A Company You Can Trust

A Company You Can Trust

... serving our clients for more than 100 years based upon a set of core values and a belief in what we do. Michael P. Kiley, CEO

Welcome Welcome to Security Benefit! We appreciate the opportunity to serve you as you plan, prepare and go through your retirement. The following pages will help you learn more about Security Benefit, our history, financial strength and our ability to provide you with the right retirement vehicles to help you create retirement income. As you ll see, we ve been helping our community and serving our clients for more than 100 years based upon a set of core values and a belief in what we do. This foundation of strength and service is what enables us to serve you well today and into the future. Our belief is this: If you are provided the right products, with the options you need and served by people who care, then you will benefit. This is why we are here... to provide you with solutions that lead up to, and carry you through, your retirement years. After you ve had a chance to get acquainted with Security Benefit, please ask your Financial Professional for more information about retirement options that may be a good fit for you. Sincerely, Michael P. Kiley Chief Executive Officer Security Benefit

3 helping people prepare for the future

About Security Benefit About Guggenheim Partners Since 1892, Security Benefit, a Guggenheim Partners company, has been helping people prepare for the future. Today, Security Benefit Corporation (SBC) is a diversified financial services holding company providing retirement plans, annuities, asset management and technology solutions with nearly $51 billion in assets under management and administration. 1 As a privately held corporation offering retirement and investment solutions, through independent advisors and agents, SBC serves the financial needs of customers in all 50 states. Security Benefit Life Insurance Company (SBL) provides fixed and variable annuities to approximately 200,000 policyholders and has more than $9 billion in assets. 2 In addition, SBC, through its various subsidiaries, is a top provider of retirement plan services in the K-12 education marketplace. 3 Guggenheim Partners, LLC is a privately held, global financial services firm with more than $100 billion in assets under supervision. An affiliate of Guggenheim Partners manages Security Benefit Life s general account assets of more than $4 billion. The firm s investment expertise helps us set competitive credited rates for our fixed annuity products. Security Benefit is dedicated to the preservation and growth of our clients retirement savings and to upholding the principles and integrity of Guggenheim. The Guggenheim name represents a rich tradition of innovation and success in business, philanthropy, education and investments. The Guggenheim legacy is one of the most enduring in modern global business. We d like to help you create your own legacy. 1 All financial figures as of December 31, 2010. 2 General account invested assets are $4.682 billion and separate account assets are $5.129 billion. 3 Based upon the number of participants, sold through independent registered representatives. 4

Helping Others: A Rich History of Serving Our Community Since 1892 In a small Topeka, Kansas, drugstore, Dr. H.A. Doc Warner encouraged 11 men and women to contribute $1 each to help form The Knights and Ladies of Security. The forward-thinking fraternal society was among the first to accept women as equals, provide life insurance to everyday people and focus on caring for the community. These core values served as the foundation upon which Security Benefit is built today. Later known as the Security Benefit Association, SBA continued to show its commitment to helping the community. Members donated nickels to help fund a mutual cooperative farm, a children s orphanage, a home for the elderly, a private school and a hospital. The first dormitory to accommodate children who were orphans of members was fondly called The Home That Nickels Built. During World War I and World War II, SBA offered expanded coverage to members who served in the military, despite the financial turmoil the wars caused for the organization. A Patriotic Fund was created by members to support fellow military members. After World War II, SBA evolved from a fraternal society to Security Benefit Life Insurance Company (SBL), a mutual reserve life insurance company. This rich history has shaped Security Benefit into the stable company it is today. Our forward-thinking approach has helped us transition throughout the years and become industry leaders while creating innovative products to meet the changing needs of our clients. In July 2010, Security Benefit was purchased by an investor group led by Guggenheim Partners and is now privately owned. As part of the transaction, our owners infused a significant amount of capital into SBL, thus committing themselves to Security Benefit s financial strength. This capital infusion helped us receive a significant upgrade by Standard & Poor s ratings agency in SBL s financial strength ratings, and enhanced our positive outlook for the future. Security Benefit Life s 2010 statutory equity was $615 million. This level strengthens our confidence that we can meet our obligations to our customers as we have for more than 100 years, and help them meet their retirement goals. Opposite Page: Top: The drugstore where the company began. Middle Left: Female members in the early years. Middle Right: World War I soldier members. Bottom: The Home That Nickels Built. 5

we d like to help you create your own legacy 5 6

Key Financial Statistics 2010 Statutory Revenues 1 $647 million 2010 Statutory Equity 1 $615 million 7

Strength in Our Numbers Today, SBL is once again a growth company with $9.9 billion in assets. 1 We are actively hiring, developing new products and moving into new markets with the single goal of helping customers retire on their terms. Another sign of our financial strength can be seen in SBL s solvency ratio, which was 106.61 on December 31, 2010. Solvency, a financial-strength measurement, is the ability of a corporation to meet its financial obligations, both short-term and long-term. For an insurance company, such obligations include the benefits it has agreed to pay its customers, such as the death or living benefits on annuity contracts. There are numerous ways to measure an insurer s solvency or financial strength, some objective and some subjective. Solvency ratio is one of these measures. Other measures include Return on Assets (ROA), Return on Equity (ROE), Risk-based Capital (RBC), cash flow, liquidity and diversification of investments. In addition, liabilities may fluctuate daily. We are pleased with SBL s strong solvency ratio. The A.M. Best ratings of SBL and other companies are shown in the chart on page 9. The purpose of the ratings is to reflect the financial strength of the insurer and should not be considered to have a bearing on the investment performance of assets held in any SBL separate account. Rating agencies take many factors into account when assigning a financial strength or claims-paying rating to an insurer. For a more complete understanding of the reasons for the ratings assigned to SBL by A.M. Best, please refer to the ratings assessment of SBL. Want to Know More? We encourage those interested in SBL s financial position to review our statutory financial statements on our website (securitybenefit.com). You can also receive copies of SBL s statutory and GAAP financial statements by calling us at 800.888.2461. Comparing Solvency Solvency ratios take all of an insurer s assets (both general and separate accounts) and divide that number by its total liabilities. The quality of the assets, liquidity, diversification and other factors are not included in the ratio. 1 As of December 31, 2010. General account invested assets are $4.682 billion and separate account assets are $5.129 billion. 8

Our Financial Strength Today Security Benefit as compared to those considered our peer insurance companies. A.M. Best Rating Solvency Security Benefit Life Insurance Company B++ 106.61 ING USA Annuity and Life Insurance Company A 102.41 ING Life Insurance and Annuity Company A 102.48 Aviva Life and Annuity Company A 105.45 Allianz Life Insurance Company of North America A 105.75 Horace Mann Life Insurance Company A 106.17 Variable Annuity Life Insurance Company A 106.32 Life Insurance Company of the Southwest A 106.40 Insurance companies with a rating of A have a median solvency of 105.75%. Prudential Retirement Ins & Annuity Company A+ 101.98 Great-West Life & Annuity Insurance Company A+ 102.62 Pruco Life Insurance Company A+ 102.71 MetLife Investors USA Insurance Company A+ 102.76 AXA Equitable Life Insurance Company A+ 102.88 Principal Life Insurance Company A+ 103.72 MetLife Investors Insurance Company A+ 103.97 Nationwide Life Insurance Company A+ 104.00 Lincoln National Life Insurance Company A+ 104.25 Metropolitan Life Insurance Company A+ 104.36 Jackson National Life Insurance Company A+ 104.88 Midland National Life Insurance Company A+ 106.08 Insurance companies with a rating of A+ have a median solvency of 103.84%. Sorted by solvency ratio within ratings category as of August 5, 2011, as provided by A.M. Best. Solvency ratio as provided by A.M. Best as of December 31, 2010. Looking Ahead Security Benefit is a financially sound company committed to providing our customers with financial guidance now and into the next 100 years. We are dedicated to providing financial tools and solutions for you, your children and your grandchildren. Join us and let us help guide you on your journey. 9

Security Benefit: Providing retirement solutions now and into the next 100 years.

We Are Poised for Growth Let Security Benefit help you work toward your goal of a comfortable and secure retirement. We offer a range of retirement solutions including: effective retirement-planning vehicles guaranteeing a stream of income you cannot outlive 1 access to your money when you need it 2 tax deferral products 3 These attractive features, coupled with Security Benefit s company history, solid capital position and solvency, make it a wise choice for complementing your retirement portfolio. We are poised for growth and excited about the opportunity to show our commitment to you. Ask your Financial Professional if a Security Benefit product could be right for you and let us help you navigate the future with confidence. 800.888.2461 Services are offered through and securities are distributed by Security Distributors, Inc., a subsidiary of SBL, which is wholly owned by Security Benefit Corporation ( Security Benefit ). Security Benefit is indirectly controlled by Guggenheim Partners, L.L.C. 1 Guarantees are subject to the claims-paying ability of the issuing insurance company. 2 Depending on the product, early withdrawals will be subject to a surrender charge, bonus recapture and/or market value adjustment. 3 Withdrawals before age 59 1 / 2 may be subject to a 10% IRS penalty tax. One Security Benefit Place, Topeka, KS 66636-0001 securitybenefit.com 38-10670-01 2011/07/20