e-Guaranteed Universal Life

1. e-Guaranteed Universal Life April 2003

2. e-Guaranteed Universal Life (eGUL) • What’s New • The Details • Commissions

3. What’s New • Guaranteed life insurance without surprises • Designed for protection-based needs • More flexible than term • Can make additional deposits and quick pay • More accountable than whole life • No reliance on uncertain dividends • Simpler than other universal life plans • Features removed to provide more guarantees • On SaveTax (Online and On CD)

4. No Market Index Accounts No Optional Benefits No Disability Benefit Payout No JLTD Early Death Benefit No JFTD No Bonus No Designated Deduction Account No Maximize Accumulation Option No Investor Plus No switching between single and JLTD No Substitution Of Life Simplicity

5. Features Guarantees Premium Payment Choices Guaranteed Surrender Amounts Issue Ages Minimum Coverage Increasing Death Benefit Type Cost Of Insurance Types Investment Options Loans Withdrawals Policy Deductions Surrender Charges Market Value Adjustment Express Account The Details

6. Features • Guarantees and simplicity • Policy can be paidup in 10 years or less • Fixed interest investments with high credited rates • Policy statements each calendar quarter and annually • Express Account premiums-on-deposit feature

7. Guarantees • Cost of Insurance (COI) rates • Paidup for the initial death benefit at the charges cease date • if cumulative Minimum Premiums have been paid • Guaranteed Surrender Amounts with Guaranteed 10 and Guaranteed 15 COI Types • Exempt from Accrual Taxation • Fixed Administration Charge

8. Guarantees (cont’d) • Premium tax deduction capped at 4% until the charges cease date • For Guaranteed 100, applies to age 100 • Investment option guarantees • Preservation of capital • Guaranteed availability • Minimum crediting formulas linked to Government Of Canada instruments • Minimum interest rates as high as 4.20%

9. Premium Payment Choices • The policyowner selects the period over which to pay premiums: 10 years, 15 years or to age 100 • Once the total premium is paid, the policy stays in force for life • Additional deposits can be made at any time • Deposits may be • Monthly by Pre-Authorized Chequing • Annually by direct billing • Ad hoc

10. Premium Payment ChoicesPremium Payment Example • Premium period: 10 years • Annual Minimum Premium: $1,200 • Total premium to guarantee coverage: $12,000 • The $12,000 can be paid in different ways • $100 per month for 120 months • $1,200 per year for 10 years • $3,000 per year for 4 years • $12,000 lump sum (portion above Maximum Premium goes to Express Account)

11. Guaranteed Surrender Amounts • Available from the 5th policy year with Guaranteed 10 and Guaranteed 15 • Not available with Guaranteed 100 • Independent of the policy’s account value • Available upon surrender or lapse • Not available for loans or withdrawals • Calculated as rate per $1,000, multiplied by (Current Death Benefit minus Account Value) • Increases to $1,000 per $1,000 at attained age 100 and older

12. Issue Ages • Available for Single Life or JLTD • For JLTD, for each life, the issue ages are 0-85 with a maximum rated up age of 90 • Maximum SEA shown in table

13. Minimum Coverage • Minimum premium of $300 • Minimum Death Benefit of $25,000 • Three rate bands for each COI Type

14. Increasing Death Benefit Type • Payout on death is • the Initial Death Benefit, plus • the eGUL Account Value, plus • the Express Account Value

15. Cost of Insurance (COI) Types • Guaranteed 10 • Guaranteed 15 • Guaranteed 100

16. Investment Options • Daily Interest Account (DIA) • Guaranteed Interest Accounts (GIAs) • Terms of 1, 2, 3, 4, 5 and 10 years

17. Investment OptionsMinimum Crediting Formulas • Based on Government of Canada instruments • Current credited rates available on www.NationalLife.ca and SaveTax Online

18. Loans • Borrow up to 90% of Loanable Value after the charges cease date • Not available with Guaranteed 100 • Loan interest rate is determined monthly as the average return on the investment accounts in prior month plus 2.25% • A loan which grows to the size of the eGUL Account Value will not cause the policy to lapse • Instead, the eGUL Account Value is used to pay off the loan and the policy continues inforce

19. Withdrawals • From eGUL and/or Express Account after the charges cease date • Not available with Guaranteed 100 • Up to 4 free per year - $25 fee for each additional withdrawal • Minimum net withdrawal amount is $200 • No fees for preset monthly withdrawals

20. Policy Deductions • Insurance Charge and Administration Charge are deducted monthly from eGUL Account Value until the charges cease date

21. Surrender Charges • Apply on surrenders • Applicable during the first 10 years for eGUL and first 2 years for Express Account

22. Surrender Charges (cont’d) Based on a percentage of Threshold Premium: Year 1 = 100% Year 8 = 350% Year 2 = 200% Year 9 = 225% Year 3 = 300% Year 10 = 150% Years 4 to 7 = 400%

23. Surrender Charges (cont’d) • Express Account Surrender Charge calculation: Amount Withdrawn x 0.75% x # of Months to End of 2nd Policy Year 12 months

24. Market Value Adjustment • Applies on GIA withdrawals, transfers, or surrenders before end of guarantee period

25. Express Account • Premiums-On-Deposit Account optimizing eGUL’s tax efficiency • Allows maximum funding • Same investment options as eGUL • Investment growth subject to accrual taxation

26. Commissions • Premium-Based • Asset-Based

27. Premium-Based Commissions • Up to Threshold Premium: • Year 1 = 65% • Years 2 to 5 = 3% • Between Threshold Premium and Maximum Premium: • Year 1 = 5% • Years 2 to 5 = 1% • Above Maximum Premium (i.e., on Express Account) • Year 1 = 0.5%

28. Asset-Based Commissions • On Combined Account Values: (eGUL Value + Express Account Value) • Years 6+ = 0.1%

29. Strength Through Performance