Discover Living Benefits Within a Life Policy

1. Discover Living Benefits Within a Life Policy

2. Market Overview • US population is under-insured • Decline in agent population means fewer are afforded the opportunity to purchase individual life insurance • Excessive reliance on group term • Many people tend to value “living” benefits over death benefits • Need for living benefits • Population aging • Concern about out-living assets • Concern of becoming a burden on children or other relatives • Public sector programs inadequate

3. Market Overview • Financing long-term care is a looming national crisis • Need for long-term care will explode as population ages • Public programs are inadequate • LTC insurance is available but cost is high • “Use it or lose it” • Life Settlement concepts offer a new approach to product design

4. Market Overview • 60% of all Americans who reach age 65 may need long-term care at some point in their remaining lives • By 2020, about 157 million Americans will be afflicted by a chronic illness • Health insurance plans don’t cover certain costs associated with long-term care illness • Medicaid only pays when an individual has spent down or liquidated a substantial amount of their assets • How does your client plan on paying for uninsured medical costs?

5. The Concept • What if there was an innovative way to have meaningful “living” benefits within a competitive Universal Life insurance policy, which provides…

6. The Concept • New and innovative approach to product design • Combination of life, chronic illness, accelerated benefits and settlement concepts all in one product • Policy to cover the total lifetime of insureds • Protects against early death • Provides a tax-free annual benefit on chronic illness certification on a “cash basis” • Ability to use annual benefit for any need • Ability for paid-up policy on amounts not accelerated • Retains pro-rata share of existing CSV • “Me” policy for the insured • Life product “for the living”…

7. “Life for the Living”™Policy Benefits • Competitive Current Assumption UL Product • National Life of Vermont • Maximizes DB • Provides strong CSV’s • Premium/income flexibility • No cost rider • Rider available on all policies up to $2 million. Additional policy issued above $2 million. • At Chronic Illness Trigger • Annual benefit available up to annual IRS limits ($102,200 in 2009, indexed annually) • Cash benefit—No restrictions as to the use • Income-tax free living benefits • No additional cost for the rider • Ability for paid-up policy on DB not accelerated • No waiting period

8. “Life for the Living”™Policy Benefits • Options • No restrictions on the use of benefits received • Can be used for any expense including: • Uncovered medical expenses or deductibles • Cover expenses for home health or friends to assist with your care • Replace income or help with everyday expenses • Home modifications • Cover expenses for medical procedures or drug therapies • Travel or entertainment • Savings, replenish retirement assets or eliminate debt • Make gifts to loved ones

9. “Life for the Living”™Policy Specs • Issue ages 0-85, five underwriting classes • Two Preferred NS classes • Table III to Standard Program • Two smoker classes (Preferred and Standard) • Minimum face amount: $250,000 • Maximum face amount with rider: $2,000,000 • Additional policy issued on policies greater than $2 million • If $1 CSV at age 100, DB carries to age 120 guaranteed with no additional premiums • Available on all table ratings • Mortality vs. Morbidity underwriting • Currently New York only • Other riders (Terminal illness, Over Loan Protection)

11. Product Positioning • Competitive UL product • No cost rider-Available up to $2 million of DB • Flexibility of rider • Determine annual benefit ($0 to annual IRS limits) • Paid-up policy • At initial trigger (yes/no) • In any year thereafter if still cannot perform 2 of the 6 ADL’s • CSV reduced by annual % reduction of DB • If there is a high CSV, might use current values to pay future premiums • Possibly take paid-up policy and use CSV tax-free income to basis • Cash benefit vs. reimbursement of expenses • Can be written in a Trust • Expedited Regulation 60 process • Perfect Buy/Sell product • One-of-a-kind product

12. “Life for the Living”™ • National Life Insurance Company • Mutual holding company • Innovative products • Strong sales results • Ratings • A (Excellent): AM Best • A+ (Strong): S&P • A2 (Good): Moody’s • Comdex of 81 • $20+ billion of assets • $60+ billion insurance in-force

13. “Life for the Living”™

16. “Life for the Living”™Underwriting Programs • Table III to Standard • Rider on all policies regardless of the rating class up to $2 million • Mortality vs. Morbidity underwriting • BreakThrough • Preferred or Standard Term policy within last 5 years • Conversion to “Life for the LivingTM” • No underwriting, most companies on approval list • Maximum Death Benefit: $1 million • JumpStart • Preferred or Standard UL policy within last 3 years • Or 5 years if had physical exam in last 24 months • Replacement of current contract not required • No underwriting, most companies on approval list • Maximum Death Benefit: $1 million

17. “Life for the Living”™Quotes “Finally a policy that recognizes the importance of paying a benefit when your clients need it most!” “A life product that also offers protection in the event of a chronic illness.” “Why would I sell anything else!”

18. Discover Living Benefits Within a Life Policy