVERVIEW Why Long Term Care? How Much Does LTC Cost? How Likely Will One Need LTC1? The Expense for One Year of Long Term Care How Long Will LTC Be Needed1? 1U.S. Department of Health and Human Services National Clearinghouse for Long Term Care information website. For Advisor Use Only

ISSUES IMPACTING TRADITIONAL LONG TERM CARE INSURANCE SALES For Advisor Use Only

Issues impacting Traditional LTCI Sales Unfavorable Health History Prohibitive Premiums Today Tomorrow Use it or Lose it Limited Benefit Periods For Advisor Use Only

A DEEPER DIVE INTO OPTIONS WITH ONE AMERICA ASSET BASED LTCI A DEEPER DIVE INTO OPTIONS WITH ONE AMERICA For Advisor Use Only

ONE AMERICA ASSET CARE IV PROS TO ASSET CARE IV: Typically easier to qualify for than Traditional LTC Insurance Lifetime or Short-Pay Premiums that can NEVER increase Provides a Life Insurance Death Benefit meaning if you don’t use it for LTC then you don’t lose it Continuation of Benefits Rider (COB) can be added allowing for a double of the base policy’s benefit period OR provide LIFETIME BENEFITS for LTC protection. Ability to cover either single or joint lives Bed Reservations, Care Coordination, Caregiver Training, Supportive Equipment, Home Health Care, Homemaker Services, Hospice Care, Adult Day Care, Respite Care & International Care (state specific) are all included. COLA is available For Advisor Use Only

Asset Care IV Case study The Clients: Male – Age 55 & Female – Age 55 Wish to fully retire @ 62 Income & Life Insurance Needs met $635k in qualified sources Looking at covering LTC need BUT hesitant due to no immediate need, potential costs and lack of flexibility if not used for LTC. Here we have both a husband and wife, age 55 who which to retire at 62. For the purposes of our case study today we are going to assume their income and survivor needs are taken care of and that they see value in LTC BUT are hesitant to make such a move for many of the same reasons Robin already mentioned: High Potential Costs Use it or Lose It as well as a 3rd thing which is They do not see an immediate need. Now Robin, covered the first two issues, along with insurability, in her presentation but let me speak for a second to the 3rd issue listed. This is a big deal because clients typically don’t see value in making a LTC Insurance decision in their 50s but often times wait until it is too late to put a plan in place before costs & health issues making purchasing such a plan prohibitive. The reason we love this idea for the peak accumulation stage vs later stages is that clients in their 50s not only tend to have less budgetary issues but they are younger and therefore healthier and that is the bread and butter age for Asset Care! The key here is showing them that while they may not have an immediate need for LTC coverage how such a decision can set them up to best protect their assets long term. For Advisor Use Only

$508.88/month For Advisor Use Only Here we have both a husband and wife, age 55 who which to retire at 62. For the purposes of our case study today we are going to assume their income and survivor needs are taken care of and that they see value in LTC BUT are hesitant to make such a move for many of the same reasons Robin already mentioned: High Potential Costs Use it or Lose It as well as a 3rd thing which is They do not see an immediate need. Now Robin, covered the first two issues, along with insurability, in her presentation but let me speak for a second to the 3rd issue listed. This is a big deal because clients typically don’t see value in making a LTC Insurance decision in their 50s but often times wait until it is too late to put a plan in place before costs & health issues making purchasing such a plan prohibitive. The reason we love this idea for the peak accumulation stage vs later stages is that clients in their 50s not only tend to have less budgetary issues but they are younger and therefore healthier and that is the bread and butter age for Asset Care! The key here is showing them that while they may not have an immediate need for LTC coverage how such a decision can set them up to best protect their assets long term. For Advisor Use Only

Here we have both a husband and wife, age 55 who which to retire at 62 Here we have both a husband and wife, age 55 who which to retire at 62. For the purposes of our case study today we are going to assume their income and survivor needs are taken care of and that they see value in LTC BUT are hesitant to make such a move for many of the same reasons Robin already mentioned: High Potential Costs Use it or Lose It as well as a 3rd thing which is They do not see an immediate need. Now Robin, covered the first two issues, along with insurability, in her presentation but let me speak for a second to the 3rd issue listed. This is a big deal because clients typically don’t see value in making a LTC Insurance decision in their 50s but often times wait until it is too late to put a plan in place before costs & health issues making purchasing such a plan prohibitive. The reason we love this idea for the peak accumulation stage vs later stages is that clients in their 50s not only tend to have less budgetary issues but they are younger and therefore healthier and that is the bread and butter age for Asset Care! The key here is showing them that while they may not have an immediate need for LTC coverage how such a decision can set them up to best protect their assets long term. For Advisor Use Only

ONE AMERICA ASSET CARE I ASSET CARE I BENEFITS & DETAILS: Typically easier to qualify for than Traditional LTC Insurance One time Lump Sum Premium (COB can be paid over lifetime) so no increasing premiums. ROP benefit available Provides a Life Insurance Death Benefit meaning if you don’t use it for LTC then you don’t lose it Continuation of Benefits Rider (COB) can be added allowing for a double of the base policy’s benefit period OR provide LIFETIME BENEFITS for LTC protection. Ability to cover either single or joint lives Bed Reservations, Care Coordination, Caregiver Training, Supportive Equipment, Home Health Care, Homemaker Services, Hospice Care, Adult Day Care, Respite Care & International Care (state specific) are all included. COLA is available For Advisor Use Only

ONE AMERICA INDEXED ANNUITY CARE INDEXED ANNUITY CARE BENEFITS & DETAILS: Simplified Underwriting making it the easier to qualify for than Traditional LTC or Asset Care products. One time Lump Sum Premium so no increasing premiums. On a FIA Chassis meaning if you don’t use it for LTC then you don’t lose it Continuation of Benefits Rider (COB) can be added allowing for a double/triple of the base policy’s benefit period OR provide LIFETIME BENEFITS for LTC protection. Ability to cover either single or joint lives Bed Reservations, Care Coordination, Caregiver Training, Supportive Equipment, Home Health Care, Homemaker Services, Hospice Care, Adult Day Care, Respite Care & International Care (state specific) are all included. COLA is available (1% guaranteed COLA but can earn more based on crediting strategy returns) PPA Compliant which means 1035 Exchanges from old Annuities are allowed and any gain used for LTC purposes will be tax free! For Advisor Use Only

Benefits of ABRs offered on permanent insurance policies LIFE INSURANCE ABRs Benefits of ABRs offered on permanent insurance policies For Advisor Use Only

ABR Riders  Terminal Illness – provides for the payment of an accelerated benefit if an eligible insured has an illness or chronic condition that is expected to result in Death within 12 to 24 Months depending on carrier and state.  Critical Illness – provides for the payment of an accelerated benefit if an eligible insured experiences a critical illness. Covered critical illness includes up to 16 illnesses such as heart attacks, strokes and certain types of internal cancer. For Advisor Use Only

WHAT IS A CHRONIC ILLNESS? A Chronic Illness can be defined as: Inability to perform the activities of daily living (ADLs) bathing, continence, dressing, eating, toileting, and transferring in or out of a bed or a chair; Needing supervision because of a cognitive impairment, such as Alzheimer’s disease or other causes of dementia. For Advisor Use Only

ABR Riders For Advisor Use Only

TRADTIONAL LTC vs CHRONIC ILLNESS RIDER Traditional LTC Underwriting Based primarily on Mortality Based primarily on Morbidity Death Benefit Life Insurance Death Benefit Use it or Lose it Flexibility Most offer 2% acceleration for 50 months. No COLA & Benefit is discounted. Can customize benefit period & amount. COLA can be added & no discount on benefit. Other Benefits NA Shared Care, Care Coordination, Partnership Program, Bed Reservations, etc. For Advisor Use Only

ABR Riders CHRONIC ILLNESS RIDER- 101(g) vs LTC RIDER- 7702(b) Permanent vs Temporary Reimbursement vs Indemnity For Advisor Use Only

Permanent vs temporary LTC RIDERS - 7702(b) will allow for acceleration for any temporary or permanent long term care claims. CHRONIC ILLNESS RIDERS – 101(g) will allow for acceleration only for permanent long term care claims. TRADITIONAL LONG TERM CARE will typically pay benefits for a condition lasting at least 90 days. For Advisor Use Only

REIMBURSEMENT VS INDEMNITY LTC RIDERS - 7702(b) is typically a reimbursement rider. This means you pay a long term care bill and submit receipts to the insurance company for reimbursement (coordination of benefits may exist). All benefits are therefore tax-free. CHRONIC ILLNESS RIDERS – 101(g) is an indemnity rider. This pays the benefit directly to you in no relation to actual services received one you qualify for benefits. Amounts above the IRS Per Diem max may therefore be taxable. TRADITIONAL LONG TERM CARE policies are also typically reimbursement plans. For Advisor Use Only

Types of Chronic illness Riders Rider Type Discounted Dollar for Dollar Upfront Cost $0 Additional premium of 10%(+/-) Accelerated Benefit Benefit discounted based on: Impact on Future Mortality Discount Rate at time of acceleration Death Benefit reduced on pro-rata basis No discount on benefit Death Benefit reduced on a dollar for dollar basis Companies ANICO Lincoln Financial For Advisor Use Only

Discounted chronic illness rider… In addition, the ANICO SGUL also have built-in ABR for Chronic, Critical & Terminal Illnesses. This allows for John, should certain criteria be met, to accelerate his Death Benefit while living to cover the cost of care or to use in any ways he and his spouse deem fit. This is an added living benefit not available through SBP. For Advisor Use Only

Benefits CONFINEMENT DOUBLERS ON FIAS FIA CONFINEMENT INCOME DOUBLER Benefits CONFINEMENT DOUBLERS ON FIAS

TRADTIONAL LTC vs FIA CONFINEMENT DOUBLER Traditional LTC Underwriting No Underwriting (cannot already be confined) Based primarily on Morbidity Benefit if Not Used for LTC Underlying FIA with Income Rider Use it or Lose it Flexibility Double only lasts for a specified time period & requires a lump sum Can customize benefit period & amount. COLA can be added Other Benefits NA Shared Care, Care Coordination, Partnership Program, Bed Reservations, etc. For Advisor Use Only

Athene Ascent Pro Bonus Doubler Allianz vs Athene Allianz 222 AIM Benefit Athene Ascent Pro Bonus Doubler Waiting Period 10 Years 1 Year How Long Benefit Lasts Double continues until Accumulation Value runs to $0 Double continues until Accumulation Value runs to $0 or 5 Years whichever comes first. Confinement Covered Nursing Home, Hospital or Assisted Living Facility Nursing Home, Hospital or Hospice Care For Advisor Use Only

THANKS That is all! Thank you for your time today and let me know if you have any questions I can answer. Thanks! Phone: 800-431-4245 email: sales@compedgeusa.com