Discover Living Benefits Within a Life Policy

2 Market Overview US population is under-insured –Decline in agent population means fewer are afforded the opportunity to purchase individual life insurance –Excessive reliance on group term –Many people tend to value “living” benefits over death benefits Need for living benefits –Population aging –Concern about out-living assets –Concern of becoming a burden on children or other relatives –Public sector programs inadequate

3 Market Overview Financing long-term care is a looming national crisis –Need for long-term care will explode as population ages –Public programs are inadequate –LTC insurance is available but cost is high –“Use it or lose it” Life Settlement concepts offer a new approach to product design

4 Market Overview 60% of all Americans who reach age 65 may need long- term care at some point in their remaining lives By 2020, about 157 million Americans will be afflicted by a chronic illness Health insurance plans don’t cover certain costs associated with long-term care illness –Medicaid only pays when an individual has spent down or liquidated a substantial amount of their assets How does your client plan on paying for uninsured medical costs?

5 The Concept What if there was an innovative way to have meaningful “living” benefits within a competitive Universal Life insurance policy, which provides…

6 The Concept New and innovative approach to product design Combination of life, chronic illness, accelerated benefits and settlement concepts all in one product Policy to cover the total lifetime of insureds Protects against early death Provides a tax-free annual benefit on chronic illness certification on a “cash basis” Ability to use annual benefit for any need Ability for paid-up policy on amounts not accelerated Retains pro-rata share of existing CSV “Me” policy for the insured Life product “for the living”…

7 “Life for the Living”™ Policy Benefits Competitive Current Assumption UL Product –National Life of Vermont –Maximizes DB –Provides strong CSV’s –Premium/income flexibility –No cost rider –Rider available on all policies up to $2 million. Additional policy issued above $2 million. At Chronic Illness Trigger –Annual benefit available up to annual IRS limits ($102,200 in 2009, indexed annually) –Cash benefit—No restrictions as to the use –Income-tax free living benefits –No additional cost for the rider –Ability for paid-up policy on DB not accelerated –No waiting period

8 “Life for the Living”™ Policy Benefits Options –No restrictions on the use of benefits received –Can be used for any expense including: Uncovered medical expenses or deductibles Cover expenses for home health or friends to assist with your care Replace income or help with everyday expenses Home modifications Cover expenses for medical procedures or drug therapies Travel or entertainment Savings, replenish retirement assets or eliminate debt Make gifts to loved ones

9 “Life for the Living”™ Policy Specs Issue ages 0-85, five underwriting classes –Two Preferred NS classes –Table III to Standard Program –Two smoker classes (Preferred and Standard) Minimum face amount: $250,000 Maximum face amount with rider: $2,000,000 –Additional policy issued on policies greater than $2 million If $1 CSV at age 100, DB carries to age 120 guaranteed with no additional premiums Available on all table ratings Mortality vs. Morbidity underwriting Currently New York only Other riders (Terminal illness, Over Loan Protection)

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11 Product Positioning Competitive UL product No cost rider-Available up to $2 million of DB Flexibility of rider –Determine annual benefit ($0 to annual IRS limits) –Paid-up policy At initial trigger (yes/no) In any year thereafter if still cannot perform 2 of the 6 ADL’s –CSV reduced by annual % reduction of DB –If there is a high CSV, might use current values to pay future premiums –Possibly take paid-up policy and use CSV tax-free income to basis Cash benefit vs. reimbursement of expenses Can be written in a Trust Expedited Regulation 60 process Perfect Buy/Sell product One-of-a-kind product

12 “Life for the Living”™ National Life Insurance Company –Mutual holding company –Innovative products –Strong sales results Ratings –A (Excellent): AM Best –A+ (Strong): S&P –A 2 (Good): Moody’s –Comdex of 81 $20+ billion of assets $60+ billion insurance in-force

13 “Life for the Living”™

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16 “Life for the Living”™ Underwriting Programs Table III to Standard Rider on all policies regardless of the rating class up to $2 million Mortality vs. Morbidity underwriting BreakThrough –Preferred or Standard Term policy within last 5 years –Conversion to “Life for the Living TM ” –No underwriting, most companies on approval list –Maximum Death Benefit: $1 million JumpStart –Preferred or Standard UL policy within last 3 years Or 5 years if had physical exam in last 24 months –Replacement of current contract not required –No underwriting, most companies on approval list –Maximum Death Benefit: $1 million

17 “Life for the Living”™ Quotes “Finally a policy that recognizes the importance of paying a benefit when your clients need it most!” “A life product that also offers protection in the event of a chronic illness.” “Why would I sell anything else!”

Discover Living Benefits Within a Life Policy