1. © 2015 National Life Group ® National Life Insurance Company ® | Life Insurance Company of the Southwest ® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX and their affiliates. Each company of NL Group is solely responsible for its own financial condition and contractual obligations. LSW is not an authorized insurer in New York and does not conduct insurance business in New York. The companies of National Life Group® and their representatives do not offer tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor. 412(e)(3) retirement plans are offered and administered independently of the companies of National Life Group. National Life is bound only by the terms of the life insurance contracts issued by the Group insurance companies. TC88381(0116)3 412(e)(3) The Retirement Solution

2. © 2015 National Life Group ® THE RETIREMENT ISSUE 2

3. © 2015 National Life Group ® Leverage business dollars to fund tax deductible personal benefits Provide a competitive benefit to help attract and retain highly qualified employees Employer’s contributions that are not included in income by the participant Retirement Income The opportunity to purchase life insurance with tax deductible dollars BENEFITS OF A 412(e)(3) 3

4. © 2015 National Life Group ® 412(e)(3) DEFINED BENEFIT PLAN *Guarantees are dependent upon the claims-paying ability of the issuing company. Funded solely with insurance company contracts Contribution and benefit based on contract guarantees* 4

5. © 2015 National Life Group ® 5 Entry Age Retirement Age Life InsurancePlan Duration Average Compensation Annuity Employee Demographics DETERMINING TAX DEDUCTION / CONTRIBUTION

6. © 2015 National Life Group ® LIFE INSURANCE IN A 412(e)(3) Purchased on a pre tax basis May complete your retirement plan Guaranteed cash value at retirement Increases tax deduction for the businessFringe benefit for employees

7. © 2015 National Life Group ® LIFE INSURANCE OPTIONS WHEN THE PARTICIPANT LEAVES THE PLAN: Surrender the Policy  Take a Taxable Distribution  Buy the Policy  Exchange the Policy – Qualified Plan Exchange Privilege (QPEP)*  7 *Unique to National Life Group

8. © 2015 National Life Group ® QUALIFIED PLAN EXCHANGE PRIVILEGE RIDER (QPEP) HOW IT WORKS Participant surrenders policy for its cash surrender value and retains the proceeds under the plan or rollover to an IRA. New policy issued outside of plan for Net Amount at Risk (Face Amount – CV) without any medical evidence, regardless of health, at current attained age. The newly issued policy can be any type of permanent insurance offered by the insurance companies of National Life Group, it does not need to be the same type of insurance as the policy issued in the qualified plan. 8 QPEP rider (form series 8518) is issued by National Life Insurance Company. QPEP rider (form series 8336) is issued by Life Insurance Company of the Southwest.

9. © 2015 National Life Group ® REDUCING OR ELIMINATING CONTRIBUTIONS There are three options available if there is a need to reduce contributions long term: Reduce formula  Convert from Fully Insured 412(e)(3) to traditional defined benefit  Terminate plan  9

10. © 2015 National Life Group ® THE 412(e)(3) PLAN SOLUTION BUSINESS AND PARTICIPANTS Tax Deductible Contribution Reward Yourself and Key Employees Provide Rank and File meaningful benefit EXECUTIVE Retirement benefits Tax deferred growth Income Tax Free Death Benefit PERMANENT LIFE INSURANCE Acquired with pre tax funds Completes the retirement plan in the event of premature death Provides family with financial protection 10