1. Broker Use Only LTCI 2003 The Perfect Storm Carol Gardner President LifeStyle Insurance Services, Inc.

2. Broker Use Only SOURCE: LIMRA International 2002 Report *Includes Bankers Life & Casualty, Conseco Health Insurance Co., Conseco Senior Health Insurance Co., and Pioneer Life Insurance Co. **Includes Fortis *** Includes Life Investors Insurance. Co. of America, Monumental Life Insurance Co., AUSA Life Insurance. Co., Inc., Peoples Benefit Life Insurance Co. Transamerica Life Insurance Co., Transamerica Occidental Life Insurance Co and Transamerica Occidental of New York. **** Formerly Aid Association for Lutherans & Lutheran Brotherhood Company 2002 Annualized Premium In-Force (MM) 1) GE 2) CONSECO* 3) Hancock** 4) C N A 5) Aegon*** 6) Penn Treaty 7) UNUM 8) IDS 9) Thrivent**** 10) Allianz TOTAL $ 1,466.0 874.1 711.5 487.2 430.7 345.2 263.2 249.1 205.3 155.9 $6 Billion 2002 New Premium Sales (MM) $ 248.4 89.3 131.1 75.9 63.2 4.4 64.4 25.4 28.1 41.4 $1 Billion 02/01 Growth 1% (9)% 31% 21% 1% (91)% (18)% (11)% (7)% (1)% 5% Top Individual LTC Carriers

3. Broker Use Only *Includes Fortis LTCI Sales: 1Q-2003 SOURCE: LIMRA International 2002 Report

4. Broker Use Only 2002 Industry Sales Results 2002 new sales of 1.2 billion, up 18% over 2001 sales Excluding Federal program, sales up 7% 2003 sales likely to increase by 25% 60% of 2002 sales produced by top six companies 2003 sales becoming more concentrated among fewer carriers

5. Broker Use Only Product is Target of Consumer Advocates Privacy Legislation Suitability Standards Agent Education Requirements Required Provisions Rate Stabilization

6. Broker Use Only Carriers are Struggling Limited experience Historical aggressive pricing & benefits High claims Low lapse rates Poor investment results-low interest rate environment

7. Broker Use Only Carrier Activity Record number of companies exit market Large multi-line companies increasing fastest Prices increasing Tougher underwriting standards

8. Broker Use Only Companies Exiting… IDS Life (10 th largest in 2002) Thrivent Financial for Lutherans (11 th largest in 2002) American Fidelity Assurance CNA (Valley Forge still available) Fortis-merged into John Hancock Two Aegon Subsidiaries Central States Health & Life of Omaha West Coast Life Life and Health of America

9. Broker Use Only News of Industry Leaders- John Hancock June, filed new products in 50 states, rates higher by 20%-30% June, UW guideline changes-will no longer insure insulin-dependent diabetics or applicant with history of stroke June, reduced discounts & commissions on Sponsored Group programs May, Preferred not available with lifetime benefits, except in CA

10. Broker Use Only News of Industry Leaders-CNA June, no longer offer Affinity and Preferred Employer Group programs May, limited presence in LTC market. New plan approved in only 23 states—no plan to release in more states May, new rate increases up to 50%, rate increase on 1997 business April, largest distributor, LTCP Inc., exits LTC business

11. Broker Use Only News of Industry Leaders- UnumProvident June, announced the move away from brokerage and field office support for individual sales June, announced that brokers will have contracts canceled Dec.1 st, 2003—everyone will be on ‘rewards’ program, low commissions Feb., pulled Advantage One product from market

12. Broker Use Only News of Industry Leaders- Conseco On-going financial problems-Chapter 11 Raised rates across country Class action suit by policyholders April, announces that will no longer sell LTCI through independent producers but will continue to sell through its Banker’s Life & Casualty unit

13. Broker Use Only Acute Need for LTCI Baby boomers are aging Baby boomers haven’t been good ‘savers’ Baby boomers will demand certain lifestyle in retired years People are living longer Government struggling with Medicare & Medicaid

14. Broker Use Only People Need a Trusted Advisor to Help Them Navigate the Rough Sea Agent Financial Advisor Friend Group Endorsement Employer

15. Broker Use Only Deliver the Good News…. Even with higher premiums, the cost of a lifetime of premiums usually equals a few months of care A low interest rate environment decreases the cost for housing and credit financing—this offsets the higher cost of insurance The younger you are when you buy, the lower the premium New products have great benefits

16. Broker Use Only LifeStyle’s LTCI Choices for Individuals MetLife John Hancock GE Capital Transamerica Prudential

17. Broker Use Only LifeStyle’s LTCI Choices for Multi-Life MetLife Transamerica UnumProvident