Simplified Issue Whole Life. Graded Death Benefit Whole Life

Simplified Issue Whole Life and Graded Death Benefit Whole Life Agent Training Guide For agent use only Not for public distribution

Simplified Issue Whole Life (Form Series 200612A) & Graded Death Benefit Whole Life (Form Series 200613A) Description Not available in all states. Contractual provisions vary by state. Excellent product for final expense planning Affordable Simple yes/no application Buyers may qualify for Graded Death Benefit even if they are not eligible for Simplified Issue Whole Life Issue Ages (age last birthday) 50-85 Issue ages are restricted in the following states for Graded Death Benefit Whole Life: o Pennsylvania Male: Non-Smoker 50-75, Smoker 50-70 Female: Non-Smoker 50-81, Smoker 50-76 o Missouri Male: Non-Smoker 50-75, Smoker 50-75 Female: Non-Smoker 50-75, Smoker 50-75 o New Jersey Male: Non-Smoker 50-76, Smoker 50-76 Female: Non-Smoker 50-76, Smoker 50-76 Face Amounts Simplified Issue Whole Life (SIWL): $3,000-$25,000 Maximum new SIWL insurance an insured can have is $25,000 less existing insurance at Royal Neighbors that has been issued on a simplified issue basis (including Simple Solution, SPWL, Sr. Whole Life, Graded Death Benefit, and products issued through any not fully underwritten program) Graded Death Benefit Whole Life (GDB): $3,000-$10,000 Maximum new GDB insurance an insured can have is $10,000 less existing insurance at Royal Neighbors that has been issued on a simplified issue basis (including Simple Solution, SPWL, Sr. Whole Life, SIWL, and products issued through any not fully underwritten program) Owner/Membership As shown in the application Owner can be different than the insured (must have an insurable interest in the insured) Ownership can be changed by assignment The insured is the member of Royal Neighbors Premiums Premiums payable for life of insured (or until insured would reach 121 years of age based on 2001 CSO tables) Premiums can be paid by monthly,quarterly, semi-annual, or annual Pre-Authorized Collection (PAC). Premiums can also be billed on a quarterly, semi-annual, or annual basis. Free-Look Period 20 days (or longer if required by state) Underwriting Classes Male/Female (Premiums quoted for Montana SIWL applications must use male rates for both male and female applicants) Tobacco/Non-Tobacco No Substandard No Preferred Dividends Certificate is participating but no dividends are expected Death Benefit (provisions may vary by state) SIWL: Full face death benefit Face amount plus any premiums paid after the date of death; if certificate is in grace period, past due premiums through the month of death will be deducted from the face amount before payment is made; any outstanding liens (with accrued interest) and loans (with accrued interest) will also be deducted 2

GDB: Graded death benefit Death benefit limited for first two years unless death is accidental o 30% of face amount in first year o 70% of face amount in second year Death benefit is 100% if death is accidental accidental death provision not approved in Arkansas If certificate is in grace period, past due premiums through the month of death will be deducted; any outstanding liens (with accrued interest) and loans (with accrued interest) will also be deducted Certificate Fee $30 per year (commissionable) Nonforfeiture Option Participating reduced paid-up insurance Non-participating extended term insurance (default) Cash surrender Premiums in Default Insurance expires at end of grace period unless there is a cash value If there is a cash value, the following will happen: o Automatic premium loan followed by nonforfeiture option elected, or: o If automatic premium loan is not in effect, nonforfeiture option chosen by owner Reinstatement Can be reinstated within 5 years from date of non-payment of premium with evidence of insurablilty 6% interest on all past due premiums Certificate cannot be reinstated if certificate is surrendered for its cash surrender value Loans Loans are available up to the cash value 8% interest rate in arrears Automatic premium loan option is available Termination Certificate will terminate/mature the earliest of: A nonforfeiture option (CS, RPU, ETI) goes into effect (whether chosen or default because of non-payment of premium) Cash value is transferred (1035) to another product Certificate expires without value when the outstanding loan (including accrued interest) exceeds the cash value or the outstanding lien (including accrued interest) plus the outstanding loan (including accrued interest) exceed the face amount Insured dies Insured reaches age 121 Lapse due to nonpayment of premium Certificate surrendered for cash value Riders Available Accelerated Living Benefit Terminal Condition and Permanent Confinement Form series 1766 (not available in all states contractual provisions may vary by state) Rider available age 50-85 Must be elected at time of application No additional premium for rider (in states where rider is approved) Qualifying Events: o When the Insured has been continuously confined to a nursing home for 90 days and the physician-certified confinement is expected to be permanent; o When the Insured is diagnosed by a physician as having a terminal condition and has a life expectancy of 12 months or less Up to 75% of eligible death benefit can be accelerated (minimum $5,000, maximum in aggregate of all certificates of $250,000) as a single payment An accelerated benefit payment is subject to an administrative fee and interest; review the rider, form 1766 (with state variations), for complete information and provisions 3

Underwriting Process and Guidelines The underwriting process is conducted via telephone interview by MRS, our underwriting business partner, for our SIWL and GDB products. After you have pre-qualified your prospective client, two telephone interview options are available to meet the needs of your business: 1) Interview Now or 2) Interview Later. You can initiate a telephone interview now at point-of-sale to determine if your client is approved immediately. Alternatively, you can complete and submit an application which will require a telephone interview later. Follow these steps to ensure a smooth underwriting process: STEP 1 Pre-qualify your client, the Proposed Insured All applications, regardless of conducting an interview now or later, must be pre-qualified. 1. Verify identity by viewing a photo ID such as the current driver s license, state ID card, or passport. 2. Individuals not eligible to apply for Simplified Issue Whole Life (SIWL) and Graded Death Benefit Whole Life (GDB) products: Anyone without a Social Security number Anyone who is not a US Citizen or current Green Card holder Mentally incompetent, or otherwise unable to make a valid contract. Anyone who refuses or is unable to complete a telephone interview (Interpreter and TTY services are available) Anyone previously declined for another Royal Neighbors product 3. Review Section 2 questions on application Has client used tobacco in the past 12 months? If yes, make sure to quote tobacco rates. SIWL questions 2-9 in Part 2 of the application must be no. If the answer to any of questions 2-9 is yes, the client is not eligible for coverage. GDB questions 2-7 in Part 2 must be no. Questions 8 and/or 9 can be yes. 4. Premium Guidelines: Applicants who cannot afford insurance are not eligible to apply Determine the desired face amount and premium, and ensure the premium is less than 10% of your client s total income 5. Review all medications and consult the medication list on page 8 in this guide for any that would result in an automatic decline. If the proposed insured has been prescribed any of the automatic decline medications, she/he is not eligible for the product, regardless of how tthe health questions were answered. If you have any questions regarding medications, or any of the items in the pre-qualification checklist above, please call Underwriting at (866) 733-9758, Option 1. If the client meets the pre-qualification requirements: Fully complete the application (see page 6 for details) Make sure the client signs and dates the authorization on page 3 Provide the MIB Notice to the proposed insured STEP 2 Determine Interview NOW or Interview LATER To determine whether to conduct an interview now or later, you need to consider the following: Interview NOW: You need business to be completed with a single visit You can conduct the call during MRS business hours (8 a.m. to 9 p.m. Central Time, Monday through Friday; 8 a.m. to 2 p.m. Central Time, on Saturday) You need an immediate decision at the point-of-sale (calls take on average 10 minutes) Interview LATER: You do not need to receive an immediate decision at the pointof-sale You need flexibility in scheduling You need to visit the client outside MRS business hours If you determine the need to conduct the interview NOW, proceed to Step 3. If you determine the need to conduct the interview LATER, proceed to Step 4. 4

STEP 3 Conduct the Interview NOW Call (866) 281-9228 for the interview. Interviewers are available: 8 a.m. to 9 p.m. Central Time, Monday through Friday 8 a.m. to 2 p.m. Central Time, Saturday If you have a non-english speaking applicant, please inform the interviewer. Family members may not act as an interpreter What the agent can expect during the interview The interviewer will: 1. Ask your name and agent number 2. Ask you the proposed insured s identification information, face amount and premium, payment date and billing mode, and tobacco status 3. Ask you to put the applicant on the phone What the client can expect: The interviewer will: 1. Inform your client that the call is being recorded 2. Verify with your client her/his name, address, Social Security number, and date of birth. The interviewer will verify that the premium and payment date information have been provided to the applicant 3. Obtain verbal authorization for obtaining the MIB Report and other information 4. Ask your client the medical questions on page two of the application 5. Review the Prescription Profile and MIB Report; additional questions may be asked based on these findings The interviewer will complete the call with your client and ask them to hand the phone back to you. The interviewer will provide you with: The medical underwriting decision The 12-digit certificate number. This number MUST be written legibly at the top of page one of the application, on the premium check, and any additional forms you need to submit. Omitting this number may delay processing. Upon receipt of your application, Royal Neighbors will complete the final review of all information. Proceed to Step 4 STEP 4 Submit the Application Regardless of whether the underwriting decision is approved or declined, you will still need to submit the application to Royal Neighbors. The application form must be fully completed and signed by all parties including owner and payor if different from the insured. You may fax the completed application as well as any other supporting documents such as replacement and PAC forms, to (866) 787-1450. If you fax the application and other documents, do not mail the originals. The initial premium payment must be received within 5 business days from the date you fax the application. Please mail the check to: Royal Neighbors of America 230 16th Street Rock Island, IL 61201 All information on the application must correspond with information obtained in the phone interview. Royal Neighbors will also review the owner, payor and beneficiary information to ensure that it is acceptable. For more information about owners, payors and beneficiaries, please see section General Information of this guide. IF YOU HAVE ELECTED THE Interview Later Option: If you are taking an application outside the available interview times, or encounter other extenuating circumstances, you may wish to have your client interviewed at a later time. Submit the fully completed and signed application to Royal Neighbors, along with the initial premium payment and any other supporting documentation such as replacement forms. After receipt of the application, an interviewer will call your client to complete the medical underwriting of the application. 5

Once the client completes the interview, MRS will notify Royal Neighbors of the medical decision. Royal Neighbors will complete the final review of all information and determine whether the certificate can be issued. You will be notified if the certificate cannot be issued. The Conditional Receipt on page 5 must be completed whether or not you have received the premium payment. The receipt must be left with the owner. Page 6 with the MIB Notice and Fair Credit Report Act Notice must be left with the proposed insured. Completing the Application PART 1 Section 1: Complete all information. Section 2: Complete and submit state replacement forms, if required, with the application. Section 3: Complete if applicable. Section 4: You must include the relationship of the beneficiary to the applicant. There must be an insurable interest between the insured, owner and beneficiary. Examples include immediate family or estate. Section 5: Complete the plan and face amount. The minimum face amount necessary to include the ALB Rider is $7,000. Section 6: Please clearly mark the mode of payment, whether or not this is draft first payment and the premium amount quoted. If premiums will be paid electronically, complete the PAC form on page 4 being sure to include a voided check with the application. Refer to the rate chart for appropriate premium. PART 2 Complete Sections 1 and 2 in their entirety. Information obtained in the telephone interview must correspond to the answers on the application. The owner/insured must sign and date in the appropriate areas on page 3. The Agent s Report on page 4 must be fully completed. Pre-Authorized Collection (PAC) form on page 4 must be completed if applicable. Indicating a draft date on the PAC authorization form is always required for clients choosing this mode of premium payment. To avoid issue delays, when a date is not shown the default date will be the 5th day of the month (regardless of the approval/issue date). General Information Certificate delivery: All certificates will be mailed directly to the certificateowner unless the Mail certificate to agent box is marked at the top of page 1. Reinstatement: Requires payment of all past-due premiums necessary to bring the certificate current. Requirements and procedures are set forth in the insurance certificate. Re-date: A re-date brings the effective date of the original certificate number forward to a current date, and premium payments begin with the new effective date. We will allow one re-date per client, within the first twelve (12) months after the issue date. We will require: 1. A new application, complete and signed, with REDATE CERTIFICATE # 0000101xxxxx clearly written on the top of the application 2. The first premium MUST be paid by check (no EFT). We can draft the client s account thereafter, if that is the preferred payment option. Re-write: A re-write is the issue of a new certificate. We will allow one rewrite per client, the first twelve (12) months after the issue date. We will require: A new application completed and signed The POS telephone interview The first premium MUST be paid by check (no EFT). We can draft the client s account thereafter, if that is the preferred payment option If an application is received on a client who has already had a rewrite/re-date in the past 12 months, both you and your client will be notified that the application has been closed. 6

Owner: Preferred owner is the proposed insured but spouse/domestic partner or adult child may be acceptable. Beneficiary: May be spouse/domestic partner or other immediate family member or insured s estate. Payor: Payor must be a natural person (i.e. cannot be an organization or company). Preferred is the proposed insured but spouse/domestic partner or adult child may be acceptable. An agent may not pay the initial or future premiums for an insured. Frequently asked questions What if I am unable to complete the phone interview at the time of the sale? You may submit the application and the interview will be ordered from the Home Office. Please note this may delay processing of your business. Do I have to complete the application in its entirety even though the interviewer asked many of the questions? Yes. The application is part of the contract so it must be fully completed, including answers to the health questions. If I disagree with the underwriting decision made, what options do I have? The underwriting decision made by MRS is based on criteria set by Royal Neighbors, therefore all decisions are final. If declined for SIWL or GDB, is my client eligible to apply for any other life insurance plan with Royal Neighbors? No. We do not offer that option. If my client was declined for a traditional product with Royal Neighbors, can they apply for the SIWL or GDB? No. We do not offer that option. Who do I call if I have questions? Underwriting: (866) 733-9758, Option 1 Sales Support: (800) 770-4561, Option 1 Agent Supplies: (800) 770-4561, Option 2 Agent Licensing & Contracting: (800) 770-4561, Option 3 Sales Commissions: (800) 770-4561, Option 4 Do I need to send in the application if my client is declined for coverage? Yes, because we need the signed authorization for the MIB search. Are either the SIWL or GDB a guaranteed issue product? No. The decision is based on Royal Neighbors underwriting guidelines. 7

Prescription Indicator Medication Name Prescribed, Refilled, or Taken Within Timeframe Below Eligibility (Action) Medical Condition Related to Prescription Aldactone 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Aricept 2 Years Decline Alzheimers Bumetanide 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Carbidopa and/or Levodopa 3 Years Graded Death Benefit Parkinson's Disease Carvedilol 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Cognex 2 Years Decline Alzheimers Combivent 3 Years Graded Death Benefit COPD Coreg 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Dilantin 3 Years Graded Death Benefit Seizure Disorder Donepezil HCL 2 Years Decline Alzheimers Exelon 2 Years Decline Alzheimers Furosemide 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Imdur 18 Months Decline Angina Imdur 19-36 Months Graded Death Benefit Angina Isordil 18 Months Decline Angina Isordil 19-36 Months Graded Death Benefit Angina Isosorbide 18 Months Decline Angina Isosorbide 19-36 Months Graded Death Benefit Angina Keppra 3 Years Graded Death Benefit Seizure Disorder Lasix 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Memantine 2 Years Decline Alzheimers Namenda 2 Years Decline Alzheimers Nitro Patch 18 Months Decline Angina Nitro Patch 19-36 Months Graded Death Benefit Angina Nitro Quick 18 Months Decline Angina Nitro Quick 19-36 Months Graded Death Benefit Angina Nitroglycerin 18 Months Decline Angina Nitroglycerin 19-36 Months Graded Death Benefit Angina Nitromist 18 Months Decline Angina Nitromist 19-36 Months Graded Death Benefit Angina Nitrostat 18 Months Decline Angina Nitrostat 19-36 Months Graded Death Benefit Angina Razadyne 2 Years Decline Alzheimers Riluzole or Rilutek 3 Years Graded Death Benefit ALS (Lou Gehrig's) Spiriva 3 Years Graded Death Benefit COPD Spironolactone 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Torsemide 2 Years Decline Treats symptoms of congestive heart failure, kidney failure, or liver failure Royal Neighbors reserves the right to ask additional questions about any medication (or combination of medications) which may suggest treatment for a condition relating to one or more of the impairments specified in the application questions. 8

Simplified Issue Whole Life Annual Premiums Per $1,000* of Face Amount Product not available in all states. Please confirm product availability. Note: Premiums quoted for Montana applications must use male rates for both male and female applicants. Modal Factors: Monthly EFT Quarterly Semi-Annual Annual.087.265.52 1.0 Modal Certificate Fee: Monthly EFT Quarterly Semi-Annual Annual $2.61 $7.95 $15.60 $30.00 [(Rate X Modal Factor) rounded to 2 places X (Units)] rounded 2 places + Modal Certificate Fee = Modal Premium [(28 X 0.087) = 2.436 > 2.44 X 10 > 24.40] + 2.61 = 27.01 monthly EFT premium 9

Simplified Issue Whole Life 10

Simplified Issue Whole Life 11

Graded Death Benefit Whole Life Annual Premiums Per $1,000* of Face Amount Accidental Death Provision not approved in Arkansas. Product not available in all states. Please confirm product availability. Modal Factors: Monthly EFT Quarterly Semi-Annual Annual.087.265.52 1.0 Modal Certificate Fee: Monthly EFT Quarterly Semi-Annual Annual $2.61 $7.95 $15.60 $30.00 [(Rate X Modal Factor) rounded to 2 places X (Units)] rounded 2 places + Modal Certificate Fee = Modal Premium [(36 X 0.087) = 3.132 > 3.13 X 10 > 31.30] + 2.61 = 33.91 monthly EFT premium 12

Graded Death Benefit Whole Life 13

Graded Death Benefit Whole Life 14

Royal Neighbors of America Insurance with a Difference SM As a non-profit fraternal organization, Royal Neighbors of America exists for the benefit of its members. It offers insurance products to fulfill a variety of needs for growth, savings, and protection. Members also receive valuable member benefits and can participate in volunteer activities through the organization s local chapters to make a difference in their communities. The organization s philanthropic efforts are dedicated to changing women s lives through its national programs and through the Royal Neighbors Foundation, a 501(c)(3) charity. Get to know us: Since 1895, Royal Neighbors of America has been dedicated to insuring lives, supporting women, and serving communities. We were founded by nine strong, independent, and visionary women who wanted to empower women and those they cared about. Through local chapters, our more than 225,000 members work together to direct our national resources to causes that make a difference in their communities. We began giving back as early as 1906 when we gave financial aid and hands-on assistance to victims of the San Francisco earthquake. More recently, our financial help has made a difference to those affected by natural disasters such as Hurricanes Hugo, Rita, and Katrina; the Parkersburg, IA, tornado; and the Midwest floods. In a crowded industry of look-alike insurance companies, one name stands out from the rest. Royal Neighbors of America is Insurance with a Difference SM.

Royal Neighbors of America www.royalneighbors.org (800) 770-4561, Option 1 Form 2996-B; Rev. 4-2011