Welcome to United American Western Region Seminar

1. Welcome to United American Western Region Seminar

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3. Charles R. Mankamyer Senior Vice-President United American – General Agency • Past President & CEO • American Life & Health Group, Inc. • Palm Beach County, Florida • Contracted with United American as a General Agent in 1979 • GA with Career Agents in Florida • GA with Brokers/Agencies in all 50 states • 469.525.4764 • crmankamyer@torchmarkcorp.com

4. John A. Weir DirectorUnited American – General Agency “This is a great opportunity, and I hope to consistently grow UA’s presence in the western region.” - John Weir • 214.901.6016 • jaweir@torchmarkcorp.com

5. Focus of this meeting • Help you transition more of your business into Senior Market. The Senior Market and Medicare Supplements offer the MOST growth opportunity in the most stable market! • New Leads Systems (Lead Contract) • 2,000 Piece Lead Order (Entered into drawing) * • Medicare Advantage – Cancellations! • Persistency - $ Your Profits $ • Overview of our Supplemental Health, Life & Annuity Products ** • Outstanding opportunity for the Producer and the Agency * Drawing held monthly; must be licensed with United American to qualify ** Product availability varies by state

6. Introduction to Company History • United American opened its doors in 1947 to provide life, supplemental health, and accident coverage to individuals. • Even before Medicare was signed into law in 1966, the Company made the decision to focus its attention on the individual health market with an emphasis on Seniors. This foresight paid off and we gained recognition as one of the nation's leading writers of individual Medicare Supplements*. United American’s focus has been on Medicare Supplements since 1966 * NAIC 2009 Medicare Supplement Insurance Experience Report, May 2010

7. UA Financial Strength Ratings United American • A+ (Superior) Financial Strength Rating from A.M. Best Company for more than 30 consecutive years (as of 6/10) • AA- “Very Strong” Financial Strength Rating from Standard & Poor’s (as of 5/10) Safety for your clients, you and your family!

8. Service Performance Record Our 2010 Service Performance Record speaks for itself

9. What UA Offers Our Producers & Policyholders, today! • High Commissions and Renewals paid for the life of the policy. • Yes/No Applications

10. What UA Offers Our Producers & Policyholders, today! • High Commissions and Renewals paid for the life of the policy. • Yes/No Applications • Policy Form INDEM1 • Sold only in California

11. What UA Offers Our Producers & Policyholders, today! • High Commissions and Renewals paid for the life of the policy. • Yes/No Applications

12. What UA Offers Our Producers & Policyholders, today! • High Commissions and Renewals paid for the life of the policy. • Yes/No Applications

13. What UA Offers Our Producers & Policyholders, today! Life InsuranceFundamental Life Series ILife insurance policies from $1,000 - $20,000 10 Year Renewable Term (ages 18-80), Whole Life (ages 0-80) and 21 Pay Increasing Benefit (ages 0-72) Fundamental Life Series IILife insurance policies from $25,000 - $500,000 10 Year Renewable Term (ages 0-60), 10 Year Term To Annual Renewable Term (ages 20-70), 20 Year Term to Annual Renewable Term (ages 20-60) and Whole Life (ages 0-80)

14. What UA Offers Our Producers & Policyholders, today! Annuities Lifestyle Single Premium Minimum 3% Interest Maximum Deposit $20,000 Minimum Deposit $5,000 Issue Ages 0-80 Withdrawal Charges Eliminated after Year 6 Hospitalization and Nursing Home Waiver of Withdrawal available in most states

15. Medicare Facts Traditional Medicare Supplements Opportunity- # of Senior Americans aging into Medicare In the next 5 years, 11.5 million Americans will enter the Medicare Supplement Marketplace

16. Medicare Facts • In the next 10 years, 21 million American Seniors will enter the Medicare Supplement Marketplace • What portion of this outstanding business opportunity will you convert into your personal financial security?

17. UA’s 2011 Medicare Supplements UA Markets 10 of the 11 Standardized Plans (A, B, C, D, F, HDF, G, K, L, and N)  High Deductible Plan F benefits begin after out-of-pocket expenses exceed calendar year deductible ($2,000 in 2011) * Copay = $20/office visit; up to $50/ER visit  Once annual limit is reached the plan pays 100% of the Medicare copayments, coinsurance, and deductibles for the rest of the calendar year.

18. History of HDF • Designed to address Seniors’ concerns of higher premiums • Great choice for seniors who are relatively healthy and can afford to pay out-of-pocket deductible • Per the Centers for Medicare & Medicaid Services(CMS), the annual HDF deductible may or may not increase.Adjustments in the HDF annualdeductible amount is subject to the release of theConsumer Price Index (CPI) which generally occursinmid-to-late September of each year. • 2011 deductible ($2,000) did not change from 2009 and 2010 • One rate increase nationwide over the last 5 years

19. Cost of Insurance How can you save me premium dollars? Challenge: • Most Americans think they pay too much for nearly any form of insurance they carry Solution: • Help save clients premium dollars

20. Premium Savings Q: How do people save money on any kind of insurance (health, car, homeowners)? A: They raise their deductible. And SAVE $$$$$$$$$$$$$$$$$$ This is the same premium as HDF

21. HDF Claim Example Mary has an HDF policy What happens when she has a Part B claim?

22. Mary’s Part B Claim with HDF • Medicare pays 80% of Medicare-approved charges • Mary pays 20% (until her deductible is reached; think of the deductible like a copay/coinsurance) plus any excess charges • When Mary reaches her $2,000 annual deductible, the HDF policy begins paying the 20% plus any excess charges

23. Cost-Sharing Concept * Policyholder must meet HDF annual deductible ($2,000 in 2011) before benefits begin, and pay their HDF premiums.

24. Premium Savings Example Agents can help Seniors understand how HDF may be suitable coverage for their health needs AND budget National average, age 65, female, non-tobacco user. Example assumes no rate increases on either plan; policyholder must meet HDF annual deductible ($2,000 in 2011) before benefits begin For illustrative purposes only

25. Premium Savings Example Agents can help Seniors understand how HDF may be suitable coverage for their health needs AND budget * UA 2011 ProCare CA rates, Area 3, 65-yr-old female, nonsmoker ** Example assumes no rate increases on either plan; policyholder must meet HDF annual deductible ($2,000 in 2010) before benefits begin For illustrative purposes only

26. Premium Savings Example • In the previous slide, the example assumed HDF premium savings of $13,440 for California over a 10-year period. • Example assumes no rate increases on either plan; however based on Company experience, Plan F rate increases occur more frequently than on HDF, which averaged only one increase nationwide over the last 5 years. • Do you know of any other Medicare Supplement that has had only one rate increase in the last 5 years? • Do you know of any with a 25% rate reduction?

27. HDF vs. Plan F • HDF premiums are LOWER than Plan F premiums because HDF has a $2,000 out-of-pocket deductible before the benefits take effect • HDF policyholder does NOT have to meet deductible BEFORE Medicare will pay!! • PLUS, Excess Charges

28. Claims Data • 80% of United American’s Medicare Supplement population up to age 68 has annual claims above Original Medicare of $534 on average • 78% of our Company’s Medicare Supplement population up to age 72, has annual claims above Original Medicare of $621 or less on average • 71% of our Company’s Medicare Supplement population age 73 or older, has annual claims above Original Medicare of $707 or less on average • Source: United American 2009 Claims data)

29. Saving Premium Over Time Example assumes no rate increase and no Medical High Deductible increase.

30. Premium Savings How could Mary use money leftover from her premium savings?

31. Three Great Options For Annual Premium Savings • Life Insurance • Reserve Fund Annuity • Lifestyle Annuity

32. HDF and Reserve Fund Annuity (RFA) • UA offers a unique product – Reserve Fund Annuity - that assists Med-Supp policyholders with paying HDF calendar-year deductible or copayment • RFA’s interest rate is guaranteed at 3% - higher than some current savings accounts at many banks • No charge to open, no lock-in time for deposits, no surrender charges, and no commission loads • HDF frees unspent premium so customers can buy additional coverage - this generates more commissions for you!

33. Reserve Fund Annuity • Funds in an RFA can be used to pay for calendar year deductible or copayments associated with ProCare Medicare Supplement Plans A, B, D, HDF, G, K or L  • With Plan A: Medicare Part A hospital inpatient deductible, Medicare Part B annual deductible, and Medicare Part B excess charges for Medicare approved services; • With Plans B & D: Medicare Part B deductible and Medicare Part B excess charges for Medicare approved services; • With Plan G: Medicare Part B deductible. • With HDF: Calendar year deductible ($2,000 in 2011) • With K & L: Out of Pocket limit ($4,640 & $2,320 respectively in 2011)

34. Three Interest Rate Examples * Accumulating monthly (compounded annual yield)

35. Continuing to Improve Seniors’ Options AnnuitiesLifestyle Single Premium Minimum 3% Interest Maximum Deposit $20,000 Minimum Deposit $5,000 Issue Ages 0-80 Withdrawal Charges Eliminated after Year 6 Hospitalization and Nursing Home Waiver on Withdrawal available in most states

36. Continuing to Improve Seniors’ Options Life InsuranceFundamental Life Series ILife insurance policies from $1,000 - $20,000 10 Year Renewable Term (ages 18-80), Whole Life (ages 0-80) and 21 Pay Increasing Benefit (ages 0-72) Fundamental Life Series IILife insurance policies from $25,000 - $500,000 10 Year Renewable Term (ages 0-60), 10 Year Term To Annual Renewable Term (ages 20-70), 20 Year Term to Annual Renewable Term (ages 20-60) and Whole Life (ages 0-80)

37. Life Expectancy/Renewals-Total Income Other companies dramatically reduce or eliminate long-term renewals to Agents after first five renewal years, touting ‘short average life of their business’ as the reason. We base our decision to continue paying long-term renewals on solid research. • Average 65-year-old man can expect to live to age 84 • Average 65-year-old woman can expect to live to age 87 • Some couples will have at least one partner live to age 90 or 95 That’s potentially 25-30 years of renewal commissions!! Limited to 6th policy year on Guaranteed Issue Medicare Advantage replacements; not applicable in WA.

38. UA Level Renewals The key to Producers’ long-term financial security!!! IT IS TIME TO ADD YOU & YOUR FAMILY INTO YOUR BUSINESS DECISIONS For illustrative purposes only.

39. UA Medicare Supplement Level Renewals If you earned $50,000 in 1st year commissions and level renewals after 10 consecutive years your annual income would be $500,000 = $41,666 Monthly - % persistency (death & lapses) Vested from first dollar Paid for the life of the policy Willable

40. Think of your Client … Service … After the Sale! • Sold Medicare Supplement at Age 65 – client in good health • Age 75 – client no longer in good health and needs Agent’s personal service … We appreciate our Agents and clients. We pay renewals to service the client as long as they are our policyholders!!!

41. Medicare Advantage Plans – Additional Opportunity

42. Medicare Advantage Plans • In 2010, more than 636,000 seniors were canceled by their Medicare Advantage provider • Today there are almost 700,000 canceled seniors from MA plans for 2011! • All UA Medicare Supplements are “Guaranteed Renewable for Life”, UA can not cancel the senior! • Medicare Advantage Plans can change the Senior’s benefits

43. Medicare Advantage Plans If the Senior is NOT CANCELLED • Some changes in 2010 MA Plans: • Higher Deductibles / Copays • Increased Out-of-Pocket Costs • Fewer Doctors / Hospitals • Higher Cost to the Senior • More Changes to Come in 2011: • Government starts Defunding • More MA Cancellations • Higher Deductibles / Copays More Individuals Moving to Medicare Supplements

44. Medicare Advantage Plans 2009 vs. 2010 Benefit Reductions More changes for 2011 … UP TO $10,000 Out-of-Pocket Costs to Seniors! • Fewer Doctors/Hospitals • Higher cost to the senior! More Individuals Moving to Medicare Supplements Source: Medicare.gov

45. Learn More at CMS About Medicare Advantage! • http://go.usa.gov/CL3 and click on ‘Downloads’ • This site is an excellent overall source of information about Medicare Advantage enrollments. • The more you know, the more you can help your customers make the right decision.

46. Never Run Out of Leads Again!

47. U & UA The Best Team in The Senior Market

48. Would You Trade 2% for 15% ??? Optional Lead Contract

49. (Hospital Indemnity, Cancer, Critical Illness, Accident & Medicare Supplement) 15% of NAP placed into Agents Personal Lead Account Health Insurance Premiums

50. Sell two (husband & wife) our most popular Medicare Supplement Plan F, sold in California (area 3, age 65, non-tobacco) Example UA helps our Agent build their business…Vendor List – 60 Approved Lead Vendors