SALES IDEAS

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SALES IDEAS MARKETING CONCEPTS
the World of Indexing!
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If We Only Knew!!!

• 5 Year Historical Review !!!
• 1.00
• 4.24
• 4.60
• 6.74
• 9.36

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Index Annuity Sales

• 2001 Sales.6.5 Billion
• 2002 Sales.11.7 Billion
• 2003 Sales.14.0 Billion

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Where Do I Start

• How do You Know Which to Recommend?
• 400,000 Assets

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What Are The 3 Things I Can Do With My

• SPEND IT !!!
• SAVE IT!!!
• INVEST IT !!!

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CommonInvestment Programs

• Stocks
• Bonds
• Mutual Funds
• Variable Annuities

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CommonSavings Programs

• Bank Certificates of Deposits
• Insurance Company Fixed Annuities
• Government Instruments

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What ARE Investment and Saving Programs

• Ways To Accumulate

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What Is The Difference Between Investing And
Saving

• RISK

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ROADMAP

• 100,000 at Risk
• 300,000 No Risk to Principal

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Keep It Simple

• Two Major Types Of Savings Programs
• Bank CDs and Insurance Company Fixed Annuities

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Todays Challenge

• When Are Rates Going UP !!!
• I Could Put My In A CD !!!
• I Could Put My In A Traditional Fixed Annuity

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How Can I Potentially Receive More Yield Without
Risking Safety

• Fixed Index Annuity

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Who Should Own A Fixed Annuity

• 5 Year CD Buyer/Owner

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(No Transcript)
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How Can I Potentially Receive More Yield Without
Risking Safety

• Fixed Index Annuity

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What Is An Index Annuity?
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IT IS A FIXED ANNUITY
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OMFN Fixed Annuity Portfolio

• Indexed Annuities
• Reward Series (Loyalty, Index Spectrum Bonus)
• Spirit 7
• Index Rewards 5
• PowerSelect
• Prosperity 2
• Multi-Year Guarantee
• Platinum Series (5,7 and 10 year options)
• Platinum Plus Series (5,7 and 10 year options)
• Pledge Plus
• Immediate Annuities
• Standard,Sub-Standard,Senior Safeguard
• Bonus Annuities

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Benefits Of AFixed Annuity

• Tax Deferral
• Minimum Lifetime Interest Rate
• Income Which You Cannot Outlive
• No Market Risk To Principal
• Avoid Probate
• Credit Risk Protection

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Fixed Annuities Are Basically The Same EXCEPT for

• How They Credit Interest!!!!

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Index Annuities Are Simply Fixed Annuities with
An Interest Rate That Is Linked To an Index
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Index Annuities Have Two Key Parts

• Index Account Tied To Market Index Gains
• Contractual Guarantees To Include Minimum
  Guaranteed Interest Rates

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Common Indices Used

• SP 500 This Index includes a representative
  sample of Leading Companies in leading
  industries. First and most popular Index linked
  to an Annuity.
• Dow Jones Industrial Average 30 Widely held
  Stocks representing about a fourth of the value
  listed on the NYSE. Companies such as ATT,
  Coca-Cola, IBM, Wal-Mart and Walt Disney.
• NASDAQ-100 Reflects largest NASDAQ Companies
  from 4 Major Industry Groups Telecommunications,
  Retail, Computers and Biotechnology. Companies
  Such as Dell, Microsoft, Cisco and Yahoo.

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DOW 30

• Alcoa
• Altria
• American Express
• ATT
• Boeing
• Catapillar
• Citigroup
• Coca-Cola
• Dupont
• Eastman Kodax
• Exxon/Mobil
• General Electric
• General Motors
• Hewlett-Packard
• Home Depot

• Honeywell
• Intel
• IBM
• International Paper
• J.P.Morgan
• Johnson Johnson
• 3 M
• McDonald
• Merck
• Microsoft
• Procter Gamble
• SBC Communications
• United Technologies
• Wal- Mart
• Walt Disney

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The SP 500 as a Benchmark

• Most Index Annuities utilize the SP 500
• Tracks the average price changes of 500
  widely-held U.S. common stocks
• Widely accepted as a leading Index indicator for
  registering the performance of the U.S. stock
  market
• Historically outperformed fixed products

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SP 500

• AIG
• Citigroup
• IBM
• Microsoft
• Wal-Mart
• Pfizer

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Index AnnuitiesHow They Work
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Index Annuity

• How Does it Really Work?
• The Stairway to Financial Peace of Mind

Year 5
Year 6
Year 3
Year 4
Year 1
Year 2

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Why Own An Index Annuity

• In recent years ALL major equity indices are at
  or near their lowest levels since 1998
• Old adage buy low, sell high
• Index Annuities have potential for above average
  interest crediting
• An Annuity means there is NO risk to principal

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Recent Index Perfomance

• Market declines started in March 2000
• Overall worst market performance in 23 years
• Only three back-to-back declines since 1900 as
  measured by the SP 500. The index dropped
  consecutively in
• 1929-1930
• 1940-1941
• 1973-1974
• Followed by a 43.34 drop in 1931
• Source VanSant Mewshaw and Ibbotson Associates

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How did the Indexs Do in 2003
UP..UP..UP
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2003 Index Performance

• DOW Industrials.25.32
• SP 500.26.38
• Nasdaq.50.01

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BUT What will 2004 BRING??

• UP or DOWN Market????

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All Consumers Are Nervous

• Fixed Index Annuity

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Index Annuity
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Index Annuity

• ANNUAL RESET DESIGN

Year 5
Year 6
Year 3
Year 4
Year 1
Year 2

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Benefits of Annual Reset

• All Index Credits Are Locked In On Each Contract
  Anniversary !
• Protects Against Negative Years In The Market !
• All New Calculations Begin Where Previous
  Contract Year Ended !
• Easy Concept For Clients To Understand !

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The Benefits of Annual Reset

• All Index Credits Are Locked In On Each Contract
  Anniversary !

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Index Annuity

107,000
100,000
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The Benefits of Annual Reset

• All Index Credits Are Locked In On Each Contract
  Anniversary !
• Protects Against Negative Years In The Market !

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Benefits Of Annual Reset
110,000
SP 1,100
110,000
10
SP 1,000
100,000
-300
0
SP 800
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The Benefits of Annual Reset

• All Index Credits Are Locked In On Each Contract
  Anniversary !
• Protects Against Negative Years In The Market !
• All New Calculations Begin Where Previous
  Contract Year Ended !

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Hypothetical Annual Reset
133,100
121,000
110,000
SP 1,100
110,000
100
10
1,000
SP 1,000
SP 1,000
100,000
11
100
-300
0
SP 900
12.5
100
SP 800
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Hypothetical Annual Reset

• Year 1 Index Starts at 1000 and Ends at 1100 This
  Represents 100 Point Gain or 10
• Year 2 Starts at 1100 and Ends at 800 This
  Represents a 300 Point Loss BUT No Losses Impact
  Previous Earnings,Thus 0 for Year
• Year 3 Starts at 800 and Ends at 900 This
  Represents a 100 Point Gain or 12.5
• Year 4 Starts at 900 and Ends at 1000 This
  Represents a 100 Point Gain or 11

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Benefits of Annual Reset

• All Index Credits Are Locked In On Each Contract
  Anniversary !
• Protects Against Negative Years In The Market !
• All New Calculations Begin Where Previous
  Contract Year Ended !
• Easy Concept For Clients To Understand !

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Index Annuity

107,000
100,000
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How Does Money Grow
100,000 Premium
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How Does Money Grow
100,000 Premium
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Indexed Annuities
The Power of ZERO
I call that
OPPORTUNITY
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If We Only Knew!!!

• 5 Year Historical Review !!!
• 1.00
• 4.24
• 4.60
• 6.74
• 9.36

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An Index Annuity Alternative For The CD Buyer Or
Traditional Fixed Annuity Buyer
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Rewards Series
Index Rewards 5 (SPDA)
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Index Rewards 5 Is Simply A Fixed Annuity With
Its Interest Linked To An Index
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Index Annuities Have Two Key Parts

• Index Account Tied To Market Index Gains
• Contractual Guarantees To Include Minimum
  Guaranteed Interest Rates

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Choose Of Two Indices

• SP 500 This Index includes a representative
  sample of Leading Companies in leading
  industries. First and most popular Index linked
  to an Annuity.
• Dow Jones Industrial Average 30 Widely held
  Stocks representing about a fourth of the value
  listed on the NYSE. Companies such as ATT,
  Coca-Cola, IBM, Wal-Mart and Walt Disney.

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Index Rewards 5 - Structure

• Single Premium Deferred Indexed Annuity
• Four Indexed Options based on SP 500 or DJIA
• monthly average (100 par guaranteed no spread)
• point-to-point (100 par guaranteed no spread)
• Fixed Interest Option
• declared every policy anniversary
• Maximum issue age 85
• commissions reduced by 50 for issue ages 80-85
• Minimum of 5,000 qualified or non-qualified
• Minimum of 2,000 per option selected

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Five Account Value Options
5-year product term
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Index Rewards 5 - Structure

• Annual cap on indexed options
• None on the fixed option
• Minimum guarantees
• 100 of the initial premium _at_ 1.5 annually
• Minimum caps of 5
• Surrender charge percentages by year
• 9, 8, 7, 6, 5

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INDEX CAPS

• All Caps Are Declared In Advance
• All Caps Guaranteed For 1 Year
• Caps May Change Annually,But Never Less Than 5

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Index AnnuitiesMoving Parts
Participation Rate
Yield Spread (Asset Fee)
Cap (limit on gain)
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Current RatesIndex Rewards 5

• Monthly Averaging 10
• Point to Point 9.0
• Fixed Interest 3.2

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Monthly AverageHow It Works
SP 500 1,000
13,200
12
1,100
-1,000
100
1,000
10
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Point to PointHow It Works
SP 500 or Dow 30
Jan 1, xx 1,000
Dec 31, xx 1,100
1,100
-1,000
100
1,000
10
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Monthly AverageHow It Works
SP 500 1,000
13,200
12
1,100
-1,000
100
1,000
10
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Why Dont I Get The Entire 10

• Investing Gains Losses
• Savings No Losses

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Index Annuity

107,000
100,000
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The Benefits of Annual Reset

• All Index Credits Are Locked In On Each Contract
  Anniversary !
• Protects Against Negative Years In The Market !
• All New Calculations Begin Where Previous Year
  Ended !
• Easy Concept For Clients To Understand !

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Index Annuity

• Minimum Guaranteed Interest Rate

• The minimum guaranteed interest rate MGSV (100
  of initial premium, earning 1.5 interest) is the
  contract provision that allows Index Annuity
  contract holders to not be exposed to the
  potential of losing principal if the market does
  not perform as expected
• Example - Initial premium of 100,000 with a MGSV
  of 100 earning 1.5

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Index Annuities
Minimum Guaranteed Interest Rate
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Index Rewards 5 Hypothetical
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Index Rewards 5 Surrender Charges

• Apply to full and partial surrenders
• Waived upon
• Death of Owner - greater of Account Value or
  Minimum Guaranteed Surrender Value Available to
  Beneficiary
• Terminal Illness
• Unemployment
• Nursing Home Confinement
• Minimum Required Distributions (by company
  practice)
• 10 free withdrawal after the first year

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Index Rewards 5 Hypothetical
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Index Rewards 5 Hypothetical
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Index Annuity Sales Idea
Year 1 2 3 4 5
Index Gain
10 10
5 5
5 5
5 5
0
5 5
Index gain subject to contract fee and features
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Index Rewards 5 Commissions

• Based on policyholders actual age (age last)
• 4 commission ages 0-79
• 1.5 commission ages 80-90

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A Sales Idea That Will Work !!!!
Upside Potential
1 - 3
Index Annuity
CD
Securities
100 Risk
Security
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Index AnnuityMoving Parts
Participation Rate
Yield Spread (Asset Fee)
Cap (limit on gain)
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What Worked in 2003?
Calendar Year 2003 Index Annuity Returns
APP - Spread Rate
APP - Cap
Monthly Average - Cap
Monthly Average - Spread
Daily Average - Cap
Daily Average - Spread
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Taken from Jack Marrion, Advantage Compendium
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SAVINGS PROGRAM OPTIONS
Index Annuity

0
10
1 Yr. CD 1.06 Taxable
5 Yr. CD 3.14 Taxable
CDs are TAXABLE..
5 Yr. FA 3.50 Tax Deferred
Index Annuities are TAX DEFERRED!!!
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INTRODUCING

• Spectrum Rewards Index Annuity

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Spectrum Rewards Featuresat a glance
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Spectrum Rewards BonusFour Account Value Options
2.70 cap 32.40 maximum annual upside potential
3.70 cap maximum 2-year upside potential of
88.8
4.70 cap maximum 3- year upside potential of
169.2
1.70 for one year
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Spectrum Rewards ReserveFour Account Value
Options
2.15 cap 25.80 maximum annual upside potential
3.20 cap maximum 2-year upside potential of
76.6
3.65 cap maximum 3- year upside potential of
131.4
1.80 for one year
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Calculating Monthly Point to Point
Date SP Value Jan. 1 909.03 Feb. 1 910.05

• Subtract the starting value from the current value

• Divide the sum by the starting value

• Record the Index Change and New Starting point
  for the next month

910.05 909.03 1.02
1.02 909.03 .11
Index Change for 1st month .11
Starting point for 2nd month 910.05
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Monthly Point to PointOne Year Option
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Monthly Point to PointOne Year Option
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STEP UP with SPECTRUM
SPECTRUM BONUS
SPECTRUM RESERVE
1 Moving Part
3 Yr. Reset
1 Moving Part
2 Yr. Reset
14 Yr. Term
13 Yr. Term
Full Account Value At Death
1 Yr. Reset
Multiple Liquidity Riders
10.00
9.00
6 BONUS
4 BONUS
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Index AnnuityState Availability
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And, of course.
Thanks for your business..