FREEDOM 1. Smart Saver Flexible Premium Deferred Annuity Underwritten by USA Life One. Agent Product Brochure. For Agent Use Only

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1 Underwritten by USA Life One Agent Prduct Brchure Fr Agent Use Only

2 Here is what we knw thus far: We knw that annuities have surrender perids. The average annuity surrender perid is smewhere between five and ten years. Mst clients see that as a negative. We als knw that many guaranteed term annuities have a market value adjustment. Explaining a market value adjustment t a prspective client certainly a negative. We knw that there are annuities that have a seemingly shrt surrender perid; but in reality, it s nly a thirty day windw t take actin r be stuck fr several mre years. Anther negative. We knw there s been sme really big insurance cmpanies with seemingly rck slid ratings nly t have unidentified underlying investments crash and burn. A really big negative. All these negatives alng with a stubbrn interest rate market are sme f the prblems agents have been telling us abut withut much ut there t address the market needs. And that s just the annuity side. On the bank side f the cin we knw clients dn t like getting a taxable interest statement every year r lsing mst f the interest gained t early withdrawal penalties r mnthly service charges. Then there s getting lcked int a lw interest rate fr five years. On the agent side f the cin there are issues with getting paid a cmmissin n the business and then getting a charge back thrugh n fault f the agent. Seems an impssible knundrum... MARKET RISK...Will the market drag me dwn? LIQUIDITY RISK... Have I lst access t my mney? INFLATION RISK... Des my mney buy less? REGULATORY RISK... taxes r new taxes cming? BUSINESS RISK... Bad Management a la Enrn, MCI ARE THERE RISK-FREE ALTERNATIVES? - NO, nt even the gvernment is entirely risk free. A GAME OF RISK. DEGREES OF UNCERTAINTY ARE YOU WILLING TO GAMBLE YOUR CLIENTS NEST EGG? WHAT CAN I DO FOR MY CLIENTS THAT LETS ME SLEEP AT NIGHT? AND OH YEA, THAT DOESN T REQUIRE A Ph.D. IN MATH & ECONOMICS TO EXPLAIN? What if. A cmpany designed an annuity prduct that was actually engineered with the specific intent f prviding clients an alternative t a bank s mney market savings, interest checking, and passbk accunts? Then prviding that alternative withut all the perceived negatives that usually plague annuities. And what abut thse wh are cnsidering a three r five year Certificate f Depsit?. Is it wrth picking up a few extra basis pints f yield and end up taking n the real risk f missing ut n the next interest rate cycle; which will prbably be up, nt dwn. USA life One Insurance Cmpany f Indiana has been quietly studying the annuity marketplace fr the last few years, talking t agents and uncvering the perceived negatives and identifying marketplace slutins.

3 A USA LIFE ONE Annuity can be part f a cnservative wealth management financial strategy. With USA Life One, yur clients can really see their interests placed first! Squeezing the majrity f a client s retirement nest egg int ne prverbial lng term annuity egg basket has never been a gd idea; and nw, with standardized suitability requirements fr annuities, it will get yu in ht water. Yu ve identified lnger term allcatins but nthing fr the shrt run. Many f yur clients already have parts f their retirement stuck in bank mney market depsits, passbk savings, and interest checking and yu ve ignred it because up until this pint there hasn t been any gd ptins. A whle new market, driven by unfreseen circumstances the last five years, is pening up in frnt us. Agents - Meet the Shrt Term Annuity Market and the slutin: The Freedm 1. It is the Cmpany s intent t manage this prduct very much like a Bank wuld manage their mney market and interest checking accunts. Banks invest in very shrt term debt instruments and/r variable rate lans that are tied t the Natinal Prime Rate r sme ther market benchmark that re-sets every 90 days r s. If interest rates are rising, shrt term debt instruments mature and are reinvested at higher rates, and variable rate lans re-set at higher rates as well. As the Bank s spread increases, they nrmally pass that n t the cnsumer in the frm f a higher depsit rate. And f curse, the reverse is true if interest rates are heading dwn. Our prduct will be based n this cncept. Wh is the ideal client fr this prduct? Any f yur existing clients r new prspective clients wh are leaving parts f their nest egg in their lcal bank. Prduct Target Market: Initially Indiana and Illinis Our research indicates there are trillins f dllars parked in Bank - Interest Checking accunts, Mney Market Savings accunts, and traditinal Passbk Savings accunts acrss the Natin. THIS IS OUR PRODUCT S TARGET MARKET Our research further indicates the insurance Industry has yet t design an annuity prduct that taps int this very significant surce f ptential premium depsits. The vast majrity f annuity prducts being ffered tday have five (at a minimum) t ten years f hefty surrender charges alng with Market Value Adjustment prvisins; these structures simply cannt cmpete with a Bank s liquid depsit base. We culd nly find a few cmmercial cmpanies ffering a three year surrender charge prduct in ur research universe, but the magnitude f the surrender charges alng with the MVA prvisins are a real detriment t serving this market segment, and even the three year duratin f the surrender charges are a real hurdle. Lking at the tp 25% f the highest interest rates paid n Mney Market Savings accunts in the Cuntry, the average cmpunded yield is.67% (and it s fully taxable). Traditinal Passbk Savings accunts pay even less. With respect t Interest Checking accunts, the average cmpunded yield is.22% fr Indiana and.16% fr Illinis (Again, fully taxable). The vast majrity f Bank prduct fferings have an array f minimum accunt balance requirements and related mnthly service fees which ften reduce the cmpunded yields significantly and ften t zer r less. Althugh Bank prduct fferings are transactin accunts (check writing capabilities), we believe there is a significant percentage f accunts that keep mre than they need t cver day-t-day and mnth-t-mnth living expenses. Many keep excess funds fr that rainy day, r they may be cntinuing t ride the lw interest rate cycle ut which has prven t be very stubbrn and prtracted. There are very few, if any, attractive fixed incme alternatives tday if risk is at all imprtant t yur clients. Many are string their cash cmpnent requirements fr an allcated retirement prtfli, and there are thse flks that simply dn t knw what else t d with it. The prduct we have designed attempts t capture the pprtunities the current rate cycle is ffering, the typical savings habits f Middle America, and the tax status difference between annuities and Bank prducts. T that end, please see the attached Prduct Prfile.

4 PRODUCT PROFILE Type f Premium: Issue Ages: Minimum Premium: Maximum Premium: Current Interest Rate: Minimum Guarantee: Payut Optin: Cash Surrender Value: Flexible Premium 1-85 Nn-qualified & Rth IRAs; 1-68 qualified. $7,500 Qualified r Nn-qualified. Hme Office apprval required n $100,000 r mre. 1% initial ffering rate. 100% f premium, less withdrawals, credited at.25% interest annually. (less applicable surrender sharges) N annuitizatin r payuts required. There will be n surrender charges after 12 mnths and never any market value adjustment (MVA). The cmpany has n time frame requirement fr the client t prvide ntice t cntinue r surrender the cntract. The cntract will cntinue indefinitely at the cmpany s prevailing interest rate. The accumulatin value minus a 2% surrender charge in year 1 nly. Lans: Withdrawal Prvisin: Death Benefit: Rate Lck: Annuitizatin: RMD: Agent Cmpensatin: Nne. Beginning immediately, 5% f premium paid is available each cntract year The withdrawal must be at least $100; and the withdrawal cannt reduce the remaining Accumulated Value t less than $1,000 unless a full surrender is taken. Any accunt value belw $1,000 will be deemed a full surrender. Full accumulatin value paid t the beneficiary in a lump sum r annuity payments (available t cntracts in deferral). Annuitized cntracts as determined by beneficiary designatin and payut term. Nt Applicable. Available at 5 t 30 years. N life ptins. Available. Beneficial IRAs accepted n this prduct. Agents will share in the prfitability in the segment s perfrmance. See Agent Cmpensatin Sheet. Surrender Charges: Year 1: 2.00%; year 2 and beynd 0.00%. Crediting Methd: Fees: Credited and cmpunded mnthly. N up-frnt fees r sales charges ever.

5 Agent Prfit Sharing Cmpensatin Sheet Given the nature f the prduct (surrender charge free after 12 mnths and n market value adjustments abslutely n cnstraints n plicyhlder surrenders just like a bank savings accunt), a traditinally paid cmmissin rate des nt make ecnmic sense fr the cmpany unless the rate was very lw. N cmpany in their right mind culd d this. Our slutin is simple; let s give the agents an pprtunity t participate in the prfits f the segment s perfrmance. If the prduct is successful, the agent will be successful as well. In a nutshell, here s hw it wrks: 58% f the segments net incme will be paid as earned (quarterly) fr three years. N charge-backs. -At the end f each calendar quarter, we will prepare a Statutry Incme Statement fr this segments plices that are in their first three plicy years. -We will payut 58% f the Segments pre-tax statutry prfits t the agents. -An agent s share f the ttal payut will simply be: *the average f the first day f the quarter s reserve value fr his plices and the last day f the quarters reserve value fr his plices, *divided by the ttal Segment s average reserve balance (thse that are in their first three plicy years) fr the same perid, *times the ttal Segment payut (again, fr thse plicies that are in their first three plicy years). Please see the hypthetical example enclsed with this brchure fr further understanding f the calculatins.

6 Agent Prfit Sharing Cmpensatin Sheet CHARGE-BACK FREE COMPENSATION: A TWO SCENARIO EXAMPLE Charge-back Free Cmpensatin with a 0% Lapse Rate Charge-back Free Cmpensatin with a 30% Lapse Rate Typical Incme Stmt: Typical Incme Stmt: Plicies In-Frce Plicies In-Frce REVENUES: REVENUES: Plicy Years 1 ~ 3 Year 1 Year 2 Year 3 Plicy Years 1 ~ 3 Year 1 Year 2 Year 3 Premium Incme $300,000 $0 $0 Premium Incme $300,000 $0 $0 Interest Incme: $6,436 $6,532 $6,616 Interest Incme: $4,520 $4,577 $3,254 Ttal Revenue: $306,436 $6,532 $6,616 Ttal Revenue: $304,520 $4,577 $3,254 EXPENSES EXPENSES Reserves: Dep. & Releases. Reserves-Interest Expenses Surrenders: net f SC s Cash Reserve Expense: $300,000 $0 $0 $3,000 $3,030 $3,060 $0 $0 $0 $645 $651 $658 Agent Cmp Rate 3 Year Ttal 1.65% Reserves: Dep. & Releases. Reserves-Interest Expenses Surrenders: net f SC s Cash Reserve Expense: $300,000 -$64,266 -$45,436 -$87,900 $2,121 $1,500 $89,082 $64,266 $45,436 $645 $456 $322 Operating Csts: $27 $14 $15 Operating Csts: $25 $9 $6 Ttal Expenses: $303,672 $3,696 $3,733 Net Gain befre Taxes & Security Gains r (Lsses) $2,763 $2,836 $2,883 Ttal Expenses: $301,852 $2,586 $1,828 Net Gain befre Taxes & Security Gains r (Lsses) $2,668 $1,992 $1,426 Sec Gains (Lsses): $0 $0 $0 Sec. Gains (Lsses): $0 $0 $0 Net Incme Befre Taxes $2,763 $2,836 $2,883 Agent Prfit Sharing Payut Rate 58% 58% 58% Net Incme Befre Taxes $2,668 $1,992 $1,426 Agent Prfit Sharing Payut Rate 58% 58% 58% Agent cmp: $1,612 $1,655 $1,681 Agent Cmp: $1,556 $1,162 $832 Agent Cmp Rate 3 Year Ttal 1.18%

7 Fr Agent purpses nly. Nt t be used fr cnsumer slicitatin. Annuities are nt depsits f r guaranteed by any bank and are nt insured by the FDIC r any ther agency f the US. All guarantees are subject t the financial strength f USA Life One. Withdrawals taken during the Surrender Charge Perid abve the penalty-free amunt will be subject t Surrender Charges. Penalty-free withdrawals are available after year ne. Withdrawals prir t age 59 1/2 may be subject t IRS penalties. Fixed annuities are nt a direct investment in the stck market r indices. They are insurance prducts that prvide grwth ptential withut experiencing lss f premium frm market lss r fluctuatin in the market and may nt be apprpriate fr all clients. Under current law, annuities grw tax deferred. An annuity is nt required fr tax deferral in qualified plans. Annuities may be subject t taxatin during the incme r withdrawal phase. Please nte that neither USA Life One, nr any agents acting n its behalf, shuld be viewed as prviding legal, tax r investment advice. USA LIFE ONE Indianaplis, Indiana