Ten Pay Whole Life

1. Ten Pay Whole Life With brief introduction of Single Pay Whole Life Carol Conger Miller, CLU Manager, Life Product Development and Support October 2009 For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

2. Disclosure • The information in this presentation is designed to be general in nature and for educational purposes only. The complete text, with nothing taken out of the context, is the only manner in which it should be used. . It should never be used as an argument for the replacement of any life insurance product. The Guardian Life Insurance Company of America, its subsidiaries, agents and employees do not give tax or legal advice. • Riders may incur an additional cost For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

4. Ten Pay Whole Life • Driving force for introducing product: • Compete with New York Life’s Custom Whole Life • Compete with MassMutual’s 10 Pay Whole Life • Meet demand for guaranteed paid-up policy • Further diversify and deepen our WL product portfolio. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

5. Marketing Applications • Primary markets • Supplemental retirement • Gifts to juveniles • Accelerated funding for executive benefits plans • Ideal clients • Risk-averse individuals who want to guarantee 10 payments • Clients looking for cash to supplement retirement. • Clients interested in gifting life insurance • Athletes, performers or investment bankers who expect to have high income for a limited number of years. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

6. Marketing Applications • Selling points • Guaranteed paid-up (no riders needed) • Guaranteed cash value begins in year 1 • High cash value IRR* • Substantial cash value build up without MEC or material change (without EPUA) • Compensation – similar to blend of L99 and EPUA *Dividends are not guaranteed. They are declared annually by Guardian's Board of Directors. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

7. Competitiveness Guardian’s 10 Pay Whole Life outperforms New York Life and MassMutual – cash value and death benefit. Based on 2009 Dividend Scale, not guaranteed. Cash Value & Death Benefit are End-of-Year. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

8. Competitiveness – Cash Value Accumulation Male age 45, Second Best Class. Spend $40,870 all base premium. (Guardian’s initial DB, $1,000,000) End-of Year Cash Value Comparison Based on 2009 Dividend Scale, not guaranteed. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

9. Competitiveness – Death Benefit Male age 45, Second Best Class. Spend $40,870 all base premium. (Guardian’s initial DB, $1,000,000) End-of Year Death Benefit Comparison Based on 2009 Dividend Scale, not guaranteed. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

10. Paid-Up Addition Rider considerations • New feature with this product – PUA Rider is called Lifetime Paid-Up Additions (LPUA). Allows PUA payments to continue after 10th year. • Base Premiums set close to the 10-year non-MEC premium • LPUA may be added without creating a MEC • With Dividend Option Q large EPUA premiums can be paid. (Option Q term rates are guaranteed for only 2 years.) • Small LPUA premiums can be paid to support a premium offset. (However $100/year for 10 years may create a MEC) • 1035 Exchanges in many situations For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

11. Paid-Up Addition Rider considerations (continued) • Without Option Q, LPUA payments beyond year 10 will always create a MEC. May be OK to have a MEC if: • No loans or distributions are anticipated • Policy owned by a not-for-profit organization. • Note that other taxpayers in zero percent tax bracket are still subject to 10% penalty on distributions prior to the owner’s age 59 ½. • Client understands that cash value accumulation is tax-deferred, but distributions may be taxable. • Policy gains are minimal due to client’s age. • Waiver of premium • PUA Waiver (Waiver of Specified Amount) waives premiums only through year 10. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

12. Other New Features • GIO Rider 10 – Can be exercised one time at the end of year ten. • Premium for GIO-10 is less than half the cost of EGIO for L99. • Male age 35, $100,000 -- $29 vs. $108. • Not practical to have premium paying rider after the base policy is paid-up. (Except LPUA) • Note: this may be an important consideration for juvenile policies. About half of policies at issue age 1 have a GIO rider. Some agencies almost always include it; other agencies almost never do. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

13. GIO Example • Male Age 35, Second Best Class • $250,000 -- Premium with GIO 7,370 • Options at age 45 • New Ten Pay Whole Life: • Premium of $7,370 purchases face amount of $178,317 • Face amount of $250,000 costs $10,293 • New L99: $250,000 costs $4,775 For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

14. GIO Example – Continue L10 premium In year 11 Purchase new L10 policy – same premium. Face Amount - $178,317 Based on 2009 Dividend Scale, not guaranteed. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

15. Juvenile Policies – Waiver of Premium Waiver of premium options • Regular Waiver of premium – available for juveniles age 5+. Definition of disability for a juvenile is inability to attend school full time outside the home. Will be added to rest of portfolio at a later date. • Applicant’s Waiver of Premium – on policies with insureds age 14 or younger. Covers death or disability of applicant. • Same features as “Combined Waiver” except does not automatically convert to regular waiver. • Option to convert to regular waiver. • A policy cannot have both riders. • PUA Waiver (Waiver of Specified Amount) is available only if regular waiver of premium is selected. (Does not waive premiums beyond year 10) For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

16. Other riders available • Enhanced Accelerated Benefit Rider (EABR) • ABR (no chronic illness benefit) available in states where EABR is not available. • RTR-10 • SIO Rider • Select Security Rider • Exchange of Insureds • Accidental Death Benefit For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

17. Enhanced Dividends for Paid-Up policies • Applies to 2001 CSO policies when they are fully paid-up (not reduced paid-up). • Can be illustrated now for new business and inforce cases. • Greatly improves illustrated values on Limited Pay Whole Life – and is key to 10 Pay Whole Life’s long-term performance • Approximately $3 per thousand plus 20 bp for most policies. (Varies by situation; less on rated cases) • Limited Pay -- male age 35, Preferred NT, after age 65 base policy dividend is 18%-25% higher with new methodology. • Slightly improves maximum distribution solves for L99. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

18. How it fits in our portfolio Premium relative to Ten Pay Whole Life depends on issue age. Male age 40, second best class. $1,000,000 For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

19. How our portfolio meets objectives Answering field’s questions – Do we have L65? L20? Depending on the issue age, we have one or more ways to meet clients’ objectives. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

20. Cash Value Accumulation Break-Even Points – “Money Stages” concept Even in the early years, the cash value increase exceeds the premium, both on a guaranteed and current basis. Male age 45, second best class, $1,000,000. Base premium $40,870. Does not take into account time value of money. Premium is beginning of year; CV is end-of-year Based on 2009 Dividend Scale, not guaranteed. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

21. Cash Value Accumulation Break-Even Points Does not take into account time value of money. Premium is beginning of year; CV is end-of-year Based on 2009 Dividend Scale, not guaranteed. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

22. Comparing products • Comparisons show a combination of base premium and EPUA for 10 years to match 10 Pay WL premium. • No dividend banding on 10 Pay WL. Other products (L95, L99 and L121) have higher dividends at $1 million +. • 10 Pay WL compares more favorably to Guardian’s other products at $500,000 than at $1,000,000. • NY Life’s Custom Whole Life’s highest band is $100,000 • MassMutual’s highest band is $1 million For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

23. Cash Value Accumulation looks great compared to other products plus EPUA Male age 40, second best class, $1,000,000 base face amount. Spend $34,400 for 10 years Based on 2009 Dividend Scale, not guaranteed.

24. Death Benefit – Compare 10 Pay WL to other products with EPUA – DB rises more slowly Male age 40, second best class, $1,000,000 base face amount. Spend $34,400 for 10 years. Based on 2009 Dividend Scale, not guaranteed.

25. Great vehicle to supplement retirement benefits Male age 35, second best class, $1,000,000 – Higher distributions when matching outlay for 10 years. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004 Based on 2009 Dividend Scale, not guaranteed.

26. Total Guaranteed Cash Value Male age 35, $1,000,000 second best class – Higher total guaranteed cash value when matching outlay for 10 years. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

27. What does $10,000 purchase? Male non-smoker class– Base face amount on 10 Pay WL purchased by $10,000 per year annual premium. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

28. What does $10,000 purchase? Base face amount on 10 Pay WL purchased by $10,000 per year annual premium. Premiums for Preferred NT and Preferred Plus NT are the same. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

29. Juveniles – Cash Value Accumulation Comparison Lock in guaranteed 10-pay without sacrificing cash value performance. Male age 5, match premium of $5,500 -- $500,000 base face amount For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004 Based on 2009 Dividend Scale, not guaranteed.

30. Juveniles – Death Benefit Comparison Death Benefit Male age 5, match premium of $5,500 -- $500,000 base face amount For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004 Based on 2009 Dividend Scale, not guaranteed.

31. How does it compare with alternatives? • We have marketed “Life Paid-Up at Any Age” using a combination of L99 and EPUA Rider sufficient to pay up policy on a guaranteed basis. • 10 Pay Whole Life is a less expensive way to guarantee a 10 pay. ($28,890 vs. $30,100 for male age 35, $1,000,000) • Much simpler for client to understand. • Trade-off is less flexibility. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

32. Guarantee a One-Pay Using Prepaid Premiums • Lock in the interest rate and avoid a Modified Endowment Contract. • Guaranteed interest rate of 4.75% for 10 years • Example: • Annual premium: $10,000.00 • Total amount due: $81,876.24 • Discount: $18,123.76 • Favorable taxation. Discount is taxable at the time the premium is actually applied. • Cost basis is greater than the after-tax outlay: $100,000. (10 x annual premium = Outlay plus discount.) • Since money cannot be withdrawn unless policy is surrendered, agent locks in renewal compensation. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

33. Guarantee a One-Pay Using Prepaid Premiums • What if you’re starting with a lump sum amount rather than the premium? • How do you arrive at the annual premium? • Divide the lump sum by the factor: • Total deposit: $100,000 • 10 year factor: 8.187624 • Annual Premium: $12,213.56 For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

34. Total Cash Value – Policy Values Plus Prepayment Balance A single deposit of $100,000 has a short break-even point. Male age 35, second best class. Base premium $12,213. Regular Policy Values Prepayment Value Prepayment value is not available for loans or withdrawals; if the policy is surrendered, the balance is subject to a penalty which is reflected above. Based on 2009 Dividend Scale, not guaranteed.

35. 10 Pay WL vs. L99 with EPUA • 10 Pay WL has the following advantages • Guaranteed paid-up in 10 years • Higher Net Cash Value • Higher Total Guaranteed Cash Value • L99 with EPUA has the following advantages • Flexibility to pay premiums beyond year 10. • More cash available for withdrawals if premiums continue withdrawals benefit increases faster • If waiver of premium is added: potential for premiums to be waived for longer time. • If GIO is added: more option dates For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

36. Product Basics • Issue ages • 0-75 • Minimum face amount • $25,000 • Underwriting classes – same as other whole life • Dividend Options – same as other whole life • Regular series only. Pension Trust not available at this time. • Term conversions – allowed but no conversion credits are applied. • Does not replace any existing product – no formal transition rules For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

37. State Approvals • Approved in all jurisdictions except for Maryland For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

38. Compensation • Comparable to a blend of L99 and EPUA • FRs • Year 1 - 30.25% (22 LPCs) • Supplemental comp: 13.75% for new FRs • Renewal = 70% on part A and B • FTA/Broker: • Year 1 - 27.5% • Years 2 to 4 - 7% • Years 5 to 10 - 3% For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

39. General information • Illustrations currently available for download in version 49.5 • Only one Navigator presentation available – Prepaid Premiums For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

40. Marketing Material For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

41. Single Premium Whole Life Introduced September 2009 For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

42. Introduction of Single Premium Whole Life • Ideal clients • Beneficiaries exercising the DuoGuard Rider • Annuity-Oriented Clients • Strong guaranteed return • Strong dividend performance • Same taxation as annuities on distributions; unlike annuities, no income tax due at death. • Non-profit organizations where MEC not a concern • Recipients of a lump-sum payment (lottery, inheritance, lawsuit) • Guaranteed single premium. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

43. General Information • Similar to PUA compensation –Agent comp: 3.25% • No marketing material being prepared. • No original age exchanges allowed to this product. For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004

44. Questions • Contact Life Product Support at 800-871-7780, Option 2 For producer use only. Not for use with general public. The Guardian Life Insurance Company of America, 7 Hanover Square, NY, NY 10004