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LIBERTY NATIONAL LIFE INSURANCE COMPANYINFORMATIONAL BOOKLETforUNITED AMERICANAGENTSUNIT MANAGERSBRANCH MANAGERSi03-02-09 Ed.LNL0924

ForewordAt Liberty National, the Agent's compensation is earnedpolicies, the servicing of policies, and from bonuses.fromthesalesofThere is practically no limit to the amount of compensation an Agent can earn.Ours is a sales job. We are in the business of selling insurance. We also mustservice what we sell so that it will stay in force. The Agent's compensation is areflection of his/her ability to develop new clients, sell additional business toexisting clients as their needs dictate, and to keep the business sold and allbusiness assigned in force.We believe that under this compensation system, those who produce good businessand look after their customers will be rewarded.The sale of a policy and thecollection of the initial premium are not the whole story.It is just asimportant, or more so, that the insurance be continued in force and that thecustomers receive the service to which they are entitled.NOTICE:THIS INFORMATIONAL BOOKLET DOES NOT CONSTITUTE A CONTRACT OF EMPLOYMENTAND IS NOT INTENDED TO ALTER THE TERMS OF YOUR INDEPENDENT CONTRACTOR’S AGREEMENTIN ANY MANNER WHATSOEVER. THIS DOCUMENT IS SUBJECT TO MODIFICATION WITHOUT PRIORNOTICE TO INDEPENDENT CONTRACTORS.REFER TO YOUR INDEPENDENT CONTRACTOR’SAGREEMENT, AND APPLICABLE COMMISSION SCHEDULE(S), WITH LIBERTY NATIONAL LIFEINSURANCE COMPANY FOR THE ACTUAL TERMS AND CONDITIONS WHICH APPLY. IN THE EVENTANY INFORMATION CONTAINED HEREIN CONFLICTS WITH THE INDEPENDENT CONTRACTOR’SAGREEMENT, THE INDEPENDENT CONTRACTOR’S AGREEMENT SHALL CONTROL.ii03-02-09 Ed.LNL0924

TABLE OF CONTENTSAGENTSI.COMMISSION ACCOUNTA. Credits .B. Charges .C. Payments from the Commission Account .D. Lump Sum Withdrawals .E. Transfers of First Year Commissions .12222II.COMMISSION RULESA. Split Commissions . 2III.WEEKLY PRODUCTION BONUSA. Calculation of Bonus . 2B. Payment of Bonus . 4C. DCN Multiplier for Management Reassigned as Agents . 4IV.SPECIAL BENEFITSA. Torch Club . 4UNIT MANAGERSV.OVERWRITE COMMISSIONSA. Payment of First Year Commissions . 7B. Payments from the Commission Account. 7C. Lump Sum Withdrawals . 7VI.PERSONAL PRODUCTIONA. Commissions . 7B. Rules . 7VII.WEEKLY PRODUCTION BONUSA. Payment of Bonus . 7VIII. SPECIAL BENEFITSA. Torch Club . 7BRANCH MANAGERSIX.OVERWRITE COMMISSIONSA. Payment of First Year Commissions . 10B. Payments from the Commission Account . 10C. Lump Sum Withdrawals . 10X.PERSONAL PRODUCTION . 10XI.BONUSA. Weekly Production Bonus . 10XII.SPECIAL BENEFITSA. Torch Club . 10iii03-02-09 Ed.LNL0924

Explanation of Abbreviations and TermsANN-Annual ModeAP-Annual PremiumART-Annual Renewable TermBB-Bank Budget ModeDCN-Declines, Cancellations, and Not-TakensFYA-First Year AgentLNL-Liberty National Life Insurance CompanyPD-Payroll Deduction ModeRYA-Renewal Year Agentiv03-02-09 Ed.LNL0924

United American AgentsI.COMMISSION ACCOUNTAll annual commissions, whether in the form of Direct Pay or credited to thecommission account, shall constitute advanced loans.A. CreditsA percentage of the first year commission will be credited and includedas Direct Pay in the Agent’s weekly compensation when an application iskeyed into the Issue System in the Home Office.This amount is the“submitted advance.” No submitted advance will be paid if the Agent hasa negative commission account or if the application is for personalbusiness.The week of official issue, the full commission will be credited to thecommission account and any submitted advance will be charged.The submitted advance percentages are:BB and Annual modesPD (Sec. 125 only)MN & Other PDOther onnon-Section125PDapplications, 50% of the commission will be treated as Direct Pay whenthe first premium is paid and the Transaction Register indicates that thepolicy has been issued.There will also be Direct Pay on termconversions when the converted policy is issued and settled in theTransaction Register. The balance of the commission will be credited tothe commission account.If the Agent writing a policy on an annual premium mode has more than oneyear of service, the Agent will receive the balance of the commission asDirect Pay when the policy is issued.With the exception of annual premium policies, the maximum amount ofDirect Pay on any one application/policy will be 300.Agents may elect to have all their first year commission credited totheir commission account (i.e., no Direct Pay.)If the commission account of an Agent who has been contracted more than13 weeks falls below 500, the amount of Direct Pay will be reduced byone half.Commissions on placed COD policies will be credited to the commissionaccount one week after the Home Office receives the balance of the CODpremium.103-02-09 Ed.LNL0924

B. Charges1.Declines, Cancelled & Not TakenIf there is a 100% charge back of commissions on a policy thatgenerated Direct Pay, the amount of commissions previously paid asDirect Pay on that policy will be charged against the current week’sDirect Pay. (Typically, these are policies that are not taken, onesthat have paid less than three month’s premium, canceled or declinedapplications.) If there is not sufficient Direct Pay to cover thecharge back for the week, the excess charge will be applied to thecommission account.2.Lapsed PoliciesThere will be a commission charge back to the writing Agent onpolicies lapsing in the first policy year. Lapsed charges will bemade the same week of lapse based on the following schedule:Months PremiumPaid0-2 months3 months4 months5 months6 monthsChargeBack %100%90%80%70%60%Months PremiumPaid7 months8 months9 months10 months11 monthsChargeBack %50%40%30%20%10%C. Payments from the Commission AccountA percentage of the balance in the Agent’s commission account will bepaid in the form of a loan advance each week according to the followingschedule:Commission Acct. Balance% paidless than 3,0006 % 3,000 to 3,9998 % 4,000 and over10 %D. Lump Sum WithdrawalsThere will be no lump sum withdrawals from the commission account.E. Transfers of First Year CommissionsFirst year commissions will not be transferred to an active Agent from aterminating Agent or an Agent being reassigned to Unit Manager.II.COMMISSION RULESA. Split CommissionsCommissions may be split only on policies written on application A-250.III.WEEKLY PRODUCTION BONUSA. Calculation of BonusTo qualify for a weekly production bonus, an Agent must meet minimumrequirements with respect to declines, cancellations, and not-takens(DCN) and the minimum amount of gross submitted premium.203-02-09 Ed.LNL0924

The amount of gross submitted annual premium required in order to qualifyfor a bonus in a given week is based on the Agent’s length of servicewith Liberty National’s affiliate United American, and is reflected inthe bonus commission schedule attached to your Independent Contractor’sAgreement.The bonus percentages, also reflected in the bonus commissionschedule, are dependent upon the number of consecutive weeks the Agenthas qualified for a bonus.The DCN component of the bonus is shown in the following table:DCN%29 282726252423222120DCN MULTIPLIER TABLE(For Agents appointed April 28, 2008 and after)MULTIPLIERDCN 1.351.351.35The bonus calculation will be as follows:First, if the first year agent gross submits 950 or more annualpremium, the agent qualifies for a bonus. If not, the agent does notqualify for a bonus.If an Agent gross submits 950 or more, then we determine how manyweeks in a row the agent has qualified for a bonus and apply theapplicable percentage rate to the net submitted premium. Netsubmitted premium is calculated as follows:Net submitted premium Gross submitted premium minus declines,cancellations & not-takens.The DCN multiplier is then applied.xxNet submitted premiumBonus Percentage based on consecutive weeks gross submitting 850DCN MultiplierWeekly Production Bonus payable to the agentExample 1: A FYA has qualified for a bonus for the previous 3 weeks.This week, the FYA gross submits 950. The agent has no declines,cancellations or not-takens this week. The Agent’s 3-month DCN rate is12%, so the DCN multiplier is 1.05.Weekly Production Bonus 950 x 40% x 1.05 399.00303-02-09 Ed.LNL0924

Example 2: A FYA has qualified for a bonus for the previous 3 weeks.This week, the FYA gross submits 950. The agent has 100 indeclines, cancellations or not-takens this week. The Agent’s 3-monthDCN rate is 12%, so the DCN multiplier is 1.05.Since the agent gross submitted 950 or more, the Agent is eligiblefor a bonus. The actual bonus paid is based upon the net submittedpremium. Net submitted premium equals 850 ( 950- 100).Weekly Production Bonus 850 x 40% x 1.05 357.00Example 3: A FYA has qualified for a bonus for the previous 2 weeks.This week, the FYA gross submits 600. The agent has 100 indeclines, cancellations or not-takens this week. The Agent’s 3-monthDCN rate is 12%, so the DCN multiplier is 1.05.Since the agent did not gross submit 950 or more, the Agent is noteligible for a bonus. To be eligible for a bonus in the future, theAgent must submit 950 or more.B. Payment of BonusSubject to the following exceptions, 100% of the production bonus will bepaid direct by including it in the Agent’s weekly pay statement.If an Agent has a negative commission account, the bonus will be creditedto the commission account to the extent necessary to bring the commissionaccount back to 0. The balance of the bonus will then be paid in thenormal manner.C. DCN Multiplier for Management Reassigned as AgentsWhen a Branch Manager or Unit Manager is reassigned as an Agent, theagent will be assigned a DCN multiplier of 1.00 for the remainder of thatmonth and the next two full months.At that time, a new DCN will becalculated monthly.IV.SPECIAL BENEFITSA. Torch Club1.Torch Club QualificationTo qualify for Torch Club, Agents must have 72,800 ( 1,400 perweek) net AP issue and have premium growth during the qualificationperiod. Agents employed in 2009 can qualify for Torch Club byaveraging 1,400 per week net AP issue and have premium growthduring the remainder of the year, subject to a minimum total issueof 18,200. In addition, the Agent must meet all current minimumstandards.For Liberty National business, the first week’s issue and growthincluded will be those in the Transaction/Production Register dated01/02/09, and the last week’s issue and growth will be those in theregister dated 12/25/09.403-02-09 Ed.LNL0924