1. TMK1638 0610 Med Supp Compensation for Independent Contractor Agents and Unit Managers TMK1638 0610 Agent Training Only

2. TMK1638 0610 Liberty National markets Medicare Supplements A, B, F, HDF, and N. This presentation details one of many compensation opportunities. TMK1638 0610

3. Any policy sold should be suitable to the needs of the applicant based on their health status and financial situation. TMK1638 0610

4. Our expectation is that new Agents will be able to sell 5 HDF policies each week – when appropriate for the customer – and, additionally, sell Liberty Whole Life products on 3 of those sales, when appropriate. TMK1638 0610

5. I.Agent HDF Commission II.Agent Life Commissions III.Agent Life Advances IV.Agent Production Bonus V.Agent Renewals VI.Unit Manager HDF Commission VII.Unit Manager Life Commissions VIII.Unit Manager Life Advances IX.Unit Manager Bonus X.Unit Manager Renewals TMK1638 0610

6. I. Agent HDF Advanced Commission Loans TMK1638 0610

7. Agent Advanced Commission Loans HDF Sales $54 monthly premium per HDF sale 300% 1 st month’s premium= $162 120% months 2-12+ $65 420% Total first-year commission from one HDF sale $227 Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

8. TMK1638 0610 Agent Advance Commissions Loans HDF Sales 420%Total first-year commission from one HDF sale = $227 Sales per weekx 5 Total first-year commission per week$1,134 Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

9. TMK1638 0610 Agent Advance Commissions Loans HDF Sales Total first-year commission per week = $1,134 Weeks per yearx 52 Total first-year commissions$58,968 Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

10. TMK1638 0610 II. Agent Life Commissions TMK1638 0610

11. Even after the HDF premium is paid and the minimum deposit of $50 made to the Reserve Fund Annuity, money remains. Agent Commission: 3 LNL Life Sales per Week

12. TMK1638 0610 $38monthly premiums $5k WLN policy ÷.09 modal factor $422annual premium at 65% commission = $274 Agent Commission: 3 Life Sales per Week What can they do with it? Buy additional coverage!

13. TMK1638 0610 $274Life commission per sale x 3Sales per week $822Life commission per week Agent Commission: 3 Life Sales per Week

14. TMK1638 0610 III. Agent Life Advances TMK1638 0610

15. 70% of commission is Direct Pay on submission 30% deposited into commission account TMK1638 0610 Agent LNL Life Advance Commissions

16. TMK1638 0610 $274Life commission per sale x 70%Advance following week $191Advance commission per sale Agent Commission: 3 LNL Life Sales per Week

17. TMK1638 0610 $191Advance commission per sale x 3Sales per week $573Advance commission per week Agent Commission: 3 LNL Life Sales per Week

18. TMK1638 0610 $573Advance commission per week x 52Weeks per year $29,796Advance commission per year Agent Commission: 3 Life Sales per Week

19. TMK1638 0610 IV. Agent Production Bonus TMK1638 0610

20. But don’t forget about the bonus… $422 AP per Life Sale x 3Policies per week x 40% Bonus level * $506Bonus per week Agent Bonus: 3 Life Sales per Week* *Assumes Agent reaches 40% bonus level on 4 th consecutive week of $1,000 or more: 1 st wk = 10%, 2 nd wk = 20%, 3 rd wk = 30%, 4 th wk = 40%

21. TMK1638 0610 So let’s add it all up TMK1638 0610

22. $58,760 HDF commission + $29,796Life advance commission + $26,312Bonus $114,868Total commission & bonus Agent Annual Commissions HDF + Life + Bonus

23. TMK1638 0610 $115,076 Total commission & bonus + $12,948From Commission Account $128,024Total commission & bonus* Agent Total Commissions HDF + Life + Bonus *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

24. TMK1638 0610 Total Agent Compensation* $127,816 TMK1638 0610 *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

25. TMK1638 0610 V. Agent Renewals TMK1638 0610

26. HDF: Renewals* TMK1638 0610 *According to contract provisions MonthsPercentage 13-185% 19-365% 37-6015% 60-12015% 120+15%

27. TMK1638 0610 Whole Life $50,000 or Less: Renewals* TMK1638 0610 * According to contract provisions MonthsPercentage 13-189% 19-369% 37-609% 60-1209% 120+9%

28. TMK1638 0610 VI. Unit Manager HDF Commission Advance Loans TMK1638 0610

29. UM Advance Commission Loans HDF Sales $56 first-year premium per HDF sale 70% 1 st month’s premium= $39 50% months 2-12+ $28 120% Total first-year commission from one HDF sale by one Agent $67 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

30. TMK1638 0610 UM Advance Commission Loans HDF Sales Total first-year commission from one HDF sale by one Agent = $67 Sales per Agent per weekx 5 Commission per Agent per week$335 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

31. TMK1638 0610 UM Advance Commission Loans HDF Sales $56 first-year premium per HDF sale Commission per Agent per week= $335 Weeks per year x 52 HDF commission per Agent per year*$17,420 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode. *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

32. TMK1638 0610 UM Advance Commission Loans HDF Sales on 3 Agents Commission per Agent per year=$17,420 Agents in Unitx 3 Commission per year with 3 Agents in Unit* $52,260 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode. *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

33. TMK1638 0610 UM Advance Commission Loans HDF Sales on 5 Agents Commission per Agent per year=$17,420 Agents in Unitx 5 Commission per year with 5 Agents in Unit* $87,100 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode. *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

34. TMK1638 0610 UM Advance Commission Loans HDF Sales on 7 Agents Commission per Agent per year=$17,420 Agents in Unitx 7 Commission per year with 7 Agents in Unit* $121,940 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode. *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

35. TMK1638 0610 UM Advance Commission Loans HDF Sales on 10 Agents Commission per Agent per year$17,420 Agents in Unitx 10 Commission per year with 10 Agents in Unit* $174,200 Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode. *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

36. TMK1638 0610 XII. Unit Manager Life Commissions TMK1638 0610

37. $38monthly premiums $5k WLN policy ÷.09 modal factor $422annual premium at 40% commission = $168 UM Commission: 3 Life Sales per Week

38. TMK1638 0610 $168Life commission per sale x 3Sales per week $504Life commission per week* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

39. TMK1638 0610 XIII. Unit Manager Life Advances TMK1638 0610

40. 70% of commission is Direct Pay 30% deposited into commission account TMK1638 0610

41. $168Life commission per sale x 70%Advance following week $117Advance commission per sale UM Commission: 3 Life Sales per Week

42. TMK1638 0610 $117Advance commission per sale x 3Sales per week $351 Advance commission per week* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

43. TMK1638 0610 $351Advance commission per week x 52Weeks per year $18,252Advance commission per year* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

44. TMK1638 0610 $18,252Advance commission per year x 3Agents in Unit $54,756Advance commission per year* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

45. TMK1638 0610 $18,252Advance commission per year x 5Agents in Unit $91,260Advance commission per year* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

46. TMK1638 0610 $18,252Advance commission per year x 7Agents in Unit $127,764 Advance commission per year* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

47. TMK1638 0610 $18,252Advance commission per year x 10Agents in Unit $182,520 Advance commission per year* UM Commission: 3 Life Sales per Week *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

48. TMK1638 0610 IV. Unit Manager Production Bonus TMK1638 0610

49. UM: Bonus The Unit Manager is eligible for a weekly production bonus that is a percentage of any weekly production bonus received by an Agent on the Unit Manager’s group. The percentage will depend on the number of 1st time 40% bonus earners during the previous 8 weeks and the Agent’s length of service

50. TMK1638 0610 UM: Bonus Bonus Override % of Agent’s Bonus # NEW* 1st Time 40%Agent’s Weeks of Service Bonus earners:1-39 40-78 79+ 0 40% 15% 10% 1 60% 15% 10% 2+ 80% 15% 10% *occurring in the previous 8 week period, adjusted monthly

51. TMK1638 0610 UM: Bonus In the Agent example, the Agent’s bonus was $506. Assuming the Unit Manager is at the 80% level, the Unit Manager would receive $404 in bonus. Assuming DCN multiplier of 1.

52. TMK1638 0610 Commission per week$320 Bonus per week$404 Compensation per week from 1 Agent* $724 UM: Weekly Compensation from 1 Agent *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

53. TMK1638 0610 UM Income per week per Agent$724 Agents on Unitx 3 Total Weekly Compensation*$2,172 UM: Weekly Compensation from 3 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

54. TMK1638 0610 Income per week$2,172 Weeks per yearx 52 Total Annual Compensation*$112,944 UM: Annual Compensation from 3 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

55. TMK1638 0610 UM Income per week per Agent$724 Agents on Unitx 5 Total Weekly Compensation*$3,620 UM: Weekly Compensation from 5 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

56. TMK1638 0610 Income per week$3,620 Weeks per yearx 52 Total Annual Income*$188,240 UM: Annual Income from 5 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

57. TMK1638 0610 UM Income per week per Agent$724 Agents on Unitx 7 Total Weekly Compensation*$5,068 UM: Weekly Compensation from 7 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

58. TMK1638 0610 Income per week$5,068 Weeks per yearx 52 Total Annual Compensation*$263,536 UM: Annual Compensation from 7 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

59. TMK1638 0610 UM Income per week per Agent$724 Agents on Unitx 10 Total Weekly Compensation*$7,240 UM: Weekly Compensation from 10 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

60. TMK1638 0610 Income per week$7,240 Weeks per yearx 52 Total Annual Compensation*$376,480 UM: Annual Compensation from 10 Agents *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

61. TMK1638 0610 So let’s add it all up TMK1638 0610

62. Unit Manager Compensation Potential Comm AgentsHDFLifeProduction+ Bonus Per UnitComm AdvancesBonusTotal* 3$52,260 +$54,756 +$112,944 = $219,960 5$87,100 +$91,260 +$188,240 = $366,600 7$121,940 +$127,764 +$263,536 = $513,240 10$174,200 +$182,520 +$376,480 = $733,200 TMK1638 0610 *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

63. TMK1638 0610 Unit Manager Compensation Potential Agents AnnualCommissionTotal Annual Per UnitTotalAccountEarnings* 3$219,960 +$23,400=$243,360 5$366,600 +$39,000=$405,600 7$513,240 +$54,600=$567,840 10$733,200 +$78,000=$811,200 TMK1638 0610 *Less any shrinkage from Cancellations, Not-Takens and/or Lapses

64. TMK1638 0610 X. Unit Manager Renewals TMK1638 0610

65. Whole Life $50,000 or Less Renewals* TMK1638 0610 *According to contract provisions MonthsPercentage 13-184% 19-364% 37-604% 60-1204% 120+4%

66. TMK1638 0610 The End TMK1638 0610