QUALITY BUSINESS

1. QUALITY BUSINESS & SYSTEMS

2. 6 AREAS OF LOST BUSINESSTHAT HAVE ANEFFECT ONNET TO GROSS &RETENTION

3. 85% NET TO GROSS TARGET PERCENTAGES

4. DECLINES – DCL (4%) Review and use Field Underwriting Flash Sheet (AG-2512) Family Data Sheet Utilize trial applications Senior 10 apps on ages over 60 (if approved in your state)

5. District Office File Copy • Family Data • Member:__________________________ D.O.B. _________________ • Affiliation/Occupation:______________________________________ • Hourly Wage:_____________________________________________ • Family Members • Spouse:_____________________________ D.O.B. _______________ • Occupation: ________________________________________________________ • Hourly Wage:_____________________________________________ • Children:___________________ D.O.B.____________________ • __________________________D.O.B._____________________ • _________________ _________D.O.B._____________________ • __________________________D.O.B._____________________ • __________________________D.O.B._____________________ • Have you provided for your children’s college education?_______ • Have any of the family members ever had: • Heart Trouble_____________ Diabetes______________ • High Blood Pressure________ TB___________________ • Cancer___________________ Drug or Alcohol Abuse__________ • DUI______________ ____ Other Arrests___________________ • Hepatitis_______________ What Type____________________ • Any other operations, sickness, or accidents? • If so: Who_____________ When:________________________ • Do you own or rent your • home?__________________________________________________ • What are your monthly payments?________________________________________________

6. WITHDRAWN – WTH (4%) Buyer’s remorse Oversell Cementing the sale Answering all questions clearly Follow-up calls and Thank You Cards (AC-14) Completing the 3-part Summary Sheet (AG-2324)

7. INCOMPLETES – INC (1%) All applications completed prior to submission Questionnaires completed properly Saliva test completed (when necessary) Reviewing underwriting requirements outstanding in CAS

8. NOT TAKEN OUT – NTO (2%) Immediate delivery of all rated and amended policies Preparing applicants for possible ratings Insurance age correct on application Completing applications to avoid L-86’s Collecting proper premium for face amount requested Reassignment if not completed in a timely manner

9. CANCEL AS OF ISSUE – CAN (4%) Buyer’s remorse Oversell Cementing the sale Answering all questions clearly Follow-up calls and Thank You Cards (AC-14) Completing the 3-part Summary Sheet (AG-2324) Hand delivery of policies for any agent with below average retention Policies delivered to office not directly to applicant.

10. AMERICAN INCOME LIFE INSURANCE COMPANY Summary Sheet Applicant’s Name _____________________________________ Date _________________ Insured’s Whole Life Insurance Freedom of Choice/Final Expense Benefit $ _____________________________ Insured’s Term Insurance – Lump Sum $______________________________ or Beneficiary’s Readjustment Income (if elected at time of Insured’s death) $ ___________monthly for ___months Spouse’s Natural Death $______________________________ Children’s Natural Death (natural, step, or legally adopted children are eligible) $ ______________________________ Accidental Death Auto Death Common Carrier Death Insured’s $_______________ $_______________ $________________ Spouse’s $_______________ $_______________ $________________ Children’s $_______________ $_______________ $________________ Hospital Benefits (from accident) $_____________ per day (up to 365 days) Intensive Care (from accident) $_____________ per day (up to 14 days) Emergency Room (for treatment received within 72 hours of accidental injury) $_____________ Additional Benefits • _Lay-off and Strike Waiver of Premium_____________________________________ • ____________________________________________________________________ • ____________________________________________________________________ • ____________________________________________________________________ What I like best about the insurance program: ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ Organization __________________________Premium $____________ per ____________ Your Representative ___________________________________________________________ Code # ______________________________ Phone _________________________________ Read your policy(s) carefully when received and contact us if you have questions. Service is Our Commitment AG-2324 (7-01)

11. VERIFICATION SCRIPTPrimary Tel # _________________ BEST TIME TO CALL:_______AM / PM Second #_____________________ Cell # ________________________ Email:________________________ Agent _________________________ Date: ________________________ Applicant(s) _____________________________________ Person you spoke to: ________________________ Hello, may I speak with ___________? If applicant is not home, find out best time to call and complete line above. Hi, ___________my name is __________. I’m with the customer service division of American Income. The other day you applied for insurance with our representative (Agent name). Let me be the first to congratulate you. I will be reviewing the coverage(s) you applied for and need to ask you a few questions. Do you have just a couple of minutes? This won’t take long and I assure you that it’s painless. First of all, was (Agent) polite and courteous? ___Yes ___No. Did (Agent) answer all of your questions? ___Yes ___ No. Are there any comments you can make about (Agent) that I can pass along to his/her boss to show the type of job that he/she is doing?______________________________________________________________________________________ ___________________________________________________________________________________________________ Now I am going to do a quick review of the coverage you selected (Go over each benefit). Whole Life _________________________ GIO ___________________ WP ____________________ Rider Spouse _______________________ Rider Child __________________ Insured’s Term Ins – Lump Sum _________ or Beneficiary’s Readjustment Income (if elected at time of) Insured’s death _______________ per month, # of months ___________________ . Hospital Benefits (from accident) _______________ Emergency Room (for treatment received within 72 hours of injury) ___________________ I see the payment method you selected will be made on a: Monthly Basis for the amount of $______ from your: (verify from the app) Regular Checking Account ____ Checkless Checking Account ____ Savings Account _____ The payment is scheduled to be drawn from your account each month on the ___ (draft date). Is this correct? _____ Yes _____ No Please understand that this date is plus or minus three (3) days depending on weekends and bank holidays. Is this the account that your paychecks are deposited? _____ Yes _____ No. What date does your paycheck hit the bank? (You want to make sure that draft date is after the applicants pay date). If the accounts are different, make sure that there is money in the account on the _______ of the month. If they paid by check, say, “The check you gave will be deposited right away. That’s not a problem, right! If they paid by money order, say, “I see you gave the agent cash – did the agent leave you a receipt for your initial payment?” _____ Yes _____ No NOW, JUST A COUPLE MORE QUESTIONS. What is your current height_____________ and current weight _____________ Are you or any of the proposed insured individuals taking any medication at this time? (List below anything not on the application) _______________________________________________________________________________________ Have you or any of the proposed insured individuals been hospitalized in the last 5 years? (List below anything not on the application) _______________________________________________________________________________________ ***The following statement is if there is a possible item(s) on the app that may cause the policy to be rated*** The agent explained that we will do everything to get your application approved. However, the application may be rated or denied? _____ Yes _____ No (Refer to script if “no” answer) I am not saying it will be (rated or denied), just making you aware of all of the possibilities. You understand that if you are rated it will cost you a little bit more each month? Yes___ No___. Bank Verification: Bank Name ________________________________________ Tel # _______________________________ Acct # _______________________________________ Account #/info verified as correct _____ Yes _____ No Are ACH debits allowed? _____ Yes _____ No Are funds currently available to cover the amount of $ __________ _____ Yes _____ No Person spoke with at the bank __________________________________ Date __________ Time __________ I want to thank you for taking the time to talk to me tonight. You should be hearing something in about 4-8 weeks. If you have any questions in the future, please feel free to call us at any time. Have a good night. Verified by:____________________________________ Date:___________________________ (Agent completes questions in bold)

12. REOPEN or REINSTATE? • If the Issue date and the Paid to date are the same in CAS, it’s a REOPEN Example: Issue date 02/07/2009 and Paid to date is 02/07/2009 • If the Issue to date is (i.e.) 02/07/2009 and the Paid to date is 03/07/2009 then the policy was issued and paid for one month. That would be a reinstatement.

13. Where to send to at Home Office Reopens go to: POLICY ISSUE (PI) Reinstatements go to: POLICY OWNER SERVICE (POS)

14. Reopens are the quickest way to improve retention. • Only action that moves the gross submit from your AP&P report out of original writing month to the current month. Example: April 30 AP&P report Gross Sub Net Iss. Net Sub. Paid 4 mo 4mo Rate Nov 08 $10,000 $8,000 80% $6,900 69.0% Reopen $1,000 ALP in May 09 May 31 AP&P report will reflect the ALP reopened Gross Sub Net Iss. Net Sub. Paid 4 mo 4mo Rate Nov 08 $ 9,000 $8,000 88.9% $6,900 76.7% Moves (adds) the $1,000 ALP to the month of May 09 and removes it from November 08 gross submit

15. REOPEN procedures • Use reopen request form (AIL website, PI) • Collect necessary requirements that were not completed prior to business not being issued. • First 6 months from app: Good health statement, requirements, premium, MBD auth., HIPAA Over 6 months: New app marked as reopen w/initial policy number + GHS, premium, MBD auth., HIPAA, and requirements necessary

16. #6 LAPSED POLICIES THE PROFITABILITY OF YOUR AGENCY

17. You didn’t make the initial sale over the telephone, so why service the business on the phone. • Use lapses as door knocks • Additional people to see while in the field • Maximize your time on the field

18. Benefits of door knocking lapsed policies • Protect advances and bonuses with higher retention • Less time to reinstate an existing policyholder than making an initial contact sale. • 25% reinstatement bonus • Writing additional business once policy is reinstated • Referrals

19. The preferred method of reinstating a policy is in person If you are unable to see the policyholder in person, the second best option is to contact them by phone with a follow-up letter. Reinstating policies through the mail will work if done properly. * Initial contact by telephone * Always leave a message on answering machines * Follow up with a letter

20. Order of calls on phone nights • Policy Mod’s (L86, COD, RT99) (floaters) • Lost business from advance report: Put on direct, WTH, cancels, incomplete, NTO’s, declines • Service notices from home office including unable to draft and 40 day notices • Referrals • Leads from packets

21. LAPSE POLICY ACCOUNTABILITY This will provide five (5) essential elements to your conservation efforts: • Create immediate importance to the notice. • Increase your reinstatement productivity. • Increase back end money to accounts. • Provide a lead source for the agent to go out and write additional business. • Bonuses to agents. Additional information regarding how reinstatement effect your retention ratio, go to http://www.ailife.com log in and go to the Agency tab then click on: • Retention Questions & Answers

22. PROCEDURES FOR LAPSED POLICY PHONE CALLS Keep everything in plain English. Never say MBD. Say, checking account draft. Explain who you are and why you are calling. The reason you are calling is to update information. ALWAYS VERIFY ADDRESS WHEN SPEAKING TO SOMEONE ON THE PHONE. Always leave a message on the answering machine. Leave you name, phone number and extension and that you are calling regarding their policy with AIL/NILICO. Once you have either spoken to the policyholder or left a message on their answering machine, always follow-up with a letter so that they know who you say you are and they have all your contact information. In this day and age the policyholder can never be too sure who they are speaking to on the phone and that is why you always follow-up with a letter. The postal service can door knock for your conservation person in every household in the world without generating a single complaint. When you call on an older policyholder who has a family member assisting them, ask if there is a power of attorney to assist in their loved one’s affairs. That way AIL can speak to the family member or friend who has power of attorney regarding their policies and how important it is for them to keep their policies. COMMON REASONS FOR CANCELLATIONS 1. We changed our mind and just don’t want it. A. This is another way of saying they just can’t afford it. 2. Can’t afford it. A. See if there is anything you can do to make adjustments to the policy to save it. 3. Policy replaced by family member who now works for another insurance company. A. If they have A71000 or Cancer policies review the benefits and see if you can save those. 4. AIL took two months premiums from my account in one month. A. Have them check the dates on their statements. Chances are, one premium was for one month and the second draft was for the next month. 5. I get two separate bills and I am confused. If AIL can’t put all my bills on one statement, I want to cancel. A. When POS receives a payment with two different billing notices and if possible due to billing dates they will automatically combine the payments on one statement. If the combination of statements has not occurred, contact POS at POS@ailife.com and request this be done. If the policyholder is insistent on canceling their policy, leave them your name and number, tell them that if we can do anything for them in the future to give us a call and wish them a nice day. Make sure to put notes in CAS that contact was made and this policy was a confirmed cancellation.

23. OVERCOMING OBJECTIONS WHEN CALLING ON A LAPSED POLICY I CAN’T AFFORD IT? I’m glad I called to see what I can do for you. What time do you and your spouse (husband/wife) normally get home so that I can come out and see how we can make it more affordable for you? I’VE LOST MY JOB? I’m glad I called then. I’m sorry to hear that you are currently not working. Are you aware that if you were laid off due to a reduction in workforce and since you have had your policy over 60 days, you may be eligible for our lay- off waiver of premium? EXPLAIN LAY-OFF WAIVER. Send one out to them or email them the lay-off form from the AIL website. WE’VE PURCHASED COVERAGE ELSEWHERE? I’m glad I called then. You’ve been paying on your policies through AIL/NILICO for XXX years (or months) and I know that you would not want to lose what you have already put into the program. What I’d like to do is come out (or have a manager from our policy owner service division come out), go over your policies and remind you why you purchased the program in the first place. If they say no, ask them what their new coverage is and when they purchased it. Ask them if the new agent completed the required replacement forms for your state. If they are definite that they do not want anyone coming out, wish them a nice day and ask them to mail their old AIL policies back so that someone does not find them in the house when they die and try to collect on them. WE’RE MOVING? AIL/NILICO has offices in all 50 states, Canada, Virgin Islands, Puerto Rico, and New Zealand. Which state or country are you moving to so that I can update our records and you will not lose your valuable protection? I (OR SPOUSE) QUIT THE UNION. That’s why it is so important that you enrolled in the program in the first place. Remember, you may lose your benefits from the union because you have changed jobs, but the program you purchased through AIL/NILICO stays with you no matter where you are or what your job situation is.

24. TOOLS THAT MAKE REINSTATING THROUGH THE MAIL PROFITABLE Complete each form necessary prior to mailing to the policyholder. Reinstatement application (Good health statement) (AG-1781) MBD/Bank Authorization Card (AG-2032) HIPAA (AG-2439) All letters must be on agency letterhead and pre-approved through home office. Send/email them to: ryork@ailife.com for approval prior to using.

25. √ Always handwrite in the blanks of the reinstatement letter. √ Sign each letter individually. √ Using blue or green highlighter, highlight on each form where the policyholder needs to sign. √ Pre-addressed and stamped envelope with your name hand written on them.

26. REINSTATEMENT LETTER(additional Requirements) American Income Life Insurance Company (Agency) ______________ Date Dear American Income Policy Holder, I am writing in regard to your recent request for reinstatement of policy(ies) #_________, ___________. We have already received: _________________________________________________ _________________________________________________ _________________________________________________. In order to complete your request, we still need one or more of the following: ____ Month(s) premium in the amount of $_____________ ____ a good health statement signed and dated ____ bank draft authorization card signed and dated, if your banking information has changed ____ your current telephone number (___) ____ - _______ Once we have received all the necessary requirements, we will be able to consider reinstatement of your coverage. If you have any questions, either call me at ( )___ -_______, or e-mail at ________________@__________ Sincerely, General Agent American Income Life /mm opeiu 277, afl-cio/clc

27. REINSTATEMENT LETTER (unable to draft your account) American Income Life Insurance Company (Agency) Date_________ POLICY #(s)__________ ___________ Dear Policy Holder, I’ve just received an urgent message that we are unable to draft your account. Your policy(ies) are in danger of lapsing and I am sure you are not aware of this. I can help you apply for reinstatement. Simply complete the following: 1. Good Health Statement, signed and dated and a check for_______ months premium in the amount of $_____. or 2. Good Health Statement, signed and dated, a voided check for us to process a monthly bank draft and ____ months premium in the amount of $________. If you have already sent your payment to our Home Office in Waco, TX within the last two weeks, just complete and return the signed Good Health Statement in the envelope provided. I will make sure that everything is in proper order. For your convenience, I have included a new bank authorization card. If your banking information has changed, please sign the authorization, attach a voided check and return it to me. If I can be of any further assistance, please don’t hesitate to either call me at ( )_____-_________ or e-mail anytime. My e-mail address is: Sincerely, Master General Agent opeiu 277, afl-cio/clc Encl: Good Health Statement Bank Draft Authorization Return Envelope HIPPA

28. REINSTATEMENT LETTER (lapse letter) American Income Life Insurance Company (Agency) Date_________ POLICY #(s)__________ ___________ Dear Policy Holder, I’ve just received an urgent message that your policy has lapsed. I’m sure you are not aware of this. I can help you apply for reinstatement. Simply complete and sign the Good Health Statement and attach a check for two months premium in the amount of $______. If you have sent your payment to our Home Office in Waco, TX within the last two weeks, just complete and sign the good health statement and return it to me in the envelope provided. I will make sure that everything is in proper order. For your convenience, I have included a new bank authorization card. If your banking information has changed, please sign the authorization, attach a voided check and return it to me. If I can be of any further assistance, please don’t hesitate to either call me at (___) ___-____ or e-mail anytime. My e-mail address is: ____________________ Sincerely, Policy Owner Service Specialist mm opeiu 277, afl-cio/clc Encl: Good Health Statement Bank Draft Authorization Return Envelope HIPPA

29. Reinstatement Bonus • Bonus is 25% of the annualized premium. If case is in first-year an advance is given to the agent and charged to their account. If the case is in sub-year, a bonus is given to the agent and the company is charged. • Must be life case recoded to a different agent on bank draft with all back premiums collected. • Applicant check required from account being drafted. • We will allow returned items and lapses to count as eligible cases. • Case can only qualify one time – we will create a database of policies where the bonus/advance was paid out and monitor so we don’t pay on any one case more than once. • If a case is reinstated and lapses – we will not chargeback, but it will not count for bonus a second time. Bonuses/advances paid monthly by 15th of following month. Agents must be active as of bonus date to be eligible. SGA must monitor. We will review periodically. If we notice an abuse from any agency, that particular SGA/Agency will become ineligible for the bonus.

30. KNOW YOUR RESOURCES AVAILABLE ON THE AIL WEBSITE WWW.AILIFE.COM

31. POLICY ISSUE HINTS

32. Field Rating Amount Agent has anticipated additional premium will be required for a possible mortality rating on my request for life insurance coverage. I accept any additional risk classification premium as listed below. • Cash Collected With Application _____ • Additional Risk Classification Premium _____ • Total Premium _____ If premiums are being drafted from my bank account, I authorize American Income Life to draft my account for an amount not to exceed the total listed above. If excess premiums is not needed, I authorize the premium to be used to increase the face amount of the base policy. _______________________ Applicant Name (Please Print) _______________________ ________ Signature of Applicant Date _______________________ ________ Signature of Agent Date AG2496

33. Policy Issue HintL86 Frequently you will hear Policy Issue refer to a policy requiring an L86. L86 means signed amendment. Here are some of the most common Signed Amendments encountered: • Answer changed on the application without the applicant's signature (the applicant's initials are not sufficient) • Exclusion of a person or benefit • Riders - (impairments, hazardous sports, Alcohol) When a signed amendment (L86) is required, the Policy is mailed directly to the agency office. Included are copies of the amendment to be signed and a PML (Policy Modification Letter) describing why the amendment is required. When the signed amendment is returned to Home Office we compare and verify the signature on the amendment to the signature on the application. Once that is done, the policy is considered "Delivered".

34. Policy Issue HintNTO NTO stands for Not Taken Offer. This means that the policy requirement (signed amendment and/or COD) was not received by Home Office so the policy was not placed. To see what policies your agency has that will NTO in the next 30 days, go to CAS under "Reports" and then "Standard Queries", the second option is "Applications That Will NTO In Next 30 Days". This query gives you the most updated list of cases that could be NTO'd if the requested delivery requirement is not received. If a hard copy is needed to work from, please print the information you need from the CAS report. The most common NTO's are ranked below: #1 COD's and RT99's - Premiums or face amount has been recalculated for ratings, mistakes in calculations, or a combination of both. When the COD or RT99 is not returned the policy will NTO. #2 L86's - Signed Amendment Not Received #3 AMCD's - that is a combination of Signed Amendment and a COD/RT99 not being received Please keep close watch over your NTO lists. We hate to lose ANY business that has been approved. We know you feel the same way.

35. Policy Issue HintALT-CANCEL, ALT-VERIFY and ALT-DECLINE When "pulling applications" before they are sent to Home Office, you nowhave three options:  ALT-CANCEL, ALT-VERIFY and ALT-DECLINE.  The Alt Cancel and Alt Verify are to be used in lieu of Alt Expel.  With the emphasis on quality of business, we need to ensure that the applicant receives appropriate correspondence should their app be pulled whether it be from their request to cancel or your verification process.  Each of the ALT terms are explained below:  ALT-CANCEL - use when an application is cancelled by the applicant before it is sent to Waco.  This allows Home Office to cancel the application without affecting the agent.  The only time you should use ALT-CANCEL is when the customer requests it.  No other uses are acceptable.  You should write ALT-CANCEL across the top of the application and put a "C" in the last column on the transmittal.  The applicant will receive a letter indicating "We have been informed of your request to cancel the above mentioned application."   **ALT-CANCEL replaces the old ALT-XPL process.  Please discontinue writing ALT-XPL on applications and transmittals. ALT-VERIFY - use for applications that you have called to verify and that verification indicates the applications should not be submitted.  Those applications must be sent to Home Office so that there is a record of the application in the event of an inquiry, complaint or a claim.  They should never be destroyed or returned to the applicant from your office.  You should write ALT-VERIFY across the top of the application and put a "V" in the last column on the transmittal.  Also, please attach your completed phone verification form to the app so that we have a record of why the app is not being submitted.    The letter we will send to the applicant will state "We contacted you by telephone in order to verify certain information that you provided in your application.  The responses to our questions do not meet out established billing guidelines and we are unable to issue the coverage for which you applied." ALT-DECLINE -  use for applications that were taken, but you now realize the applicant is uninsurable.  ALT-DECLINE allows home office to process the application without affecting the agent.  You should write ALT-DECLINE across the top of the application and put a "D" in the last column on the transmittal.  The letter sent to the applicant will state "We regret that we are unable to issue your policy because of the information you furnished on your application."  Do I need to mark all family apps?   Yes.  Write the Term ALT-CANCEL, ALT-VERIFY or ALT-DECLINE across the top of the application.  Every application must be marked.  If one app is marked and the others are not, we will submit those that are not marked.  The transmittal must be marked as well.  What do I do if the customer wants to cancel, but the application is in the mail to Home Office?  There is an ALT-CANCEL form on the Agency Resource Center that allows you to easily request an ALT-CANCEL of an application.  Do not use this form if you are able to write ALT-CANCEL on the application before it is mailed.  Help us help you by properly marking the applications to ensure your retention is not negatively impacted and to ensure the applicant receives proper correspondence.