© 2010 Standard Insurance Company Immediate Annuities Product Training Module for the Tailored Income Annuity and Stable Income Annuity

© 2010 Standard Insurance Company TIA and SIA Overview and Key Product Features Income Options TIA Life Income Commutation Example Suitability Analysis During the Sales Process Compensation and Sales Support Immediate Annuity Training 2

© 2010 Standard Insurance Company Immediate Annuity Overview

© 2010 Standard Insurance Company The Tailored Income Annuity (TIA) and Stable Income Annuity (SIA) from The Standard are single-premium, immediate annuities. These annuities can provide the transition from an accumulation phase to an income phase of retirement, when a safe, secure source of income is critical. They also can be vehicles to convert large, lump-sum payments of insurance proceeds, divorce settlements, or large-ticket sales into income producing annuities. Special options available allow the addition of the Life Income Commutation feature (TIA only) and the Inflation Protection feature to many of the payment options. The Standard’s immediate annuities are excellent ways to maintain an income stream that is matched to personal needs while adding the flexibility of lump-sum payment options. Issue Ages – The maximum issue age on an annuitant or owner is 90. Annuitants and Owners – The TIA and SIA do allow the option of joint ownership and/or joint annuitants. Tax Qualified Options -- This annuity may be established as an IRA (Traditional, Roth, or SEP), 403(b) Tax-Sheltered Annuity, or Qualified Pension. Non-qualified funds may also be used to establish the annuity. Premium – $15,000 is the minimum initial premium necessary to establish the contract. $1,000,000 is the maximum initial premium allowed for establishing an immediate annuity; higher amounts may be permitted with prior approval from the home office. Payment Modes – Income payments may be elected at the time of application on a monthly, quarterly, semi-annual or annual basis. The modal period may not be changed once payments commence. Selected payment period must be five years or longer. Immediate Annuity Overview 4

© 2010 Standard Insurance Company Optional Features Include: Inflation Protection – On many of the income options, an election may be made to guard against the effects of inflation with an annually increasing payment of 1%, 2%, 3%, 4% or 5%. If this option is selected at the time of application, the increased payments would begin one year after the first payment and would increase annually thereafter. Life Income Commutation (TIA Only) – A special, optional feature available in the Tailored Income annuity allows the addition of a commutation feature to many of the life income payment options. If this feature is added at the time of application, in any contract year (after the initial two years) up to 10% of future benefits may be commuted to a lump-sum payment. After exercising this feature the remaining payments will be reduced by the percentage commuted. A maximum of 20% of future payments can be commuted over the lifetime of a contract. Immediate Annuity Overview 5

© 2010 Standard Insurance Company Income Options

© 2010 Standard Insurance Company With The Standard’s immediate annuities, you’ll find several payment options to present to your client. We know that some retirees will prefer regular installment payments for a specified period; others will want a predictable, guaranteed lifetime income. Whatever the long-term goals and financial needs, The Standard has an option to match. Certain Period – A guaranteed income for a time period chosen (5, 10, 15, or 20 years). At any time, benefits may be commuted to a lump-sum payment. If the annuitant dies prior to the end of the period specified, payments continue to the beneficiary until the end of the period (or may be commuted to a lump-sum payment). Life Income – A guaranteed income for as long as the annuitant lives. Payments will cease upon the death of the annuitant. Life Income with Installment Refund – A guaranteed income as long as the annuitant lives. The total payments will never be less than the total of the funds paid to purchase this option. If the annuitant dies before receiving at least that amount, payments continue to the beneficiary until the full amount is repaid (or may be commuted to a lump-sum payment). Life Income with Certain Period – A guaranteed income for as long as the annuitant lives. If the annuitant dies prior to the end of the period specified (5,10,15,or 20 years), payments continue to the beneficiary until the end of the period ( or may be commuted to a lump-sum payment). Income Options 7 Optional ● TIA – Life Income Commutation and Inflation Protection ● SIA – Inflation Protection Optional ● TIA – Life Income Commutation Optional ● TIA – Inflation Protection ● SIA – Inflation Protection

© 2010 Standard Insurance Company Joint and Survivor Life Income – A guaranteed income for as long as both annuitants live. When either annuitant dies, payments will continue at 50%, 66 2/3%, 75% or 100% of the payments received when both were living. Payments will cease upon death of both annuitants. Joint and Survivor Life Income with Installment Refund – A guaranteed income for as long as both annuitants live. The total payments will never be less than the total of the funds paid to purchase this option. If both annuitants die before receiving at least that amount, payments continue to the beneficiary until the full amount is repaid (or may be commuted to a lump-sum payment). Joint and Survivor Life Income with Certain Period – A guaranteed income for as long as both annuitants live. When either annuitant dies, payments will continue at 100% of the payments received when both were living. If both annuitants die prior to the end of the period specified (5, 10, 15 or 20 years), payments continue to the beneficiary until the end of the period (or may be commuted to a lump-sum payment). Joint and Contingent Survivor Life Income – A guaranteed income for as long as both annuitants live. If the primary annuitant dies first, payments will continue at 50% of the payments received when both were living. If the contingent annuitant dies first, payments will continue at 100% of the payments received when both were living. Payments will cease upon death of both annuitants. Income Options 8

© 2010 Standard Insurance Company TIA Life Income Commutation Example

© 2010 Standard Insurance Company Frank is retiring early. Age:55 Premium: $100,000 Income Option: Life Income Optional Feature: Life Income Commutation Monthly Payment: $544 TIA Life Income Commutation Example 10 Today Frank is buying an immediate annuity. He is choosing the Life Income payment option and will receive $544 every month as long as he lives. He is also adding the Life Income Commutation feature, as he knows there are many unplanned events that could happen during such a long retirement. Eight years from now, Frank will find himself in need of a knee replacement. Realizing he can do with less than his current monthly income, he will choose to commute 7 percent of his future annuity payments and use the $5,340 to help offset the costs. Exercising this feature will reduce his lifetime monthly payments to $506. Four years later, Frank will find that his daughter is in need of financial assistance after being laid off from her job. Frank this time will commute 10 percent of his future payments, the maximum available to him during any contract year. After the payout of $6,870, he will find himself with a monthly income of $452 for the duration of his life – and he still has the option to commute 3 percent more during any future contract year if he finds the need. Commutation is a substitution or exchange of one kind of payment for another. With the Tailored Income Annuity some routine, ongoing payment streams may be “commuted” to a lump-sum payout. A T A G L A N C E For illustrative purposes only; results may vary

© 2010 Standard Insurance Company TIA Life Income Commutation Example Year Year $506 / Month Year 1 – 8 $544 / Month Year 13 + $452 / Month 7% Commutation Year 8 Payout $5,340 10% Commutation Year 12 Payout $6,870 Payment $ Client: Frank Age: 55 Premium: $100,000 Income Option: Life Income Monthly Payment: $544 For illustrative purposes only; results may vary

© 2010 Standard Insurance Company Suitability Analysis During the Sales Process

© 2010 Standard Insurance Company Is the Product Right for Your Client? In recommending an annuity to a client, suitability regulations require a producer to have “reasonable grounds” to believe the recommended annuity is suitable for that particular client on the basis of facts disclosed by the client during the sales process. A producer should obtain and analyze the client’s: Age Annual Income Financial Situation and Needs (including financial resources used to fund the annuity) Financial Experience Financial Objectives Intended Use of the Annuity Financial Time Horizon Existing Assets (including investments and life insurance holdings) Liquidity Needs Liquid Net worth Risk Tolerance Tax Status Suitability Analysis During the Sales Process 13

© 2010 Standard Insurance Company As a result of a producer’s review of the previous, and analysis to determine suitability, the producer must have a “reasonable basis to believe:” The client has been “reasonably informed of the various features of the annuity” – this includes the surrender charge amounts; potential tax penalties associated with the sale, exchange, surrender or annuitization of the annuity; mortality, expenses and investment advisory fees; potential charges for and features of riders; limitations on interest returns; insurance and investment components and market risk; The client would benefit from certain features of the annuity, such as tax-deferred growth, annuitization, death benefits or living benefits; The particular annuity as a whole, any index accounts to which funds are allocated at the time of purchase or exchange of the annuity, and any riders and similar product enhancements, are suitable for the client based on his/her suitability information; and (If applicable) an exchange or replacement is suitable, taking into consideration whether the client: – Will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits (such as death, living or other contractual benefits), or be subject to increased fees, investment advisory fees or charges for riders and similar product enhancements; – Would benefit from product enhancements and improvements; and – Has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding 36 months. The Producer Must Have Reasonable Basis to Believe: 14

© 2010 Standard Insurance Company Sales Support

© 2010 Standard Insurance Company Please contact your NMO or our sales team The Standard sales team phone: The Standard sales team alias: Marketing Materials: New Business Forms and Materials: New Business Submission Annuity New Business, P5C The Standard PO Box 711 Portland, OR Street Address for Overnight Deliveries Annuity New Business, P5C The Standard 1100 SW Sixth Avenue Portland, OR Sales Support 16