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Med Supp Compensation for

Independent Contractor Agents and

Unit Managers

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Agent Training Only

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Liberty National markets Medicare Supplements A, B, F, HDF, and N. This presentation details one of

many compensation opportunities.

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Any policy sold should be suitable to the needs

of the applicant based on their health status and financial

situation.

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Our expectation is that new Agents will be able to sell 5 HDF policies each week –

when appropriate for the customer – and, additionally, sell Liberty Whole Life

products on 3 of those sales, when appropriate.

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I. Agent HDF CommissionII. Agent Life CommissionsIII. Agent Life AdvancesIV. Agent Production BonusV. Agent RenewalsVI. Unit Manager HDF CommissionVII. Unit Manager Life CommissionsVIII. Unit Manager Life AdvancesIX. Unit Manager BonusX. Unit Manager Renewals

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I. Agent HDF Advanced Commission Loans

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Agent Advanced Commission Loans HDF Sales

$54 monthly premium per HDF sale

300% 1st month’s premium = $162

120% months 2-12 + $65

420% Total first-year commission from one HDF sale

$227

Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

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Agent Advance Commissions Loans HDF Sales

420%Total first-year commission from one HDF sale

= $227

Sales per week x 5

Total first-year commission per week $1,134

Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

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Agent Advance Commissions Loans HDF Sales

Total first-year commission per week = $1,134

Weeks per year x 52

Total first-year commissions $58,968

Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

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II. Agent Life Commissions

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Even after the HDF premium is paid and the minimum deposit of $50 made to the Reserve Fund Annuity, money remains.

Agent Commission: 3 LNL Life Sales per Week

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$38 monthly premiums $5k WLN policy

÷ .09 modal factor

$422 annual premium at 65% commission = $274

Agent Commission: 3 Life Sales per Week

What can they do with it? Buy additional coverage!

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$274 Life commission per sale

x 3 Sales per week

$822 Life commission per week

Agent Commission: 3 Life Sales per Week

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III. Agent Life Advances

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70% of commission is Direct Pay on submission

30% deposited into commission account

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Agent LNL Life Advance Commissions

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$274 Life commission per sale

x 70% Advance following week

$191 Advance commission per sale

Agent Commission: 3 LNL Life Sales per Week

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$191 Advance commission per sale

x 3 Sales per week

$573 Advance commission per week

Agent Commission: 3 LNL Life Sales per Week

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$573 Advance commission per week

x 52 Weeks per year

$29,796 Advance commission per year

Agent Commission: 3 Life Sales per Week

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IV. Agent Production Bonus

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But don’t forget about the bonus…

$422 AP per Life Sale

x 3 Policies per week

x 40% Bonus level*

$506 Bonus per week

Agent Bonus: 3 Life Sales per Week*

*Assumes Agent reaches 40% bonus level on 4th consecutive week of $1,000 or more: 1st wk = 10%, 2nd wk = 20%, 3rd wk = 30%, 4th wk = 40%

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So let’s add it all up

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$58,760 HDF commission

+ $29,796 Life advance commission

+ $26,312 Bonus

$114,868 Total commission & bonus

Agent Annual Commissions HDF + Life + Bonus

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$115,076 Total commission & bonus

+ $12,948 From Commission Account

$128,024 Total commission & bonus*

Agent Total Commissions HDF + Life + Bonus

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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Total Agent Compensation*$127,816

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*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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V. Agent Renewals

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HDF: Renewals*

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*According to contract provisions

Months Percentage

13-18 5%

19-36 5%

37-60 15%

60-120 15%

120+ 15%

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Whole Life $50,000 or Less: Renewals*

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*According to contract provisions

Months Percentage

13-18 9%

19-36 9%

37-60 9%

60-120 9%

120+ 9%

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VI. Unit Manager

HDFCommission Advance Loans

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UM Advance Commission Loans HDF Sales

$56 first-year premium per HDF sale

70% 1st month’s premium = $39

50% months 2-12 + $28

120% Total first-year commission from one HDF sale by one Agent

$67

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

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UM Advance Commission Loans HDF Sales

Total first-year commission from one HDF sale by one Agent

= $67

Sales per Agent per week x 5

Commission per Agent per week $335

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

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UM Advance Commission Loans HDF Sales

$56 first-year premium per HDF sale

Commission per Agent per week = $335

Weeks per year x 52

HDF commission per Agent per year* $17,420

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Advance Commission Loans HDF Sales on 3 Agents

Commission per Agent per year = $17,420

Agents in Unit x 3

Commission per year with 3 Agents in Unit*

$52,260

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Advance Commission Loans HDF Sales on 5 Agents

Commission per Agent per year = $17,420

Agents in Unit x 5

Commission per year with 5 Agents in Unit*

$87,100

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Advance Commission Loans HDF Sales on 7 Agents

Commission per Agent per year = $17,420

Agents in Unit x 7

Commission per year with 7 Agents in Unit*

$121,940

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Advance Commission Loans HDF Sales on 10 Agents

Commission per Agent per year $17,420

Agents in Unit x 10

Commission per year with 10 Agents in Unit*

$174,200

Writing Agent appointed 0-6 months. Rates: Female turning 65 (TX rates, area 3, non-smoker). Monthly bank draft payment mode.

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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XII. Unit ManagerLife Commissions

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$38 monthly premiums $5k WLN policy

÷ .09 modal factor

$422 annual premium at 40% commission = $168

UM Commission: 3 Life Sales per Week

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$168 Life commission per sale

x 3 Sales per week

$504 Life commission per week*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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XIII. Unit ManagerLife Advances

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70% of commission is Direct Pay

30% deposited into commission account

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$168 Life commission per sale

x 70% Advance following week

$117 Advance commission per sale

UM Commission: 3 Life Sales per Week

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$117 Advance commission per sale

x 3 Sales per week

$351 Advance commission per week*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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$351 Advance commission per week

x 52 Weeks per year

$18,252 Advance commission per year*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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$18,252 Advance commission per year

x 3 Agents in Unit

$54,756 Advance commission per year*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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$18,252 Advance commission per year

x 5 Agents in Unit

$91,260 Advance commission per year*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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$18,252 Advance commission per year

x 7 Agents in Unit

$127,764 Advance commission per year*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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$18,252 Advance commission per year

x 10 Agents in Unit

$182,520 Advance commission per year*

UM Commission: 3 Life Sales per Week

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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IV. Unit ManagerProduction Bonus

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UM: Bonus

The Unit Manager is eligible for a weekly production bonus that is a percentage of any weekly production bonus received by an Agent on the Unit Manager’s group.

The percentage will depend on the number of 1st time 40% bonus earners during the previous 8 weeks and the Agent’s length of service

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UM: Bonus

Bonus Override % of Agent’s Bonus

# NEW*1st Time 40% Agent’s Weeks of ServiceBonus earners: 1-39 40-78 79+0 40% 15% 10%1 60% 15% 10%2+ 80% 15% 10%

*occurring in the previous 8 week period, adjusted monthly

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UM: Bonus

In the Agent example, the Agent’s bonus was $506.

Assuming the Unit Manager is at the 80% level, the Unit Manager would receive $404 in bonus.

Assuming DCN multiplier of 1.

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Commission per week $320

Bonus per week $404

Compensation per week from 1 Agent* $724

UM: Weekly Compensation from 1 Agent

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Income per week per Agent $724

Agents on Unit x 3

Total Weekly Compensation* $2,172

UM: Weekly Compensation from 3 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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Income per week $2,172

Weeks per year x 52

Total Annual Compensation* $112,944

UM: Annual Compensation from 3 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Income per week per Agent $724

Agents on Unit x 5

Total Weekly Compensation* $3,620

UM: Weekly Compensation from 5 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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Income per week $3,620

Weeks per year x 52

Total Annual Income* $188,240

UM: Annual Income from 5 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Income per week per Agent $724

Agents on Unit x 7

Total Weekly Compensation* $5,068

UM: Weekly Compensation from 7 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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Income per week $5,068

Weeks per year x 52

Total Annual Compensation* $263,536

UM: Annual Compensation from 7 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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UM Income per week per Agent $724

Agents on Unit x 10

Total Weekly Compensation* $7,240

UM: Weekly Compensation from 10 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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Income per week $7,240

Weeks per year x 52

Total Annual Compensation* $376,480

UM: Annual Compensation from 10 Agents

*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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So let’s add it all up

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Unit Manager Compensation Potential

CommAgents HDF Life Production + BonusPer Unit Comm Advances Bonus Total*

3 $52,260 + $54,756 + $112,944 = $219,9605 $87,100 + $91,260 + $188,240 = $366,6007 $121,940 + $127,764 + $263,536 = $513,24010 $174,200 + $182,520 + $376,480 = $733,200

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*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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Unit Manager Compensation Potential

Agents Annual Commission Total Annual Per Unit Total Account Earnings*

3 $219,960 + $23,400 = $243,3605 $366,600 + $39,000 = $405,6007 $513,240 + $54,600 = $567,84010 $733,200 + $78,000 = $811,200

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*Less any shrinkage from Cancellations, Not-Takens and/or Lapses

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X. Unit Manager Renewals

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Whole Life $50,000 or Less Renewals*

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*According to contract provisions

Months Percentage

13-18 4%

19-36 4%

37-60 4%

60-120 4%

120+ 4%

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The End

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