InsuranceIQ Bank & Trust. Prepared for: Gregory & Patricia Toppins Insurance Trust Dated 3/15/2007. Policy Owner: InsuranceIQ#:

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1 Date Completed: 3/22/2013 Prepared for: InsuranceIQ Bank & Trust Policy Owner: InsuranceIQ#:

2 Prepared for: InsuranceIQ Bank & Trust Branch Code: West 1st Street External Trustee(s): Trustee: InsuranceIQ Bank & Trust Insured(s): Gregory A Toppins Patricia G Toppins Next Review Date: 2/25/2014 Insurance Carrier: John Hancock Service Center Phone: (555) Carrier Provided Agent of Record Agent Name: Samantha R Miller Agent Phone #: (414) Client Provided Agent of Record Agent Name: Samantha R Miller Agent Phone #: (414) Date Completed: 3/22/ Policy Grade F (Poor) 2 Carrier Grade A (Excellent) Variances 5 Maintenance Items 4 Action Items 2 Page 2 of 11

3 3 Carrier Name: John Hancock Independent Rating Services - as of 3/1/2013 AM Best A+ (2 of 17) Standard & Poor's AA- (4 of 25) Moody's A1 (5 of 22) Fitch AA- (4 of 22) Weiss B (5 of 17) 4 VitalSigns Comdex Rating 94 (out of 100) Admitted Assets (000) $218,286,672 AM Best Asset Ranking 4 Total Invested Assets (000) $92,581,227 Invested in Bonds % Invested in Highest Quality Bonds % Invested in Real Estate 4.09 % Invested in Mortgages % Invested in Problem Mortgages 0.08 % Net Yield on Mean Invested Assets (5 Yr Avg) 5.64 % Year Average Lapse Ratio 6.62 % Page 3 of 11

4 Insured Name DOB DOD Gender Issue Age Current Age Projected Life 7 Expectancy Gregory A Toppins 8/25/1957 M Patricia G Toppins 4/1/1955 F Variance Insured Underwriting Gregory A Toppins Patricia G Toppins Underwriting Risk Class n-tobacco n-tobacco Extra Ratings Policy Owner Name % Trust Acct # Fed Tax ID Variance Gregory & Patricia Toppins Insurance Trust Dated 3/15/ % Policy Beneficiary % Variance % Details Name Is Policy Assigned? Is Policy Subject to a Split Dollar Agreement? Policy Type Survivorship Whole Life Carrier Plan Name Survivorship Whole Life Issue Date 2/25/1997 Effective Date 2/25/1997 Maturity Age 100 Maturity Age Based on Youngest Insured Maturity Date Riders & Supplemental Benefits Waiver of Premium Page 4 of 11

5 Outstanding Loan Balance $59, Percent of Gross Cash Value Collateralized by Outstanding Loan % Continuation of Coverage after Maturity? 8 Is Policy Paid Up? Scheduled Premium $6, Current Premium $6, Out of Pocket Outlay $0.00 Remainder Paid By Automatic Premium Loan Premium Mode Annual Premium Duration Through Year 61 Last Premium Paid Date 2/21/2006 Last Out of Pocket Amount $6, Grace Period 61 Are Out of Pocket Premiums to be Suspended or Discontinued? Yes - Year 10 Was there a 1035 Exchange? Modified Endowment Contract Participating Policy? Dividend Option Yes Paid Up Additions Page 5 of 11

6 Values Shown as of: 2/25/2013 Death Benefit Base Death Benefit $500, Term Riders $474, Death Benefit of Paid Up Additions $25, Death Benefit of Other Dividends $0.00 Gross Death Benefit $1,000, Net Death Benefit $939, Cash Value Cash Value $127, Riders Cash Value $10, Dividend Surrender Value $0.00 Other Dividends or Credits $ Total Gross Cash Value $138, Outstanding Loan Balance $59, Accrued Loan Interest $ Surrender Charges $0.00 Other Market Value Adjustments $0.00 Cash Surrender Value $77, Other Total Deductions for Year $0.00 Annual Dividend Credited to Policy $2, Available Loan Value $77, Policy Loan Interest Rate 8.00 % Loan Interest Type Fixed Tax Cost Basis $67, Taxable Gain Upon Surrender $0.00 Page 6 of 11

7 As Sold Baseline Guaranteed Current Illustration Dated 02/25/ /09/ /26/2013 Annualized Premium $6, $6, $6, Premium Duration Through Year 61 Through Year 61 Through Year 61 How are Premiums Paid? Out of Pocket Automatic Premium Loan Automatic Premium Loan In evaluating the ongoing performance of the life insurance policy, it is helpful to compare the current policy performance against the original as sold illustration and the initial baseline created by InsuranceIQ. The chart and graphs on this page provide a comparison of how the policy is performing compared to the as sold (if provided) and the baseline review. The illustrations used are based on assumptions at the time the illustration was run and are for information purposes only. Illustration Comparative Charts Page 7 of 11

8 Maturity Values Is There a Policy Loan at Maturity? Do Out of Pocket Premiums Need to be Resumed? Do Out of Pocket Premiums Need to be Increased? Is the Policy Projected to Lapse Prior to Maturity? Yes Yes - Policy Year 29 Yes Yes - Policy Year 29 Life Expectancy Insured Name Gender Current Age Projected Life Expectancy 7 Gregory A Toppins M Patricia G Toppins F Joint Life Expectancy Policy Projections Policy Year PROJECTIONS Net Cash Value Loan Net Death Benefit Current 17 $77, $59, $939, Life Expectancy 44 $10, $382, $229, Year Illustration Ends 61 $10, $462, $51, Age $10, $462, $51, Maturity 61 $10, $462, $51, Page 8 of 11

9 Variances Client Provided Carrier Provided Policy Beneficiary Name Gregory & Patricia Toppins Insurance Trust Dated 3/15/2007 (100 %) Estate of Gregory Toppins (100 %) Split Dollar N/P Is Policy Currently Assigned N/P Are Out of Pocket Premiums to be Suspended or Discontinued? Yes Suspension/Discontinuation Policy Year Survivorship policy. tify carrier upon the death of the first insured. 2. Policy has a Disability Waiver of Premium rider. Contact insured to verify he / she has not become totally disabled as defined within the policy. If he / she has become totally disabled, notify carrier and file claim for benefits. 3. Explore reason policy has loan. If due to automatic premium loans and policy is a participating plan, review file to determine if carrier was ever advised that the policy's dividends and/or paid up additions were to be used to pay future premiums or if policy was sold using a suspended premium concept. If yes, notify carrier of situation and request retro-active correction. Contact Grantor and request additional funds to pay loan in full or in part. If Grantor is unwilling or unable to comply with your request, consider the following: (1) Surrender paid up additions - if participating plan. (2) Explore if there are other options for liquidating the loan balance, including replacing the existing policy with another. (3) Surrender policy for its cash surrender value. (4) Exercise one of the policy's non-forfeiture options. 4. Caution: This policy has an outstanding loan balance. If the loan interest is not paid each year, it is added to the loan balance and compounds. If the loan balance should exceed the cash value, a "surrender squeeze," or forced surrender or lapse of the policy, may occur and may result in an unintended taxable event for the trust. Please consult a tax advisor on this subject. 1. Premiums are currently being paid with automatic premium loans. Consider if there are other options for paying premiums (i.e., dividends, surrender of paid up additions, additional premium payments from Grantor, etc.) 2. ALERT Resumption of out of pocket premiums has been determined to continue coverage to maturity. Contact Grantor and request a resumption in the funds being gifted to allow the policy to be continued to policy maturity. See the Report Profile for additional information on premium required to sustain the policy. If the Grantor is unable or unwilling to resume premium payments, consider all other options available after completing a suitability questionnaire and/or meeting directly with the Grantor and/or Trust Beneficiaries. Reduction in the amount of coverage or policy replacement may be viable options. Exercising one of the policy s n-forfeiture Op ons may be an op on. If the policy has a supplemental term rider or benefit, consider termina ng the rider or reduce the amount of coverage provided, if possible. If the policy is a par cipa ng plan, evaluate how dividends are being used and if the best op on has been selected. Page 9 of 11

10 This policy is being rated F-Poor based on the following assumptions: 1) Current Dividend Scale 2) current premiums being paid out of pocket 3) Premiums paid by automatic premium loans 4) Loan interest accumulating 5) Premiums will need to resume and increase to keep policy from lapsing This policy relies on a term rider for part of its coverage. Coverage under the term rider is provided through a combination of paid-up additions and term life insurance, purchased with dividends. As the amount of paid-up additions increases, the amount of term life insurance decreases. If the dividends are insufficient to pay the term premium, the balance due must be paid or the amount of coverage will be reduced. Please review policy for specific details regarding this benefit. As a whole life plan, this policy is designed to endow at maturity. However, if policy has a loan against it at maturity, the amount paid out will be reduced by the outstanding loan balance. 1. The IIQ Policy Grade that is provided by this report is determined by a proprietary methodology that takes into consideration many aspects of the policy and considers the overall health of the policy and how it is projected to perform in relationship to standard life expectancy, Age 100 and policy maturity age. Other factors considered are outstanding policy loans and how those loans will affect the policy to maturity, how term riders will affect the performance of the policy, does the policy have -lapse guarantees and/or does the policy allow for extended maturity? Please contact InsuranceIQ if you have questions about the IIQ Policy Grade provided. 2. The IIQ Carrier Grade is developed based on combining the various carrier rating services, the Comdex ranking and the admitted assets of the carrier to create a unique Carrier Grade within the IIQ system. Please contact InsuranceIQ if you have questions about the IIQ Carrier Grade. 3. Carrier Profile information is provided by VitalSigns and AM Best Insurance Reports. 4. The Comdex is a composite index using VitalSigns proprietary methodology. For additional information, please visit VitalSigns ebsite at 5. Net Yield on Mean Invested Assets is the net investment income expressed as a percent of mean cash and invested assets plus accrued investment income minus borrowed money. 6. Lapse Ratio is the percentage of ordinary life policies that lapsed during the year. 7. Based on the 2001 Commissioners Standard Ordinary Mortality Table and is for the general public at large. It does not take into consideration the insured s family history, medical condition, lifestyle or other factors affecting the individual s life expectancy. 8. Many policies provide additional protection against the possibility of outliving the policy by providing extended maturity provisions. The requirements for continuing coverage under these provisions vary by carrier as does the amount of coverage that can be continues. Review the policy for exact provisions that may be available. Page 10 of 11

11 Overview InsuranceIQ is a division of Informa Investment Solutions and specializes in the review and monitoring of individual life insurance policies. A full range of services are provided by a team of caring, dedicated and experienced professionals with over 100 combined years of life insurance industry experience. Life insurance policies can be considered a unique asset that requires special care in managing the risk associated with it. InsuranceIQ provides advisory and risk analysis services only and does not engage in the sale of life insurance or endorse any particular life insurance carrier. Suitability The IIQ Policy Review is not designed to provide a needs based analysis or to determine the suitability of specific insurance plans, coverage, or coverage levels for the trust. Numerous factors must be considered by the owner/trustee in assessing the suitability of a particular policy. These include, but are not limited to the competitiveness of the existing policy, the insured s health, the owners risk tolerance level, financial condition, ability to maintain the policy as originally established and/or revised, as well as intended purpose of the policy. Policy Features The following is a general discussion of the base life insurance policy. You are encouraged to review the actual policy for specific information regarding this policy, its design, functionality, provisions and terms and conditions of coverage. In general, a participating whole life policy is a permanent plan of insurance with contractually established premiums and a contractually specified amount of coverage. On many plans, the policy provides the policy owner with few options and little or no flexibility. With the exception of adjustable life plans, to change the amount of coverage provided by the policy, it is oftentimes necessary to purchase a new policy to replace the existing one. Some carriers will allow the addition of term life insurance riders to increase coverage. Adjustable life plans provide the policy owner with more flexibility as to the amount of coverage and premiums on the policy. Dividends on participating plans may also be used to increase coverage through the purchase of paid up additions or one year term insurance. Premiums on participating whole life policies must be paid for the life of the insured or, in the case of a limited payment plan, for the duration specified in the policy. If the policy owner is not able or is unwilling to continue paying the premiums out of pocket, it may be possible to have premiums paid by or reduced with current dividends and/or the surrender of paid up addition cash values. If premiums are suspended, it may be necessary to resume the out of pocket payment of premiums should the policy have insufficient paid up addition cash values or dividends to pay the premium due. Another option is to take a loan against the policy. However, the decision to take a loan on a life insurance policy should be made carefully as interest is charged on the loan balance, and if unpaid, compounds. Eventually, if the outstanding loan balance exceeds the policy's cash value, a forced lapse or surrender squeeze may occur along with a potential taxable event. As a permanent plan of insurance, whole life policies develop a cash value and are oftentimes designed to endow at maturity. The term "endow" refers to the gross cash value of the base whole life policy equaling the specified amount of coverage provided by the base policy at maturity. Additional cash values may be developed through the selected dividend option. However, dividends are not guaranteed. Maturity is the contractually specified maximum age of the primary insured at which coverage will be provided under the policy. If the insured remains alive at maturity, the net cash surrender value is oftentimes paid to the policy owner. If a policy has an outstanding loan, the amount payable at maturity may be less than the face value of the policy. Because whole life policies are oftentimes fixed premium plans, it is usually not possible to pay additional premiums to develop additional cash values. The cash value of the base policy is established contractually. Exceptions to this general rule include adjustable whole life policies. Disclaimer InsuranceIQ cannot guarantee the accuracy and completeness of any of the information provided in this report as the information used in preparing this review was obtained from third parties. Hence, the accuracy of the information in this report is dependent upon information from the insurance company administering coverage for the policy under review or any other entity that provided information used for the completion of this report. Illustrations and projections of policy values are hypothetical in nature and are designed to illustrate life insurance concepts. Actual policy performance will vary due to changes in the assumptions used in preparing the illustrations. InsuranceIQ does not provided legal or tax advice. part of this report is intended to be construed as providing such advice. Page 11 of 11