Accumulation Builder IUL Sales Ideas Larry Fouts Regional Life Specialist All guarantees are based on the claims paying ability of the issuer. For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Penn Mutual Life Insurance Company 600 Dresher Road, Horsham, PA 19044

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Identifying the IUL Market ►Accumulation / Lifetime Income Sale ►Industry first introduced Indexed UL in 1997 ►More than 20 companies now offer IUL products ►The growth of indexed annuities have helped sales of indexed life products grow in recent years ►Represents a little less than 10% of all UL sales

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Identifying the IUL Market ►IUL Sales almost doubled between 2005 and 2006

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Accumulation Builder IUL ►Penn Mutual’s IUL Interest Crediting Approach ●S&P 500 with Dividends Excluded ●Annual reset on Monthly Segments ●Illustrative rate reset each month ●Current crediting rate: 8.92%* ►1 yr Avg10.36% ►5 yr Avg8.10% ►10 yr Avg8.59% ►20 yr Avg8.92% * As of 10/1/07

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. S&P 500 Index vs. Other Indices Historical ►Total Returns

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. S&P 500 Index vs. Other Indices Historical ►Returns Without Dividends

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Between 1984 and 2003, the S&P 500 Index 1 grew by 12.98%. During that time, the average investor, however, earned only 3.51% while the average market timer lost 3.29%. 2 1 The S&P 500 Index is an unmanaged index of common stock performance, considered to be representative of the stock market in general. Indexes do not have sales charges and it is not possible to invest directly in an index. Past performance is no guarantee of future results. 2 DALBAR Quantitative Analysis of Investor Behavior, Consider This…

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Accumulation Builder IUL Key Features ►Premiums allocated between a fixed and indexed account ►Minimum 2% guaranteed interest floor on both accounts ►Indexed account has a competitive cap (14%) and a 100% participation rate which is guaranteed ►Two Loan Options available (except NY) ►Annual reset of starting S&P value on index segments ►Overloan Protection Benefit available ►9 Year Surrender Charge ►Rolling Targets in most states (except NY and NH)

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. The “CAP” ►Caps set based on the company’s earned ROR and the cost of hedging the performance of the index ►Bonds “cover” product guarantees ►Leftover $$$ cover cost of hedging the index performance ►Cost of hedging determined by market volatility ►More volatility = lower cap due to higher cost of hedge ►Lower earned rate = lower cap due to less $$$ available to hedge ►Reverse is true for lower volatility or higher earned rate ►Hedging strategy limits major cap movement up or down ►Index Annuity products need to aggressively manage cap

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Accumulation Builder IUL How the Indexed Account Works ►Annual reset of segment ►Indexed account earnings are locked-in ►In years of poor S&P 500 performance, a 2% floor protects account value S&P Return Note: Assumes no charges or fees on either product 14%14% 2%2% 10%10% 2%2% 14%14%

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Probability of Doing What we show! 3 yr5 yr10 yr20 yr AnnuallyPeriod 5.0%69.7%92.5%97.9%100.0% 6.0%68.0%84.2%90.0%99.6% 7.0%63.1%78.4%83.8%99.2% 8.0%58.5%68.5%72.2%97.5%84.2% 9.0%55.2%56.0%57.3%71.0%47.3% 10.0%51.5%29.5%34.0%25.3%8.7%

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Accumulation Builder IUL - IRR Policy YearIRR on CSV Comparable After-Tax IRR with 35% Tax Bracket %N/A 50.72%0.10% %5.83% %7.29% %7.91% %8.18% Male Age 45, Preferred Plus Maximum Non-Mec Premium 7% Illustration Rate

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Accumulation Builder IUL ►Accumulation / Lifetime Income Sale ►Index Account / Index Loan (except NY) ►2% Minimum, 14% Current Cap, 100% Participation ►One-Year Point to Point Reset ►12 Investment Segments to Catch Lightening ►Volatility is a “Friend”; Stay Invested ●If Market Tanks – Get 2%; Reset at Lower Point; Earn Interest as it Climbs Back ●Balance to Other Aspects of Client’s Portfolio ►Strong IRR on CSV with Life Insurance Protection

Sec 7702(A) Plan

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Probability of Doing What we show! 3 yr5 yr10 yr20 yr AnnuallyPeriod 5.0%69.7%92.5%97.9%100.0% 6.0%68.0%84.2%90.0%99.6% 7.0%63.1%78.4%83.8%99.2% 8.0%58.5%68.5%72.2%97.5%84.2% 9.0%55.2%56.0%57.3%71.0%47.3% 10.0%51.5%29.5%34.0%25.3%8.7%

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Sec 7702(A) Plan ►A Tax-Free Retirement Income Benefit ●The tax benefits of this personal retirement strategy are made possible by utilizing a cash value life insurance policy. This is accomplished through a combination of withdrawals up to cost basis and policy loans thereafter. Policy loans and withdrawals will reduce the death benefit. This assumes that the policy remains in force and is not a modified endowment contract under IRC Section 7702A. If the policy is lapsed or surrendered prior to the death of the insured, the policy loans in excess of the cost basis will result in taxable income. ►Tax-Deferred Accumulation of Policy Values ●Cancellation of a policy in the early years may have a significant impact on policy values. A detailed illustration based on your specific facts and circumstances should be reviewed carefully before purchase. ►Individual Ownership and Control ►Access to Funds Before age 59 ½ Without Penalty* ●The tax benefits of this personal retirement strategy are made possible by utilizing a cash value life insurance policy. This is accomplished through a combination of withdrawals up to cost basis and policy loans thereafter. Policy loans and withdrawals will reduce the death benefit. This assumes that the policy remains in force and is not a modified endowment contract under IRC Section 7702A. If the policy is lapsed or surrendered prior to the death of the insured, the policy loans in excess of the cost basis will result in taxable income. ►A Self-Completing Pre-Retirement Death Benefit*** ●Requires optional waiver of monthly deductions at an additional charge. The waiver of monthly deduction agreement allows you to maintain your insurance protection during a period of disability by waiving all monthly expenses and cost of insurance charges. Please Note: Life insurance policies are subject to certain fees and expenses which are not normally associated with other investment vehicles.

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Sec 7702(A) Plan ►Income Tax-Free Death Benefits ►Proper Beneficiary Designations that Can Avoid Probate ►Possible Protection From Creditors ►Selectivity of Participants ►No Trust or Trustee Necessary ►No IRS Forms Required Please Note: Life insurance policies are subject to certain fees and expenses which are not normally associated with other investment vehicles.

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. ►Male Age 50 - $60,000 / YR, 10 Years, DB - $2,412,136 ►Target Premium - $41,009 Illustrated Interest Rate 7.0%7.5%8.0% Annual Income$65,590$84,108$104,310 Net age 95$1,367,710$1,923,240$2,529,289 age %6.73%7.86% Death age 95$363,264$524,850$820,773 Taxable Equivalent (Hypothetical Equity) 8.55%10.00%11.30% Sec 7702(A) Plan

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Web Story – Premium Choice

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Executive Bonus Plan (with Leverage) ►Business Owner, Male Age 50 ●$100,000 Tax Deductible Contribution yrs 1-10 ►Taxable to Business Owner ●Paid via Policy loans yrs 2-11 ►Net zero out of Pocket for Business Owner ►Tax Deferred Growth ►Income Tax Free Death Benefit ►Tax free Cash Flow - $140,000 Age ●Tax Equivalent 13.17%

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Exec Bonus Report

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Leveraged Life ►Male Age 50 – Sophisticated Investor ►Understands Margin Account ►Understands Put Option ►Pays Annual Premium, then borrows back to provide Leverage ►Maximizes use of funds!

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Leveraged Life

For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Leveraged Life

Accumulation Builder IUL Sales Ideas Dan Soderberg Regional Life Specialist All guarantees are based on the claims paying ability of the issuer. For Home Office and Producer Use Only. Not to be Used with Existing or Prospective Customers. Penn Mutual Life Insurance Company 600 Dresher Road, Horsham, PA 19044