Living Benefits Anico ABR presentation 080813a

1. Accelerated Benefit Riders Life When You Need It! One Moody Plaza Galveston, TX 77550 IMG8868 For Agent Use Only; Not for Use with the Public

2. TOPICS What are the ANICO Accelerated Benefit Riders? How Will These Living Benefits Work? Case Studies Benefits to Client Underwriting Express Conclusion IMG8868 For Agent Use Only; Not for Use with the Public

3. Accelerated Benefit Riders  Life, When You Need It!  LIVING BENEFITS – more options for your clients  A new product advantage to offer your clients  Another way along with Underwriting Express to differentiate our products in the field from the competition  Another reason to buy a permanent life insurance policy from ANICO  And best of all, NO ADDITIONAL PREMIUM for this rider to the customer IMG8868 For Agent Use Only; Not for Use with the Public

4. Accelerated Benefit Riders  Provides for the payment of an accelerated benefit!  Lump-Sum Payment / Not required to take in installments  Up to 16 qualifying Critical Illnesses* - More than the competition!  Requires inability to perform only two of six daily living activities to qualify for Chronic Illness  ANICO provides Living Benefits at NO additional Premium! *Critical Illness Rider not available in all states IMG8868 For Agent Use Only; Not for Use with the Public

5. Accelerated Benefit Riders  Accelerated Benefit Riders are not Long Term Care Insurance  Majority of Americans do not buy or cannot afford Long Term Care Insurance  Cost of Long Term Care Insurance is very expensive and may not be needed  Accelerated Benefit Riders may enable consumer with qualifying condition to receive a discounted accelerated benefit in lieu of the full death benefit for liquidity to cover expenses of Terminal, Chronic and Critical Illness  No Additional Premium: Benefits When You Need Them!! IMG8868 For Agent Use Only; Not for Use with the Public

6. Accelerated Benefit Riders  A study by Harvard conducted in 2007 and published in The American Journal of Medicine* in 2009 found in a survey of 2,314 Americans in Bankruptcy in 2007, that 62.1% were related to medical debts.  The ANICO Accelerated Benefit Riders provide a discounted accelerated death benefit in the event of a Qualified Terminal, Chronic or Critical Illness when it is needed most. *Volume 122, Issue 8, Pages 741-746, August 2009; Austin David Himmelstein and Deborah Thorne, Elizabeth Warren and Stephie Woodhandler IMG8868 For Agent Use Only; Not for Use with the Public

7. Accelerated Benefit Riders ANICO Indexed Universal Life* Affinity 7 Whole Life Insurance ANICO Executive Universal Life *The ANICO Indexed Universal Life Insurance policy is not a registered security or stock market investment and does not directly participate in any stock or equity investment or index. When an individual purchases the policy, the individual is not buying an ownership interest in any stock or index Form IUL08, Form IULU08, Form PWL-CSO, Form PWLU-CSO, Form EXEC-UL, Form EXEC-ULU IMG8868 For Agent Use Only; Not for Use with the Public

8. Accelerated Benefit Riders (Form ABR11-CH)  Insured is unable to perform 2 of 6 activities of daily living (ADLs) or requires supervision due to severe cognitive impairment  The Activities of Daily Living are:  Bathing, continence, dressing, eating, toileting and transferring IMG8868 For Agent Use Only; Not for Use with the Public

9. Accelerated Benefit Riders (Form ABR11-CT) Covered critical illnesses continued:   Triggered by a specific qualifying health event where critical illness transpires  Paralysis  Arterial aneurysms  Central nervous system disease  Central nervous system tumors  AIDS  Major burns  Major Multi-system trauma  Severe disease of any organ  Loss of limbs  Most of the competition only covers 6 triggers  Covered Critical Illnesses may include:  Heart Attack  Stroke  Invasive Cancer  End stage renal failure  Major organ transplant  ALS  Blindness IMG8868 For Agent Use Only; Not for Use with the Public

10. Accelerated Benefit Rider (Form ABR11-TM)  Life expectancy of less than 24* months  Some states may limit the definition of terminal illness to conditions that are expected to result in death within 12 months  Available on all classes  Terminal Illnesses can cost an incredible amount of money and cause stress and worry for those involved  Sometimes having money during life to meet health care costs to make loved ones more comfortable or give them hope is more important than having a death benefit later IMG8868 For Agent Use Only; Not for Use with the Public

11. Accelerated Benefit Riders  Use of any Accelerated Benefit Rider will terminate the life insurance policy unless the benefit accelerated is under a spousal term or other insured rider, in which case the rider will terminate – Partial Settlements Coming the first quarter of 2014.  For Chronic and Critical Illnesses, Accelerated Benefit Rider is not allowed on policies rated higher than table 4 or if there is a flat extra of more than $5.00 per thousand. IMG8868 For Agent Use Only; Not for Use with the Public

12. Accelerated Benefit Riders  Minimum  $25,000 for Terminal Illness version  $50,000 for Chronic and Critical Illness version  Maximum  $2,000,000 for ages 0-65  $1,000,000 for over age 65 IMG8868 For Agent Use Only; Not for Use with the Public

13. Accelerated Benefit Riders  Added automatically to newly issued policies  Some states may approve all riders; some states such as New York may approve only Terminal Illness Rider  check individual states for approval IMG8868 For Agent Use Only; Not for Use with the Public

14. Accelerated Benefit Riders  Enhance attractiveness of our product in the Buy/Sell Market  Using full funding, the base policy cash value builds to assist Buyout at retirement  Accelerated Benefit Riders can be used as a buy-out down payment in the event of a qualifying Critical, Chronic or Terminal illness IMG8868 For Agent Use Only; Not for Use with the Public

15. Accelerated Benefit Riders  Additional Qualifying Riders  Primary Insured – Added to base policy death benefit when electing accelerated benefit amount for primary insured  Level Term Rider (Form ULLTR)  Additional Protection Benefit Rider (Form ULAPBR08)  Paid Up Additions Rider (Form MLPUA)  ANICO Select Term Rider (Form ART07 –TERM)  Other Insured Parties – eligible for accelerated benefits if the other Insured has qualifying condition  Other Insured Rider (Form ULOIR)  Spouse Term Rider (Form ULSTR93, Form SARTR94, Form STR88) IMG8868 For Agent Use Only; Not for Use with the Public

16. Accelerated Benefit Riders Eligible Death Benefit reduced by -Actuarial Discount -Administrative Fee ( ) -Less Outstanding Policy Debt Loans reduce BUT DO NOT Eliminate Benefits; = Accelerated Benefit Amount IMG8868 For Agent Use Only; Not for Use with the Public

17. Accelerated Benefit Riders  Actuarial discount computed to make accelerated benefit amount equivalent to present value of eligible death benefit less the present value of future premiums required to keep the policy in force  Factors Impacting Benefit Amount:  Accelerated Benefit Interest Rate  Severity of Qualifying Medical Condition  Future Premiums  Future Anticipated Dividends  Cash Value Associated with Eligible Death Benefit IMG8868 For Agent Use Only; Not for Use with the Public

18. Accelerated Benefit Rider Payment Options  Accelerated Benefit paid in a lump sum may be applied to any non-life contingent settlement option available in the contract  If insured for whom accelerated benefits are paid is insured under policy, policy will terminate  If insured for whom accelerated benefits are paid is not insured under base policy, then policy remains in effect with rider terminated IMG8868 For Agent Use Only; Not for Use with the Public

19. Accelerated Benefit Rider  Waiting Period - None –  Condition must exist for 90 days prior to a claim (does not apply to cognitive impairment)  No accelerated benefit will be paid within the first two policy years of the issue date of the base policy –  Claims will not be processed until at least 30 days after the qualifying event  No accelerated benefit will be paid for any qualifying event that occurs on or before the issue date of the base policy IMG8868 For Agent Use Only; Not for Use with the Public

20. Tax Consequences should be Non Taxable distribution may receive favorable tax treatment as it is subject to daily limit of $320 or $116,800 annually for 2013 or amount of qualified long- term care expenses. All insurance benefits are considered in evaluating these limits.  Payments received under excluded under accidental health policy and IRC Section 105(b) and 105(c) (check with advisors) may be  Clients should consult their tax and legal advisors to determine applicability to their individual situation IMG8868 For Agent Use Only; Not for Use with the Public

21. Accelerated Benefit Riders Effect on Eligibility for Government Benefits  Qualification for Government programs such as Medicaid are quite stringent and often allow for only limited income and assets in order to receive benefits  Client should consult their legal and tax advisors to determine the impact of receipt of benefits on their individual situation before deciding to accept such benefits IMG8868 For Agent Use Only; Not for Use with the Public

22. Accelerated Benefit Rider Illustration Support  Accelerated Benefit Rider Illustrations will follow the policy under Riders  Report will provide an illustration for Terminal, Chronic and Critical Illness at various attained ages  Report will reflect hypothetical amount available based upon slight impairment, moderate impairment and severe impairment for Chronic and Critical and amount for terminal illness IMG8868 For Agent Use Only; Not for Use with the Public

23. Hypothetical Accelerated Benefits ANICO Indexed Universal Life, Face Amount: $100,000, 45 Year old Female Standard non-user, Annual Premium $3,347.00 Chronic and Critical Illness Terminal Illness Attained Age Slight Impairment Moderate Impairment Severe Impairment 47 $0 $38,222 $76,444 $88,186 65 $20,238 $48,341 $76,444 $88,186 75 $39,216 $57,830 $76,445 $88,186 85 $59,272 $67,867 $76,461 $88,186 IMG8868 For Agent Use Only; Not for Use with the Public

24. ABRs for Signature Term Insurance  ANICO’s Signature Term Insurance Policy also contains the three Accelerated Benefit Riders  Benefits may not be as large as IUL Benefit unless Illness is severe  Slight and moderate benefits will be reduced by lack of cash value and reduction in benefit due to ART premiums at higher ages being a part of discounting calculation IMG8868 For Agent Use Only; Not for Use with the Public

25. Terminal Illness – Hypothetical Case Study  After visiting her Doctor, Joan found out she had pancreatic cancer. She went to a leading Cancer Center and had her diagnosis confirmed  Joan could not work once treatment started and began going through her savings very rapidly.  Joan visited with her financial advisor to see what she could get if she surrendered the policy and found she could access a larger amount through the Accelerated Benefit Terminal Illness Rider  Joan exercised the rider in settlement of her policy IMG8868 For Agent Use Only; Not for Use with the Public

26. Terminal Illness – Hypothetical Case Study  With this money, Joan was able to afford to continue her treatment and lived longer than expected  The money brought Joan hope that she could beat this devastating disease and become one of the few survivors  Although she did not survive the disease, she lived a longer and better life due to the assistance this living benefit provided her IMG8868 For Agent Use Only; Not for Use with the Public

27. Chronic Illness – Hypothetical Case Study  Karen became concerned as her husband Bill began experiencing forgetfulness and occasionally became confused. This condition worsened over time  They visited a doctor and learned that Bill had early-onset Alzheimer’s disease. As time passed, the disease became worse and Bill needed to stop working. Karen missed work taking care of Bill  This resulted in a loss of income and higher medical bills as Bill was being treated IMG8868 For Agent Use Only; Not for Use with the Public

28. Chronic Illness – Hypothetical Case Study  Bill and Karen quickly went through all of their savings and much of their retirement savings to pay for treatment  They met with their financial advisor to see what they had left  Bill had an ANICO life insurance policy with a face of $500,000 on his life  They talked to their advisor about surrendering the policy and were informed the policy had a living benefit that included Chronic Illness  They qualified and received a reduced lump sum acceleration benefit in settlement of the policy which helped pay for Bill’s treatment & caregivers which allowed Karen to return to work IMG8868 For Agent Use Only; Not for Use with the Public

29. Critical Illness – Hypothetical Case Study  Jim and Mary were asleep one night when Jim woke up experiencing a massive heart attack  Jim was in ICU several days before eventually being sent home to recover  Jim would be unable to return to work for two months and Mary took a temporary leave of absence to care for Jim and help him get healthy and lose weight IMG8868 For Agent Use Only; Not for Use with the Public

30. Critical Illness – Hypothetical Case Study  Jim and Mary were concerned that with Jim’s illness and recovery, they would go through their regular savings and much of their retirement savings  Their financial advisor pointed out that Jim’s ANICO Life Policy had a Critical Illness Rider and they could receive a discounted lump sum in settlement for their policy  At a time when their future retirement seemed to be falling apart, Jim and Mary found the financial comfort they needed from ANICO’s living benefits IMG8868 For Agent Use Only; Not for Use with the Public

31. Accelerated Benefit Riders  The check is not a reimbursement for approved expenses already incurred  Lump Sum discounted accelerated benefit can be used without restrictions  Pay a family member to take care of you  Have the lawn mowed or the house cleaned  Funds to get you through the tough times IMG8868 For Agent Use Only; Not for Use with the Public

32. Accelerated Benefit Riders  ANICO’s Accelerated Benefit Riders can provide a client living benefits that they can use when they need them  Selling life insurance for more than protecting against premature death is critical to making the sale  Our living benefits rider joins other features such as (1) supplemental retirement income, (2) paying off a home prior to retirement, (3) educating grandchildren, etc. to provide our clients a number of benefits they may enjoy while they are alive  ANICO has multiple Life Insurance product attributes that differentiate us from the competition IMG8868 For Agent Use Only; Not for Use with the Public

33. The ANICO Underwriting Express  Another product attribute that ANICO provides is The ANICO Underwriting Express  Underwriting Express allows for fast easy underwriting along with the Living Benefit Riders  With the ANICO Underwriting Express, Most Cases Allow for:  No Labs  No Parameds  No Blood work IMG8868 For Agent Use Only; Not for Use with the Public

34. The ANICO Underwriting Express  Underwriting Express applies to ages 0-65 with amounts up to $250,000  Standard and Substandard rate classes only.  Preferred rates and full underwriting available with other ANICO products or on amounts over $250,000  No Reduction in Commissions  Underwriting becomes faster and less invasive for most individuals  Applications that meet our guidelines usually approved within 72 hours IMG8868 For Agent Use Only; Not for Use with the Public

35. Conclusion  ANICO’s Living Benefits Riders help protect against life’s risks  No one expects life threatening events but we can plan for them  One way to protect from catastrophic health events is the ANICO Accelerated Benefit Riders  Some other companies may charge a premium for a Living Benefit that may never be utilized  ANICO offers Protection for NO ADDITIONAL PREMIUM  If an insured qualifies, they can receive a discounted lump sum death benefit when they need it to get through their illness If the DB grows after issue, then the ABR Benefit will be calculated on the DB at time of claim ( .) IMG8868 For Agent Use Only; Not for Use with the Public

36. Conclusion Give your clients more reasons to buy life insurance that can benefit them Then provide your clients an improved, less invasive underwriting experience with The ANICO Underwriting Express American National Insurance Company:  More client living benefits  Easier, faster and painless underwriting  Less of your time required to finalize the sale IMG8868 For Agent Use Only; Not for Use with the Public

37. Any Questions? IMG8868 For Agent Use Only; Not for Use with the Public