Writing Quality Business

1. Writing Quality Business Agent training only. Not for sales use. LNL2280 0313

2. Recap of Changes Impacting Quality • Increasing Direct Pay on Section 125 Worksite cases must qualify (70%) • Increasing max amount of Direct Pay per policy ($600) • Increasing AP per sale with Laptop implementation • Increasing AP per sale with needs based Worksite sale • But at the same time… • Increasing impact of poor DCN & Persistency on Direct Pay including total loss of Direct Pay • Increasing impact of poor DCN & Persistency on ability to earn bonus

3. What’s in it for you? • Make more money by writing quality business • Make more money by helping your Agents write quality business • Make more money by retaining Agents

4. It’s not how much you write, it’s how much you keep. TMK1536 092910 Agent training only. Not for sales use.

5. Where can I find this information? Quality and Compensation Information foundin the Guide to Growth on Agent Services:

6. Guide to Growth

7. Where can I find this information? Individual underwriting rules found in the Agent Instruction Guide on Agent’s Services:

8. Agents Instruction Guide

9. Where can I find this information? Worksite guidelines are found in the Worksite Agent Guide on Agent Services:

10. Worksite Agent Guide

11. Where can I find this information? Reports at a Glance and Steps to Control DCN/Persistency are found on Agent Services:

12. What is DCN? Declines (1%): Primarily worksite. Poor training, systems, and oversight. Cancellations (3%): Primarily individual. Poor training, systems and oversight. Not-Takens (5%): Primarily worksite. Poor training, systems and oversight. Company DCN 9% as of Jan. 2013

13. Top Reasons For Declines Declines (1%) Only 1 policy per family or individual Ineligible dependent Dependent not eligible without employee coverage Medical history Not employed long enough Amount exceeds limits

14. Top Reasons for Cancels Cancellations (3%) Non Sufficient Funds/Bad Bank Information Outdated COD Requested by customer (QAC) QAC not completed Oral swab not complete Additional underwriting call, exam not complete Medical records not complete

15. Top Reasons for Not Takens Not-Taken (6%) Payment not received for entire worksite case Payment not received from worksite customer, changes mind

16. New DCN and Persistency Reports are published on the 25th of each month. Agent training only. Not for sales use. LNL2280 0313

17. How is DCN calculated? Declined Premium Submitted Premium Cancelled Premium Not Taken Premium

18. Example of 8% DCN $0 Declines $10,000 Submitted Premium $300 Cancels $500 Not Takens

19. Example: Calculating Individual DCN $4,000 $4,000 $4,000 Reports Published Submitted Business $100 $350 $350 $200 Declined, Cancelled, Not Taken Premium DCN Calculated

20. Example: Calculating Payroll Deduction DCN $4,000 $4,000 $4,000 Reports Published Submitted Business $0 $0 $400 $0 $0 $600 Declined, Cancelled, Not Taken Premium DCN Calculated

21. Definitions Persistency: Premium issued and paid four months or longer, divided by total issued business based on policy effective date

22. Example: Calculating Persistency $5,000 $5,000 $5,000 3 2 1 Issued Business Reports Published $12,000 Paid 4 months or greater Persistency Calculated

23. Example of 88% 4-Month Persistency $8,800 Paid 4 Months $10,000 Issued Premium

24. Example: Calculating 13-month persistency $4000 $4000 $4000 $9,000 Issued Business Paid 13 months

25. Example of 75% 13-Month Persistency $9,000 Paid 13 Months $12,000 Issued Premium

26. How does Quality impact pay & retention? • Chargebacks

27. How does Quality impact pay & retention? • Chargebacks • Direct pay submit advance commissions

28. How does Quality impact pay & retention? • Chargebacks • Direct pay submit advance commissions

29. Manager example • 6 Agents on team • 4 Agents on DCN, 2 on Persistency • Agent 1: DCN 10 (Maximum direct pay) • Agent 2: DCN 18 (Direct Pay reduced 10%) • Agent 3: DCN 22 (Direct Pay reduced 30%) • Agent 4: DCN 31 (No direct pay) • Agent 5: Persistency 79 (Direct pay reduced 10%) • Agent 6: Persistency 72 (No direct pay)

30. How does Quality impact pay & retention? • Chargebacks • Direct pay submit advance commissions • DCN+Lapses subtracted from gross submit for bonus

31. How does Quality impact pay & retention? • Chargebacks • Direct pay submit advance commissions • DCN+Lapses subtracted from gross submit for bonus • DCN: Bonus multiplier first 7 months

32. How does Quality impact pay & retention? • Chargebacks • Direct pay submit advance commissions • DCN+Lapses subtracted from gross submit for bonus • DCN: Bonus multiplier first 7 months • Persistency: Bonus multiplier month 8 and beyond

33. How does Quality impact pay & retention? • Last but certainly not least… Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals Renewals RenewalsRenewalsRenewalsRenewalsRenewalsRenewals RenewalsRenewalsRenewalsRenewals

34. Oh by the way … Career Track

35. So how does that translate to dollars? Agent training only. Not for sales use. LNL2280 0313

36. What does an 8 vs. 18 DCN mean to an Agent in his first seven months with a $1,400 per week average? Agent training only. Not for sales use. LNL2280 0313

37. Take Home Pay 8 DCN Agent takes home $8,400 more Agent training only. Not for sales use. LNL2280 0313

38. So when is a good time to train on Quality? Agent training only. Not for sales use. LNL2280 0313

39. So when is a good time to train on quality? • Orientation • Ongoing classroom training – • New Agents & Agents/Managers DCN above co. avg • Use this powerpoint • First sale • First DCN report

40. Individual Business A-250 Application Agent training only. Not for sales use. LNL2280 0313

41. Top Reasons for Cancels Cancellations (3%) Non Sufficient Funds/Bad Bank Information Outdated COD Requested by customer (QAC) QAC not completed Oral swab not complete Additional underwriting call, exam not complete Medical records not complete

42. Agent’s Instruction Guide Review the key points in the Agent’s Instruction Guide: Save it to the desktop of the Agent’s computer when the Laptop Sales Presentation is installed.

43. Automatic Decline Conditions • Applicants with the following conditions will be automatically declined: • Terminal Illness • Lou Gehrig’s Disease or Amyotrophic Lateral Sclerosis (ALS) • HIV / AIDS or Positive Test to Antibodies for AIDS virus • Alzheimer’s Disease or Senile Dementia • Confined to a hospital or nursing facility • Use of illegal drugs (except marijuana) within a two-year period • Confined to jail

44. Underwriting Requirements Chart When is the Agent required to get an Oral Swab?

45. Oral Swab Kits • No excuse for not getting an Oral Swab: • Review Oral Swab Training Video onwww.libertynational.comAgent Services • Mail kits immediately. Heat can destroy sample.

46. Underwriting Requirements Chart

47. Build Charts If the proposed insured does not fall within the standard weight limits shown on the chart, the proposed insured will be rated. (Charts CI/GTL/CLP).

48. Medical History Guide Lists conditions and “general” guidelines

49. ALX Only • Do not submit an application for standard issue for the following conditions. • An ALX will be considered if the underwriters determine the proposed insured is eligible for coverage. • Heart / Circulatory / Blood Disorders • Diabetes and Related Disorders • Cancers • Misc. Medical Disorders • Disability • Height/Weight • Habits

50. Quality During the Presentation: Setting Correct Expectations TMK1536 092910 Agent training only. Not for sales use.