L-18534C For Broker/Dealer Use Only 08/02

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2 Getting Past Today s Headlines

3 The Emotional Yield Curve Wow, am I Smart. Excitement Thrill Optimism Point of Maximum Financial Risk Euphoria Anxiety Denial Fear Temporary set back - I m m a long-term investor. Desperation Panic Are We Here? Optimism Relief How could I have been so wrong? Capitulation Despondency Hope Depression Point of Maximum Financial Opportunity

4 What Have We Learned? Bull Markets: Are born out of pessimism. Grow on skepticism. Thrive on optimism. Die in euphoria. Sir John Templeton, 1994

5 The Fed Model Implies That The S&P 500 Is Currently Undervalued By 35% Relative To Its Implied Fair Value 80% S&P500 Relative Valuation based on the Fed Model 60% Over/Under Valuation 40% 20% 0% % -40% As of July 22, 2002, S&P 500 undervalued by 35% 1 The implied fair value (IFV) of the S&P 500 is computed by comparing the 12-month forecasted consensus earnings estimate of the S&P 500 (E) from First Call to the current yield of a 10-year Treasury bond (TBY): IFV = E / TBY Source: Prudential Financial Research; CAM Strategic Planning

6 The Fed Sees An Improving Economy The Fed s Central Tendency Forecasts 2001 Actual 2002 Forecast 2003 Forecast Real Gross Domestic Product (GDP) Personal Consumption Price Index 0.5% 3.5% % 3.5% - 4% 1.3% 1.5% % 1.5% % Unemployment Rate 5.6% 5.75% - 6% 5.25% - 5.5% Above figures represent 4 th Quarter to 4 th Quarter change, except for unemployment rate, which is 4 th Quarter average. Data: Federal Reserve Board 08/02

7 Market Outlook The fundamentals are in place for a return to sustained healthy growth. Fed Chairman Alan Greenspan July 16, 2002

8 Help Build Wealth With Travelers Annuities Principal Protection Series Style Series Vintage II Travelers Index Annuity Travelers Protected Equity Portfolio Travelers Target Maturity Vintage 3 Vintage XTRA

9 Help Build Wealth With Travelers Annuities Principal Protection Series Travelers Index Annuity Travelers Protected Equity Portfolio Travelers Target Maturity

10 Principal Protection Series Travelers Index Annuity Travelers Protected Equity Portfolio Growth Potential: Principal Protection*: Maximize growth potential through exposure to the stock market in an index portfolio designed to match the performance of a broad-based portfolio, such as the S&P 500 Participate in growth potential of the market while protecting your principal *Principal protection incurs additional charges, and requires completion of the vesting period, and is only available with the Equity Index Portfolio, with Index Annuity.

11 Principal Protection Series Travelers Index Annuity Protection Feature Principal Protection* Choice of 90% or 100% Beneficiary Protection Standard: 8 Year Reset through age 85 Enhanced: 7% Annual Increase through age 80 * Principal protection fee will vary according to market conditions and will lock at time of purchase. The fee will never be higher than 2% annually. Principal protection is only available with the Equity Index Fund. Any withdrawals (including the withdrawal charge) taken prior to the end of the eight-year term will no longer be protected by the principal protection feature, and will reduce the amount protected by the principal protection feature proportionately. The proportional reduction may reduce the amount protected by the principal protection feature by greater or less than the actual amount withdrawn.

12 Principal Protection Series Travelers Protected Equity Portfolio (PEP) Protection Feature At the end of the ten-year term the contract value will be the greater of: The contract value, or; The original amount invested, less withdrawal adjustments * Principal protection fee will vary according to market conditions and will lock at time of purchase. The fee will never be higher than 2.5% annually. Any withdrawals (including the withdrawal charge) taken prior to the end of the ten-year term will no longer be protected by the principal protection feature, and will reduce the amount protected by the principal protection feature proportionately. The proportional reduction may reduce the amount protected by the principal protection feature by greater or less than the actual amount withdrawn. ** Please note Travelers Money Market Portfolio does not offer principal protection.

13 Target Clients For Travelers Index Annuity & PEP Clients Who Have Enjoyed Market Gains Lock in Gains Clients Who Fear Market Downsides More Conservative Investors Clients Who Can No Longer Risk Losses Change in Investment Profile

14 TTM A Competitive Fixed Income Alternative Guaranteed interest rate* Principal and credited interest protection Non-callable Prospecting Opportunities Alternative to CDs and Bonds Split Funding Opportunities 1035 Exchange Opportunity IRA and Qualified Money Rollovers *TTM is a modified guaranteed annuity. Withdrawals made prior to maturity will be subject to an MVA which can increase or decrease the contract value relative to current interest rates. If surrendered prior to maturity, principal is not guaranteed.

15 Split Funding: Balance Risk With Protection TTM Sample $100,000 Equity Investment $ 77,232 $ 22, % 6 Yr Rate 6 year returns Market -5% Market 0% Market + 5% $100,000 + $ 16,737 OR $ 22,768 OR $30,511 Projected Value at the end of Year 6 $ 116,737 $122,768 $ 130,511 Hypothetical 6-Year Blended Rate 2.61% 3.48% 4.54% These numbers are for illustrative purposes only and do not reflect the performance of any annuity sub-accounts or the deduction of any product or management fees. Past performance is not a guarantee of future performance.

16 Help Build Wealth With Travelers Annuities Style Series Vintage II Vintage 3 Vintage XTRA

17 TL&A Is Delivering On The Commitment Of Excellence In Variable Annuity Fund Line Up Criteria Criteria Weighting Well-Known Brands Asset Class Coverage 10 Largest Advisor Sold Brands By Assets Vs. 16 Asset Class Universe 25% 25% Overall Fund Performance Top Performance In Major Classes Each Fund vs. 3 Year Lipper Peer Group Funds In 8 Major Asset Classes That Are Lipper Top Quartile For 3 Years 25% 25% 50% Performance

18 TL&A seeks excellence in variable fund line-ups! Variable Annuity TL&A Vintage II/XTRA/3 81% Using the same methodology, our top 8 key competitors scored between 53% - 70%. We selected these products for this comparison because they are most commonly identified by our financial advisers as similar to Travelers Life & Annuity products. Evaluation System developed by Travelers Life & Annuity and outlined on the preceding slides. This system has not been examined or endorsed by any independent third party. Other valid evaluation methods can be developed and could yield different results. These slides must be accompanied by full fund evaluation presentation in hard copy form.

19 Winners Rotate Courtesy of Franklin Templeton. Past performance does not guarantee future results. Please see handout (L-18416) for more information. L-18534SB For Broker/Dealer Use Only 08/02

20 Build A Diversified Portfolio Domestic Equity - Combining Styles Large Cap Core Multi-Cap Value Multi-Cap Growth Mid Cap Core International Equity Fixed Income

21 Diversification With Vintage: Performance Checklist As of 06/30/02 Large Cap Core Fund Return Category Average Difference Smith Barney Appreciation Portfolio Outperformed 93% of funds -3.81% -9.44% 5.63% Multi Cap/Mid Cap Multi Cap Growth American Variable Growth Fund - 2 Outperformed 86% of funds -3.58% % 7.36% Multi Cap Value Franklin Mutual Shares Securities Fund - C2 Outperformed 93% of funds 4.98% -1.47% 6.45% Mid Cap Core Fidelity VIP Mid Cap Portfolio - SC 2 Outperformed 94% of funds 18.46% 4.33% 14.13% International/Global Putnam VT International Growth Fund - IB Outperformed 81% of funds -0.45% -4.72% 5.17% Fixed Income PIMCO Total Return Portfolio Outperformed 68% of funds 7.70% 6.93% 0.77% Lipper fund data for three years as of 6/30/02. Past performance is no guarantee of future results. In light of current market volatility, please feel free to call the Travelers Annuity Sales desk for the very latest performance data. Rankings shown include management fees and are provided by Lipper Inc., a leading independent variable insurance product performance analysis service. These rankings represent the insurance funding option (not the retail fund) and do not reflect contract fees and surrender charges, which, if reflected, would lower the ranking shown. Returns for other time periods are available from Lipper. Travelers variable annuities are issued by The Travelers Insurance Company or The Travelers Life and Annuity Company, One Tower Square, Hartford, CT and are offered by Travelers Distribution LLC as principal underwriter. These funds are available through a variable annuity and/or variable life insurance product, which has charges and fees that are described in the product prospectus.

22 Diversify With Vintage 3 Funds Asset Allocation Returns 5.3% 3.8% 2.6% 3-Year subaccount Performance -9.2% conservative moderate aggressive S&P 500 Conservative Moderate Aggressive Allocation Allocation Allocation Smith Barney Appreciation Portfolio -5.0% 5% 10% 15% American Variable Growth Fund % 5% 10% 15% Franklin Mutual Shares Securities Fund - C2 3.7% 5% 10% 15% Fidelity VIP Mid Cap Portfolio - SC % 5% 10% 15% Putnam VT International Growth Fund - IB -1.5% 5% 15% 20% PIMCO Total Return Portfolio 6.4% 75% 45% 20% 100% 5.3% 100% 3.8% All three models outperformed the S&P 500! Asset allocation sub-account performance based on average annual performance for three years ended 6/30/02. Performance has been weighted to defined percentages. Subaccount performance reflects all fund management fees and expenses as well as 1.30% mortality and expense risk charge. Asset allocations are recommendations only. Past performance is no guarantee of future results. Funds represent a portion of those available in Vintage 3. Other available options have different performance records. In light of current market volatility, please feel free to call the Travelers Annuity Sales desk for the very latest performance data. 100% 2.6%

23 Franklin Mutual Shares Securities Portfolio - C2 Style: Multi-Cap Value Outperformed 93% of Lipper peers for three years ended June 30, YTD Return 1 Year Return 3 Year Return 5 Year Return Franklin Mutual Shares Lipper Multi Cap Value Cat. Lipper fund data for three years as of 6/30/02. Past performance is no guarantee of future results. In light of current market volatility, please feel free to call the Travelers Annuity Sales desk for the very latest performance data. Rankings and returns shown include management fees and are provided by Lipper Inc., a leading independent variable insurance product performance analysis service. These rankings and returns represent the insurance funding option (not the retail fund) and do not reflect contract fees and surrender charges, which, if reflected, may have lowered the rankings or returns shown. Returns and rankings for other time periods are available from Lipper.

24 American Variable Growth Fund - 2 Style: Multi-Cap Growth Outperformed 86% of Lipper peers for three years ended June 30, YTD Return 1 Year Return 3 Year Return 5 Year Return American Growth Fund Lipper Multi Cap Growth Cat. Lipper fund data for three years as of 6/30/02. Past performance is no guarantee of future results. In light of current market volatility, please feel free to call the Travelers Annuity Sales desk for the very latest performance data. Rankings and returns shown include management fees and are provided by Lipper Inc., a leading independent variable insurance product performance analysis service. These rankings and returns represent the insurance funding option (not the retail fund) and do not reflect contract fees and surrender charges, which, if reflected, may have lowered the rankings or returns shown. Returns and rankings for other time periods are available L-18534C from Lipper. For Broker/Dealer Use Only 08/02

25 Fidelity VIP Mid Cap Portfolio-Service Class 2 Style: Mid-Cap Core Outperformed 94% of Lipper peers for three years ended June 30, YTD Return 1 Year Return 3 Year Return Fidelity VIP Mid Cap Lipper Mid Cap Core Cat. Lipper fund data for three years as of 6/30/02. Past performance is no guarantee of future results. In light of current market volatility, please feel free to call the Travelers Annuity Sales desk for the very latest performance data. Rankings and returns shown include management fees and are provided by Lipper Inc., a leading independent variable insurance product performance analysis service. These rankings and returns represent the insurance funding option (not the retail fund) and do not reflect contract fees and surrender charges, which, if reflected, may have lowered the rankings or returns shown. Returns and ranking for other time periods are available from Lipper.

26 Vintage Series Enhanced Stepped-up Provision Enhanced Stepped-up Provision (E.S.P.) is an earnings enhancement option, elected at purchase. It may provide up to 40%* of the investment gain capped at 200% of the investment in the contract, as an additional benefit to beneficiaries. E.S.P. Calculation: E.S.P. = 40% X lesser of: a) $40,000 or b)$200,000 E.S.P. = $40,000 X 40% = $16,000 Total Death Benefit Value: $160,000 + $ 16,000 $176,000 Death Benefit Value + E.S.P. Value = Total Death Benefit Value * 25% ages E.S.P. is not available for age 76+. Please note there must be earnings in the contract to trigger the E.S.P. benefit. This benefit is backed by the financial strength of the issuing insurance company. Assumes: Client 60 years old purchases contract with $100,000 Selected the E.S.P. rider Contract value at the time of death was $140,000 Death benefit value was $160,000 Available with Vintage II, Vintage XTRA and Vintage 3.

27 Death Benefits Count in a Down Market Contract Value at Death Death Benefit Paid Difference Product $28,252 $61, % Vintage Standard $11,491 $25, % Portfolio Architect -Select Standard $51,406 $117, % Marquis Enhanced Examples are actual Travelers Life & Annuity death claims paid in August These examples are provided to display the value of death claim benefits. Based on the product selected, market conditions and date of death, actual death claim payments will vary. The enhanced death benefit option has a higher mortality and risk expense charge.

28 Invest Strategically: Dollar Cost Averaging Vintage II, Vintage 3 and Vintage XTRA It s simple. It s automatic. It s tax-deferred. It s 100% gross commission on day 1. Special DCA- 6, 12 and 24- month durations may be available! Call the sales desk for more information and current rates. DCA rates are paid on a declining balance. For a six-month special, the interest rate earned will be approximately 25% of the rate quoted; for a 12-month special, approximately 50% of the rate quoted, and for a 24-month special, approximately 100% of the rate quoted. Dollar cost averaging does not assure profit nor protect against loss in a declining market. Since dollar cost averaging involves continuous investment regardless of fluctuating prices, investors must consider their financial ability to continue investment during periods of low price levels.

29 Consider: Vintage XTRA Vintage XTRA 5% Bonus (4% ages 70-80) Focus on your IRA Rollover clients. While your clients cannot make up for market losses, a 5% bonus will give them a boost to their retirement savings. Payment enhancements are treated as earning for distribution purposes and will be subject to market risk when invested in variable annuity. Premium enhancement annuities have higher fees and may have longer surrender charge schedule than their non-enhancement counterparts.

30 Something XTRA! An immediate reward! Offers an immediate Purchase Payment Credit (PPC) on all contributions made in the 1st contract year PPC equals Purchase Payment Credit Percentage time purchase payments Purchase Payment Credit Percentage: 5% up through age 69 4% age 70+ Purchase Payment Credit is applied to contract in same ratio as investment allocation Sample Purchase Payment Credit $100,000 with 5% Purchase Payment Credit (PPC) Investment Asset Without With Option Allocation PPC PPC Templeton Foreign 10% $10,000 $10,500 SB Large Cap Growth 25% $25,000 $26,250 SB Large Cap Value 25% $25,000 $26,250 MFS Total Return 30% $30,000 $31,500 SB Money Market 10% $10,000 $10,500 Total Investment 100% $100,000 $105,000 Purchase Payment Credit is not available (a) if the contract is returned during the free look period, (b) due to death of the owner in during 12 months following the date a PPC is applied, (c) due to termination of the contract during the 12 months following the date a PPC is applied. The values in the chart illustrate the purchase payment credit; they do not reflect the performance of any investment option available in Vintage XTRA. Bonus annuities may pose higher M&E charges and longer surrender charges than their non-bonus counterparts.

31 Asset Allocation and Rebalancing 30% Jan. 1 Apr. 1 10% 10% 20% 30% 20% 40% 40% Large Cap Stocks International Bonds 10% Mar % Small Cap Stocks 50% 25%

32 TL&A Annuity Statements Win DALBAR Communications Award In addition to being one of the 10 best variable annuity statements in 2001, Travelers Annuity Statements excel in addressing the needs that investors consider most important. The design is clear and prominently displays the value of the account and each of its holdings that answer the first questions that investors ask, What is my account worth? The Travelers Life & Annuity Variable Annuity Quarterly Statements - Non Qualified and IRA is clearly an industry leader in meeting the needs of investors.

33 With Travelers Life & Annuity, Cross-Selling Is More Profitable Profits A $1 Billion Example $52MM TL&A Citigroup Profits from Travelers Annuity Sales $14MM Distributor Non-Proprietary CAM Distributor TL&A $52 Citigroup Profits from Non-Proprietary Annuity Sales $14 L-18534SB For Broker/Dealer Use Only 08/02

34 Think Big. Does Market Volatility Have You Bumping into Trees? L-18534SB For Broker/Dealer Use Only 08/02

35 It s not about timing. It s about TIME. Sand L-18534C L-18534SB For For Broker/Dealer Broker/Dealer Use Use Only Only 08/02 08/02

36 It s not about instant results. It s about PATIENCE. L-18534SB For Broker/Dealer Use Only 08/02

37 It s about consistent investing and its overall IMPACT. Assumes a single purchase payment of $50,000, a growth rate of 8% and a 31% income tax bracket. No specific product is represented; therefore, no product charges such as the Mortality and Expense Risk Charge, the Sub-Account Administrative Charge or the Contract Administrative Charge are reflected. The inclusion of these charges would reduce the performance shown. For more information regarding specific charges on Travelers Life & Annuity products, please refer to each product s prospectus. The example is for illustration only and is not indicative of past or future performance of any investment. The illustration assumes no withdrawals. Withdrawals of taxable amounts will be subject to income tax and, if taken prior to age 59, a 10% IRS tax penalty may apply. L-18534SB For Broker/Dealer Use Only 08/02

38 Disclosures Variable annuities are issued by The Travelers Insurance Company or The Travelers Life and Annuity Company, One Tower Square, Hartford, CT, Refer to the applicable prospectus for more information about the product, including fees and charges. Products are offered by Travelers Distribution LLC as principal underwriter. Investments in a variable annuity are subject to market risk, including loss of principal. Withdrawals of taxable amounts will be subject to income tax and if taken prior to age 59 ½, a 10% IRS penalty tax may apply. The Fixed account, beneficiary protection, principal protection and the guaranteed payout options are backed by the financial strength of the issuing company.