TMK Agent training only. Not for sales use. HDF, RFA and the Female T-65 Market Agent Training Only TMK Agent training only. Not for sales use.

TMK Agent training only. Not for sales use. Any policy sold should be suitable to the needs of the applicant based on their health status and financial situation. TMK Agent training only. Not for sales use.

TMK Agent training only. Not for sales use. Great reasons to market High Deductible Plan (HDF) with a Reserve Fund Annuity (RFA) to T-65 Female Head of Household TMK Agent training only. Not for sales use.

TMK Agent training only. Not for sales use. Reasons to Market HDF with RFA Supports New Agent Training / Recruiting It’s an Easier Sale Annuity with Great Features Ability to Earn Higher Commissions

TMK Agent training only. Not for sales use. Supports New Agent Training / Recruiting Instills confidence in new Agents, as they won’t get turned away as often Agents can market closer to home as T-65 seniors do not have a current Med-Supp or Medicare Advantage (MA) with any company, minimizing price shopping issues

TMK Agent training only. Not for sales use. Supports New Agent Training / Recruiting T-65s are not yet locked into MA plans, nor do they have a Med-Sup – resulting in a higher number of ‘meaningful’ presentations Allows new Agents to easily learn how to present HDF and sell additional products with many more viable presentations

TMK Agent training only. Not for sales use. It’s An Easier Sale Competitive Rates T-65s may be more familiar with higher deductible plans from exposure to their previous coverage – whether employer-sponsored or individual There are more T-65 female prospects than T-65 males, thereby increasing the prospect pool T-65s ARE statistically healthier

TMK Agent training only. Not for sales use. It’s An Easier Sale T-65 Females who are Head of Household have assets on top of income for multiple product purchases, associated with saved assets, inheritance or proceeds from divorce (Average 50% divorce rate nationally)

TMK Agent training only. Not for sales use. Annuity with Great Features Only company we’re aware of that offers a Reserve Fund Annuity that can pay HDF claims directly from the annuity Reserve Fund Annuity interest rate at 3% pays higher interest rates than current savings account rates being paid at many banks Check for current, comparative rates

TMK Agent training only. Not for sales use. Annuity with Great Features: No “Lock & Load” – Savings are Accessible No lock-in time for deposits No surrender charges No commission loads on the Reserve Fund Annuity $4,000 per year maximum deposit $70,000 lifetime maximum deposit

TMK Agent training only. Not for sales use. Ability to Earn Higher Commission T-65 HDF Rates with LNL are competitive T-65 HDF has higher commissions than Plan F - 15% versus 12% Multiple-product purchases proven to increase overall client retention

TMK Agent training only. Not for sales use. Ability to Earn Higher Commission HDF when sold with the RFA frees up money for the customer to buy additional coverage, where appropriate Also generates commissions and bonuses for the Agent/Managers Product examples: 15% HDF commission + 65% Whole Life commission + 40% Life Bonus + Extra Annuity commission for deposits over > $4,000 at competitive rate

TMK Agent training only. Not for sales use. From the Customer’s Perspective – Why HDF? TMK Agent training only. Not for sales use.

TMK Agent training only. Not for sales use. Why HDF? Don’t Pay For Coverage That Isn’t Needed Financial Reality Savings to Purchase Additional Products

TMK Agent training only. Not for sales use. Why Pay For Coverage That Isn’t Needed? Under a traditional Medicare Supplement plan, the client generally pays a higher premium that covers most of their Medicare eligible expenses Under HDF, the client pays only for the expenses they incur up to the annual deductible, and then the coverage pays for most charges

TMK Agent training only. Not for sales use. Monthly Premium Comparison (Female Turning 65 purchase) Plan F$173monthly premium (2010 Texas rate, Female, Non-smoker, Area 3, T-65) HDF-$54monthly premium ( 2010 Texas rate, Female, Non-smoker, Area 3, T-65) =$119monthly premium savings Consider the following example.

TMK Agent training only. Not for sales use. Financial Reality On average, 81% of the United American Medicare Supplement population under age 68 has annual claims of $1,900 or less, with the average annual claim $500.

TMK Agent training only. Not for sales use. Financial Reality Under Age 68 Med-Supp Claim Amounts % of Population Average Annual Claims Cost Under $20026%$77 Under $50050%$196 Under $1,00068%$332 Under $1,90081%$500 Over $1,90019%$972 Totals100%$1,370 (based on 2008 UA claims source data).

TMK Agent training only. Not for sales use. Financial Reality Remember, the difference between a Plan F and a Plan HDF is the cost of the premium and the annual deductible that the client must pay before policy benefits take effect Claims could be incurred prior to the RFA being sufficiently funded to pay the HDF deductible, so be sure the client is aware of this requirement $50/month does not fully cover the initial Part A deductible, but will cover the Part B deductible in a little over 3 months

TMK Agent training only. Not for sales use. Financial Reality Agent Message: “We can help you (the client) prefund the annual deductible through the purchase of a Reserve Fund Annuity. Properly funding a Reserve Fund Annuity allows the Company to pay your providers from the annuity until the annual deductible amount ($2,000 in 2010) 1 is reached. If the account balance in the RFA is not sufficient to pay the full amount owed to the healthcare provider, you will be responsible for paying any remaining balance directly to the healthcare provider.” 1 Determined by Medicare and subject to change annually (

TMK Agent training only. Not for sales use. Savings to Purchase Additional Products $119monthly premium savings -$50minimum monthly deposit in RFA (won’t fully fund deductible) $69remaining savings So now our example looks like this:

TMK Agent training only. Not for sales use. Savings to Purchase Additional Products What can the client do with it? Buy additional coverage! Life Insurance!

TMK Agent training only. Not for sales use. Savings to Purchase Additional Products 65-year-old, Female, Non-Smoker $5,000 Whole Life (WLN) $38.58 per month

TMK Agent training only. Not for sales use. Savings to Purchase Additional Products $119monthly premium savings -$50minimum monthly deposit in RFA (won’t fully fund deductible) -$38.58$5,000 WLN policy $30.42remaining savings

TMK Agent training only. Not for sales use. Savings to Purchase Additional Products Instead of having just one single policy, the client now has: All the benefits of a standard Plan F Reserve Fund Annuity to fund claims until the policy benefits take effect Enhanced their insurance coverage by adding a $5,000 WLN policy And still has $30.42 left over each month

TMK Agent training only. Not for sales use. Agent Commissions – Why HDF? TMK Agent training only. Not for sales use.

TMK Agent training only. Not for sales use. What type of commission can an Agent earn? Below are commissions for a Female turning 65 who purchases an HDF vs. Plan F (TX rates, area 3, non-smoker) Standard FHDF Annual Premium$2,076$648 Commission Percentage12%15% Total Commission$249$97 Seems the Agent does better selling a Plan F, right? WRONG!!

TMK Agent training only. Not for sales use. Premium Reallocation If customer purchases an HDF policy instead of a Plan F, the customer has a monthly premium savings of $119.

TMK Agent training only. Not for sales use. Premium Reallocation What can they do with it? Open a Reserve Fund Annuity! $119monthly premium savings -$50minimum monthly deposit in RFA $69remaining savings

TMK Agent training only. Not for sales use. Premium Reallocation Even after the HDF premium is paid and the minimum deposit of $50 made to the RFA, money remains.

TMK Agent training only. Not for sales use. Premium Reallocation What can they do with it? Buy additional coverage! $69remaining savings -$38monthly premiums for WLN policy x12months $372annual premium at 65% commission = $241

TMK Agent training only. Not for sales use. Premium Reallocation Standard FHDF Commissions$249$97 Commissions on Life-$241 Plus Bonus (assuming 40%*)-$148 Total Commission$249$486 * Assuming $1,000 AP gross life submit requirement is met each week

TMK Agent training only. Not for sales use. Premium Reallocation The Agent makes an additional $294 commission on the additional policies sold and an additional $545 bonus (assuming 40% bonus). Which would you prefer? $249 or $486? That’s $237 difference!!

TMK Agent training only. Not for sales use. Difference in Earnings An average Agent will sell 2 Plan Fs a week. That’s $249 in commission times two policies for a weekly income of: $498 Weekly Income Selling Plan F

TMK Agent training only. Not for sales use. Difference in Earnings An average Agent will sell 5 HDFs a week. With the premium savings used to fund a RFA and purchase life insurance, that’s $486 in commission and bonus times five policies for a weekly income of: $2,430 Total Med-Sup & Life Weekly Income Selling HDF

TMK Agent training only. Not for sales use. Difference in Earnings $498 Weekly Income Selling Plan F Vs. $2,430 Weekly Income Selling HDF & Life That’s a $1,932 difference!

TMK Agent training only. Not for sales use. Difference in Earnings Calculate that for annual earnings $25,896 vs. $100,464

TMK Agent training only. Not for sales use. Oh, by the way… Customers that aren’t satisfied with their interest rate in banks or CDs… Liberty’s Flexible Premium Annuity

TMK Agent training only. Not for sales use. Oh, by the way… Guaranteed minimum 4% interest rate

TMK Agent training only. Not for sales use. Oh, by the way… $500 monthly deposit for 10 years x 4% interest rate $73,588 That’s $13,588 in earnings

TMK Agent training only. Not for sales use. Oh, by the way… Flexible Premium Annuity does have a surrender charge: Year 1: 12%Year 4: 6% Year 2: 10%Year 5: 4% Year 3: 8%Year 6: 2%

TMK Agent training only. Not for sales use. Commissions Deposits exceeding $2,000 in the first policy year, the first year commission will be 10% on $2,000 and 3% on the excess.

TMK Agent training only. Not for sales use. Commissions A 1% commission will be paid on renewal premiums received after the first year. If annuity premiums are increased in the first year or in subsequent years, there will be a 10% commission on increases up to a total policy year premium of $2,000.

TMK Agent training only. Not for sales use. Commissions A 3% commission will be paid on tax-qualified rollovers from an IRA with another company or bank into an IRA with LNL. There will be no commission paid for a rollover of funds from LNL policies or annuities.

TMK Agent training only. Not for sales use. Commissions Unit Manager 15% of Agent Commission Branch Manager 9% of Agent Commission