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Indexed Annuities

14466-IA(6-07)

“Standard & Poor’s®”, “S&P®”, “S&P 500®”,

“Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Bankers Life and Casualty Company. The Bankers Equity+ and PBIA annuities are not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of purchasing these products.

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Strength��• More than $9 billion in assets under management��• Over 160 branch offices throughout the country��Stability��• Established in 1879��• One of the only companies devoted exclusively to serving�the senior population��Service��• 1.24 million policyholders��• 98% of health claims and 90% of life/annuity claims �processed within 7 days of receipt ��• More than $900 million in policy benefits paid out in 2006

The Bankers Difference:�Strength, Stability, Service

Property of Bankers Life and Casualty Company.

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Income

3 Circles Concept of Personal Finance

Bills

Reserve

Nest Egg

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Variable

Registered Securities Products

Variable annuities are classified as “investments”
Requires “Registered Representatives” �for assistance since there is potential of both �stock market gains & loss.

Fixed

Returns are either based on fixed interest rates or,
linked to the growth of a stock market index such
as the S&P 500^®

Fixed Deferred Annuities generally offer a guarantee �of principal and earnings
There is no risk of stock market loss so they are not considered registered securities products
Fixed annuities are classified as “cash accumulation vehicles”

Two Classifications of Annuities

“Standard & Poor’s^®”, “S&P^®”, “S&P 500^®”, “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Bankers Life and Casualty Company. The Bankers Equity+ and PBIA annuities are not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of purchasing these products.

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�Plan Types��• Non-Qualified: After tax funds such as cash, �excess savings, CDs, mutual funds, �non-IRA annuities, life insurance cash value, etc.��• Qualified: Before tax funds such as IRAs, Mutual Fund IRAs, 401(k)s, TSAs/403(b)s, 457s, �Roth IRAs, etc.

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Annuities

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Bankers has three Indexed Annuity options:�Strong Guarantee �Strong Participation �4% Premium Bonus Indexed Annuity��• With all three, the possible gains are tied to increases in the S&P 500^® based on the policy anniversary date. �• The Account Value is protected against �market risk – the policy will never experience a �loss due to declines in the market.

Index Annuities

* Policy Forms LA-07C and LA-07G

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• Benchmark of the Stock Market��• The S&P 500^® reflects the long term growth potential �of equity-linked returns that historically have �outperformed fixed-interest vehicles and inflation.��• S&P 500^® is not the 500largest stocks or companies. ��• S&P 500^® represent 70% of the Total U.S. Equity �market’s capitalization.��

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Understanding the S&P 500^®

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S&P 500 Index^®

Total Return:�Item(s) from 1-01-1991 to 12-31-2005

Name

Time Period

Cumulative�Total Return %

Period’s Annualized�Total Return %

Max Front

Load %

Max Back

Load %

Expense

Ratio %

Standard & Poor’s 500 ^®

Jan 1991-Dec 2005

411.46

11.49

NA

Performance Disclosure�The performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate thus an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein. For information current to the most recent month-end, please visit http://advisor.morningstar.com/familyinfo.asp.

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Earnings Per Year (Hypothetical Perfect Market)��Average Annualized Return = 10%

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Power of Loss

Year	1	2	3	4
Annual Return	10%	10%	10%	10%

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Earnings Per Year ��Average Annualized Return = 4.6%�

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Power of Loss

Year	1	2	3	4
Annual Return	10%	10%	10%	-10%

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Power of Loss

Earnings Per Year ��Assume same S&P 500^® return in IA with 70% Participation Rate��Average Annual Yield = 5.2%��With No Market Risk!��There is a significant mathematical advantage to avoiding losses, which is why many people choose to avoid any risk of loss.

Year	1	2	3	4
Annual Return	7%	7%	7%	0%

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How Bankers’ IAs Avoid Losses

Invest the Majority of the Premium in Bonds to �Guarantee the Principal
The Balance is used to Purchase Call Options on the �Equity Index (S&P 500^®)

Please note, Index Annuities are insurance products and do not participate directly in stocks, bonds or stock market indexes

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	1998	1999	2000	2001	2002	2003	2004	2005	2006
LA-07G Account Value	$10,400	$11,344	$12,045	$12,045	$12,045	$12,045	$12,950	$13,142	$13,497
S&P 500 ^®	$10,000	$12,667	$15,140	$13,605	$11,831	$9,066	$11,458	$12,488	$13,803

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Benefits of Bankers LA-07G Bonus IA�Assume $10,000 Single Premium with 4% Premium Bonus using monthly averaging at 75% Participation Rate�vs. $10,000 invested directly in S&P 500^® Index

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Benefits of Bankers LA-07G Bonus IA�Assume $10,000 Single Premium with 4% Premium Bonus using monthly averaging at 75% Participation Rate�vs. $10,000 invested directly in S&P 500^® Index

	2000	2001	2002	2003	2004	2005	2006
LA-07G Account Value	$10,400	$10,400	$10,400	$10,400	$11,181	$11,347	$11,653
S&P 500 ^®	$10,000	$8,986	$7,814	$5,988	$7,568	$8,248	$9,117

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Penalty Free Annual Withdrawal Amount:

10% of initial single premium after year 1.

Withdrawals in excess of this 10% will have the following surrender charges applied.

Access To Your Money

A key feature of these three Bankers IA’s is that they have no contract term. After the surrender period is over, the policy continues as an Index Annuity without needing to be “renewed”.

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Policy years	1	2	3	4	5	6	7	8	9	10
Strong Guarantee	9%	8%	7%	6%	5%	4%	3%	2%	0%	0%
Strong Participation	10%	10%	10%	9%	8%	7%	6%	5%	3%	1%
PBIA*	10%	10%	10%	9%	8%	7%	6%	5%	3%	1%

* The 4% on the PBIA has a 4 year vesting schedule that is separate from the Surrender Charge Schedule. During these first 4 years a withdrawal for more than 10% of the Single Premium will result in a proportional deduction of any Premium Bonus that has not been vested into the policy.

On this slide discuss an example of the Companies average size annuity ($40,000) and that if the policyholder could choose to take:

Approximately $100 month in interest depending on the base rate after year 1.
A 10% free withdrawal
A 20% free withdrawal if they didn’t take a withdrawal in the previous year.

*In other words they could take out 10% each year or up to 20% every other year free of any fees.

*They could take their interest only and if their annuity was being credited at 4% they could access another 6% of their account.

Compare the flexibility with Banker’s annuities compared to many savings vehicles that only allow people to take out interest.

With the Bonus annuity the owner may:

Leave the interest in the annuity and let it grow tax deferred
Take the interest out monthly, quarterly, yearly
Take less than interest out on systematically
Take interest and principle out systematically withdrawal charge free if less than 10% yearly.
Take 20% out in a single year if now withdrawals in the prior year
Annuitize to maximize income

Bottom line is this; Our Bonus annuity was designed with Senior’s needs in mind.

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The Renewal Benefit – CD vs. Annuity

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5 yrs 5 yrs 5 yrs 5 yrs

CDs usually give you 5-10 days to access

your money Penalty Free

Typical

5 year

CD

Withdraw Penalty Withdraw Penalty Withdraw Penalty Withdraw Penalty

10	10	10	9	8	7	6	5	3	1	0	0	0	0	0	0	0	0	0	0

LA-07G Surrender Charge Percentage

Surrender Charge remains 0%... 100% access to your money

Premium Bonus Indexed Annuity

(LA-07G)

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Subject to tax laws — this chart may vary.

How would you like to pass on �your assets?

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The Will

1. Probate

2. Safeguarding

3. Assembling Assets

a. Safe deposit box

b. cash

c. securities

d. Household & personal effects

e. Real estate

f. out-of-state property

g. miscellaneous

4. Appraisal

5. Overall Review

a. securities

b. Personal & household effects

c. real estate

d. business

6. Claims Kinds

7. Taxes

8. Income Taxes

a. decedent’s

b. estate’s

c. gift tax

9. Inheritance Taxes

a. domicile

b. Federal estate taxes

c. Foreign states & countries

10. Distribution of Estate

a. Payment of legacies

b. Establishment of trusts

11. Final Accounting

12. Litigation?

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Beneficiary

Annuities

or

Life Insurance

Subject to tax laws — this chart may vary.

How would you like �to pass on your assets?

…or this way?

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Terminal Illness (LA-105M)*

After the first year, if a doctor certifies that the annuitant is terminally ill with a life expectancy of 12 months or less, then an additional withdrawal of up to 75% of the single premium may be made without a withdrawal charge.

Convalescent Care (LA-105L)*

After the first policy year, if the annuitant is confined to a Nursing Home for at least 30 consecutive days, an additional withdrawal of 10% of the single premium may be made without a withdrawal charge.

Two Great Riders

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* Riders are not available in all states

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1. No upfront sales charges and no annual fees.��2. Guarantees: Minimum Guaranteed Cash Surrender Value from Day One�-Strong Guarantee: MGCSV will never be less than 90% of initial premium increasing by 3% per year�-Strong Participation and Bonus: MGCSV may vary by issue year, but will never be less than 87.50% of initial premium increasing by 1.5% per year��3. Annual access to your money:�Free Withdrawal Amount = 10% of Initial Premium after year 1 �Declining withdrawal charges that permanently end��4. Opportunity to participate with no market risk in the growth of the S&P 500^®, which has historically outpaced inflation and fixed interest vehicles ��5. You can choose to annuitize the policy for a guaranteed monthly income based on the Cash Surrender Value that you cannot outlive.��6. Direct Rollovers from IRAs and other qualified plans

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Top Ten Reasons People Own IA with Bankers…

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7. Non-taxable Fund Transfers from Life Insurance and Annuity policies by 1035 exchanges ��8. Tax-deferred growth means no taxes due until funds are withdrawn�- Unlike taxable income from most investments, including interest from tax-exempt bonds, deferred interest on annuities may reduce the risk of 50% or even 85% of your Social Security benefits being taxed*��9. In most cases avoids probate when you name a beneficiary. This can save your heirs the time and money of probate, which can take years and cost, by national estimates, 4% – 10% of the estate value**��10. To the extent permitted by law, Annuities benefits are not subject to attachment by creditors*

Top Ten Reasons

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*Bankers Life & Casualty does not provide tax or legal advice. Based on your particular circumstances, you should seek advice from independent tax and legal advisers. You cannot rely upon or use the information above for the purposes of avoiding any tax or tax penalty that may be imposed by the Internal Revenue Code.

**National Association of Financial and Estate Planning, Estate Planning Basics, 2007

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Three Types of Annuity Owners:��• Strong Guarantee Indexed��• Strong Participation Indexed��• 4% Premium Bonus Indexed ��

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Your Needs:

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Income

3 Circles Concept of Personal Finance

Bills

Reserve

Nest Egg

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You Have Spent a Lifetime

Accumulating Assets

Not connected with or endorsed by the U.S. government or the Federal Medicare Program.

RETIREMENT

INCOME

Growth • Security

Emergency

LONG-TERM CARE

At Home • Assisted Living

Nursing Home

FINAL EXPENSES/

SURVIVIORS’INCOME

Burial • Taxes • Gifts

MEDICAL EXPENSES

Hospital • Doctor

Medicare • Critical Illness

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