© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 1 __Agent Group Name___ Presents Section 79 Permanent Plan Implementing An IRS Compliant Section 79 Permanent Plan Employee Benefit Program Developed For Client Company Logo Date

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 2 Today’s Agenda Product review How to take advantage of this IRC compliant, tax-advantaged program. Discuss how to adopt and introduce this valuable benefit plan to your employee organization.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 3 Product Review

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 4 What is Section 79? Most large employers offer group term life insurance to their employees. The amount typically provided is $50,000 of “free” Group Term Life coverage to their employees. This is part of Section 79. Under IRS section 79 there are two other options that employers can offer to their employees. Employees have the option to elect a salary reduction for a portion of their payroll; similar to a 401(k) plan into the full group term or the permanent benefit option of Section 79. When the employee makes a contribution, a portion will be counted as income and be taxed currently with the remainder, growing on a tax deferred basis. The permanent option is traditionally used by highly compensated employees, because of the initial tax savings, future tax-free income and other benefits. 3 Options for Employees $50k employer paid group term life insurance Full employer paid group term life insurance Section 79 permanent insurance benefit, employee salary reduction Not taxable to employee for coverage Employee is taxed on benefit above $50k of coverage Employee reaps initial tax advantage on portion of contribution

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 5 Why Use Permanent Section 79? Recruit better employees Differentiate __client co name__ as the employer with the best retirement benefits. Retain Key Employees Tax-advantaged “pre-tax” contributions. Tax-deferred growth. Only available as a company benefit. Reward Participants Reduces participants W-2 wages and associated taxes. Tax-free distribution at retirement.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 6 A Plan Example $320k Gross Income $100k investment A Permanent Section 79 plan can be a powerful addition to an employee fringe benefit package. Here is an example of how the plan can work for a male, earning W-2 wages of $320,000, age 45 years old, non- smoker with preferred rating:

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 7 Plan Analysis Taxable equivalent required to generate $149,641 per year. Illustrated annual tax- free age 65

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 8 When __client co name__ adopts a permanent Section 79 plan, there are several significant employer advantages: All contributions (EE and ER) made to the plan are paid by __client co name__ and are 100% deductible by __client co name__ in the year paid. Payroll taxes owed by __client co name__ are reduced by the reduction of participant(s) W-2 wages. There are also many employee advantages: Plan uses pre-tax dollars with only a portion of plan contributions includible in the participant’s income. Plan assets accumulate on a tax-deferred basis. Plan includes accelerated benefit “living” riders. In the event of the participant’s death, a tax-free survivor benefit is provided. Retirement income will be received tax-free. Employer and Employee Advantages

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 9 Investment Options Employees strive to create adequate retirement funds and personal wealth. Only an IRS compliant Section 79 Permanent plan lets the employee invest an almost unlimited annual amount utilizing pre-tax funds. An investment feature Not an investment feature ABR benefits are “accelerated benefit rider” benefits. These are add-on coverage to certain Life Insurance Policies. HIPAA exempts from income tax, accelerated death benefits from life insurance contracts received on behalf of a chronically or terminally ill insured. A terminally ill person is one who has been certified by a physician as having a physical condition or illness that can reasonably be expected to result in death within two years. A chronically ill individual is one certified by a licensed health care practitioner as being unable to perform at least two activities of daily living.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 10 Almost all of the investments that people make today use after-tax $. If you are in a top tax bracket, Federal income tax makes anything you buy with after-tax $ carry a 67% tax premium over the price of the investment. That means your $500K house really costs $835K in after-tax $ and your $50K car really costs $83.5K. Only an IRS Section 79 Permanent plan lets employees invest an almost unlimited annual amount utilizing pre-tax funds. Investing With Pre-tax $ 1.Assumes 40% Federal income tax-bracket. Does not consider payroll and Medicare taxes. 2.Section 79 plans typically charge back ~ 60% of plan cost back to the client W-2 which will reduce W-2, in this case, $40k. Income tax on $60K = $24K. Income tax savings on $40k = $16K. 3.Wage reduction assumes you are still in the same tax-bracket. Depending on the investment size, this may reduce tax bracket which will affect all taxable wages. 4.Payroll tax savings estimated at an average 4.0% on top earner.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 11 Where Will Taxes Go Next? Source: Verisi Data Studio - As our government struggles with deficits and spending levels, tax rates will no doubt be reevaluated and adjusted. Now at historically low levels, if tax rates go higher, the tax mitigation and tax-free distribution benefits of a Section 79 Permanent plan will make this product an even more important retirement investment strategy option rate 39.6%

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 12 Adopting A Section 79 Plan

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 13 _ Client Co Name___ and __Agent Group__ create a plan for the introduction of Section 79 permanent life insurance benefits to employees of _ Client Co Name___. _ Client Co Name___ adopts the plan and announces the plan to _ Client Co Name___ employees. __Agent Group__ will meet with and introduce the plan options to _ Client Co Name___ employees. __Agent Group__ will work _ Client Co Name___ Human Resources department to establish a salary reduction program for the new plan. As new employees join the organization, __Agent Group__ will meet with them and introduce the plan and employee options. Adoption Process

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 14 _Client Co_ Corporation adopts Permanent Section 79 Plan. Communicate New Permanent Section 79 Plan to EE’s __Client Co__ current term offerings already fall under Section 79 OF IRC. 1. Adoption Process

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 15 Plan Adoption

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 16 Plan Adoption

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 17 Plan Adoption

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 18 Section 79 Corporate Sponsor Annual Administrative Fee $ per participant per funding year As the sponsoring company, ___________________ agrees to pay $ per participant per funding year for participation in the ____________________ Permanent Section 79 plan. Business Planning Group will provide the financial; accounting for the program’s tax deductibility at the end of each year’s premium funding. The accounting documents sent to the client will include an estimated annual premium report (in October of each funding year) and a final premium report (issued in January after year-end). This premium report is to be figured into the employee’s W-2 in accordance with US tax code regulations. Business Planning Group will invoice the sponsoring for this administrative activity in October of each year, prior to the year-end close of business. I agree to the above conditions. _______________________________________ ____________ Corporate SponsorDate Plan Administration

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 19 Implementing a Section 79 Permanent Plan

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 20 Implement Individual Plans Individual Plan design and presentation to key executives and interested EE’s. Implement individual Plans Implement individual Plans Contributions complete in 5 years. Add new plans Plan announcement with Employee communications and meetings. 1. Plans paid through salary reduction - Just like 401K plans. 4. Annual Tax Statements and Review Meetings. Meet with new EE’s. 5.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 21 Introducing the Plan to Employees __ Agent Group Name __ will support _Client Co Name__ and employees to ensure that your new plan is virtually seamless to implement. Employees will be able to meet with __ Agent Group Name __ associates and ask questions; all in a way that suits their work schedules: In-person group meetings and seminars. Webinars or conference calls. Online employee information package. __ Agent Group Name __ will meet with employee tax advisors as needed to answer plan questions.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 22 Employee Communications Prepare annual program communications - Specific invitation to “key” employees from CEO/CFO and __ Agent Group Name __ (draft letters follow). General employee invitation from HR Department and __ Agent Group Name __. __ Agent Group Name __ will follow up with all interested employees to set up meetings, answer questions about their permanent Section 79 plan and enroll interested employees. __ Agent Group Name __ will work with the HR team to ensure that enrolled plans are set up for payroll deduction. __ Agent Group Name __ will meet and follow up with employees as required regarding future plans and plan communication. __ Agent Group Name __ will also meet with future new employees as required to enroll them into the Section 79 Permanent plan.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 23 Dear (Key Employee First Name), _ Client Co Name___ is pleased to introduce you to a new employee benefit, the permanent Section 79 plan. I have reviewed this benefit personally and believe that it will be of great interest to you for the creation of significant retirement assets, protection for your family and assets during your working years and finally, mitigation of your current tax liabilities and finally, tax-free distribution upon retirement. This tax-advantaged benefit will be available to all eligible employees but does require a minimum pre-tax contribution for 5 years. Of course, the larger the contribution, the greater the benefits, both now and in the future. Here are the important features of our new benefit: Your contributions are partially funded with pre-tax earnings (this reduces your adjusted gross income and current tax liability). Plan provides tax-deferred growth. There is penalty-free access to funds before age 59½. The plan offers an accelerated death benefit for chronic or terminal illnesses. There is a tax-free death benefit for surviving beneficiary(ies). Future tax-free income distribution (Key Employee First Name), I would like to schedule an appointment for you with our benefit provider, _Agent Group Name__so that you can evaluate the impact of this new benefit program as a part of your retirement and wealth building activities. Please expect to be contacted by: Name of contact at agent group Address Phone # Website On behalf of the Management team of here at _Client Company Name__, we thank you for your many contributions to the success of our organization. I sincerely hope that you will take advantage of our new permanent Section 79 plan benefit. CEO signature CEO Letter to Key Employees

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 24 Dear Employee Name, _ Client Co Name___ is pleased to introduce you to a new employee benefit, the permanent Section 79 plan. Management and HR have reviewed this benefit and believe that it will be of great interest to you for the creation of significant retirement assets, protection for your family and assets during your working years, mitigation of your current tax liabilities and finally, tax-free distribution upon retirement. This tax-advantaged benefit will be available to all eligible employees but does require a minimum pre-tax contribution for 5 years. Of course, the larger the contribution, the greater the benefits, both now and in the future. Here are the important features of our new benefit: Your contributions are partially funded with pre-tax earnings (this reduces your adjusted gross income and current tax liability). Plan provides tax-deferred growth. There is penalty-free access to funds before age 59½. The plan offers an accelerated death benefit for chronic or terminal illnesses. There is a tax-free death benefit for surviving beneficiary(ies). Future tax-free income distribution Enclosed, you will find additional information regarding this valuable new benefit. If you would like to schedule an appointment with our benefit provider,, _Agent Group Name__, you can contact them at: _Agent Group Name__ __Address __Phone # __ __Website__ On behalf of the Management team of here at _Client Company Name__, we thank you for your many contributions to the success of our organization. I sincerely hope that you will take advantage of our new permanent Section 79 plan benefit. HR management signature HR Employee Letter

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 25 Employee Enrollment Information

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 26 Employee Enrollment Information Employees will be able to get information to guide their decisions on their Section 79 Permanent plans both online or in person. __Agent Group Name __ has built a _Client Co Name __ webpage specifically for employees of _Client Co Name __ to learn about Section 79 Permanent plans and to request information. The webpage URL is: Webpage URL Topics include: 1.Welcome letter 2.What is a Section 79 Permanent Plan? 3.View an online webinar 4.Review a sample plan analysis. 5.Next steps 6.Frequently asked questions.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 27 Coverage Options Form Employee Coverage Selection

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 28 Establishing Salary Reduction

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 29 Sample Monthly Invoice showing 5 employees Establishing Salary Reduction Establish EE eligibility, present optional plans to EE’s Sign up interested EE’s Select funding options (semi-weekly, monthly, annually or other) Company makes plan payment, receives 100% deduction at time of payment. – Make ups must be through salary reduction. – EE and ER are required to pay payroll taxes on the W-2 amount. – EE payroll taxes must be through salary reduction. – All funding must be complete by December 31 of the plan year. Annual enrollment for new EE’s

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 30 Establishing Pay Options Pay Options Bi-weeklyMonthlyAnnually Example of a $50,000 Contribution/year $50,000 Contributions per pay period $1,923$4,166$50,000 Employee payroll tax per period * $96$192$2,295 Catch up withholding for plans started after Jan. 1 Other withholding elements Total withholding * $50,000 contribution X 60.0% (est. taxable percentage) = $30,000 X 7.65% payroll tax.

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 31 Tax Forms

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 32 Estimated Tax Forms are sent out to participants each October Estimated Tax Forms

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 33 Final Tax Forms are sent out to participants each January Final Tax Forms

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 34 _ Client Co Name___ Tax Form 1120

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 35 Fill Out 1040 Forms

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 36

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 37 National Life Group is a diversified family of financial service companies that offer a comprehensive portfolio of life insurance, annuity and investment products to help individuals, families and businesses pursue their financial goals. National Life Group, a Fortune 1000 company, serves 786,000 customers. With 2013 revenue of $2 billion and net income of $142 million, members of National Life Group employ roughly 900 employees, with most located at its home office in Montpelier, Vermont. The Group is made up of its flagship company, National Life Insurance Company, founded in Montpelier, Vermont in 1848; Life Insurance Company of the Southwest, founded in 1955, Addison, Texas, and Sentinel Investments and Equity Services, Inc., all based in Montpelier. National Life Group has successfully forged a strong identity as a product innovator offering personalized service. Financial Strength Ratings for National Life Insurance Co. and Life Insurance Company of the Southwest are “A” (Excellent) by A.M. Best, “A” (Strong) by Standard and Poors and “A2” (Good) by Moody’s. National Life Group

© copyright 2014 Business Planning Group BusinessPlanningGroup.com Page 38 __Agent Group name__ assists organizations in understanding and implementing executive and employee benefit plans, deferred compensation plans, qualified retirement plans, premium financing programs and captive insurance programs. These programs assist employees within client organizations in building personal wealth and reducing personal taxes while supporting the recruiting, retaining and rewarding of successful employee teams. About __Agent Group name__ Contact __Agent Group name__ __Agent Group contact information___