Product Primer

Background/Marketing Opportunity
The Philippines is considered to be one of the countries with the lowest savings rate in the world. Studies indicate that more than 90% of Filipinos have too little or no savings at all. This number already includes people who have the capacity to save. This poor savings habit could be partly attributed to the Filipino culture. Some practices of Filipino culture that go against the ethics of savings are the big mans feast and the Maana Habit. One example of the former is the celebration of fiestas wherein members of the community showcase their wealth, in an effort to outdo each other. On the other hand, the Maana Habit is that behavior where tasks are put off for some other day for one reason or another. This of course, does not exclude the practice of savings. Other unsettling statistical facts about personal finance habits of Filipinos are as follows: 86% of Filipinos are concerned with inflation but 67% think savings and time deposits are the best way to beat inflation Among the middle class, 36% save regularly every month while 51% only save when they can 90% attempt to follow a budget, but only 33% stick to it 40% of the middle class pay their credit card balances in full monthly, while 22% pay only the minimum amount due in their credit card statements 84% of the working, middle class have no formal financial plan (Source: An Industry Financial Study of Lifestyles, Attitudes and Relationships)

Although the above seem to be disheartening, one financial agency reported in a population survey that more than half of the respondents believe on the importance of saving. The problem lies however in lacking the discipline to carry this out, simply because they are deficient in strategies, information and proper financial planning that can boost their savings to achieve their financial or personal goals. For one, Filipinos are still trapped in the paradigm that savings or wealth building is equated exclusively with bank savings and time deposits. Worse, those who have searched for alternative financial vehicles that give better returns have succumbed to fraudulent network marketing schemes which resulted to unfavorable outcome losing everything they had invested. It is this situation that motivates Insular Life to launch secured savings products in the market, this time through I-Aspire I-Aspire is a product that provides a better and systematic way of Aspire. helping Filipinos set aside some money for their future use, guaranteeing returns which are higher than what banks currently offer and providing insurance coverage for the loved ones they may leave behind. This newest savings product, with the power of compounding, is best availed as early as possible; hence, the direction to tap the younger market segment first jobbers, self-starters. This particular market segment has various needs that the benefits of this product could possibly address, namely: 1) lifestyle habits, advocacies and avocations travel, sports, hobbies/collections 2) personal or financial goals desire to prepare for the future such as marriage, big ticket acquisitions such as deposit for a new car or own house/condo, further Document Type: D4-Confidential AAA

studies second course/degree, masters and doctorate degrees, family obligations helping out siblings or relatives, early retirement, start-up capital for a business venture, etc

Product Description
I-Aspire is a participating plan that comes in three (3) variants based on maturity periods. It provides doubling life insurance protection and savings, in the form of guaranteed annual anticipated payments and a maturity benefit. The plans specific features are: 1. MATURITY PERIODS: a) 20 Years b) At age 60 c) At age 65 2. PAYING PERIODS:

MATURITY PERIOD
I-Aspire 20 maturing in 20 years I-Aspire 60 maturing at age 60 I-Aspire 65 maturing at age 65

PAYING PERIOD
5 and 10 years 5, 10 and 20 years 5, 10 and 20 years

3. LIFE INSURANCE PROTECTION BENEFIT: 1st to 4th yr. = 5th to maturity =

100% of Face Amount 200% of Face Amount

4. MATURITY BENEFIT a maturity benefit equal to the face amount will be payable at the end of the maturity year less any indebtedness if the insured outlives the maturity of the policy. 5. ANTICIPATED ENDOWMENT BENEFITS guaranteed anticipated payments (less any indebtedness) 5.1. Schedule of Anticipated Endowment benefit and payout is as follows:

I-Aspire 20
End of Policy Year 13th 14th 15th 16th 17th 18th 19th

I-Aspire 60
Policy Anniversary after attaining age: 53 54 55 56 57 58 59

I-Aspire 65
Policy Anniversary after attaining age: 58 59 60 61 62 63 64 Anticipated Payments 10% of Face Amount 10% of Face Amount 10% of Face Amount 10% of Face Amount 20% of Face Amount 20% of Face Amount 20% of Face Amount

4.2. If there is an outstanding loan, the anticipated endowment benefits shall be used to partially pay the loan so that remaining loan is always less than cash values after payment of anticipated endowment benefits. 6. MINIMUM FACE AMOUNT : P 300,000 Document Type: D4-Confidential AAA

7. PREMIUM BANDS: Band 1 : P300,000 below P1,000,000 Band 2 : P1,000,000 up Pre-computed premiums for I-Aspire is attached to this primer as Annex A. 8. MODES OF PAYMENT : Annual, Semi-Annual, Quarterly and Monthly for SSI Accounts and Auto-debit arrangement (ADA) only. Availability of SSI and ADA will be scheduled at a later date. 9. PAYOR AGES : 18 Years old and above (if with PR, up to age 60) 10. INSURABLE AGES:

VARIANT/PAYING PERIOD
I-Aspire 20 (5 Pay) I-Aspire 20 (10 Pay) I-Aspire 60 (5 Pay) I-Aspire 60 (10 Pay) I-Aspire 60 (20 Pay) I-Aspire 65 (5 Pay) I-Aspire 65 (10 Pay) I-Aspire 65 (20 Pay) 11. OPTIONAL RIDERS:

ISSUE AGES
15 days old 60 yrs. old 15 days old 45 yrs. old 15 days old 40 yrs. old 15 days old 30 yrs. old 15 days old 50 yrs. old 15 days old 45 yrs. old 15 days old 35 yrs. old

Riders WPD PR PR-WPD ADB SAR SARDI HR DDR DDR STAR STAR-WPD

ISSUE AGES 16 - 55 YRS Payor:18 - 60 YRS. Insured : 0 - 15 YRS Payor:18 - 55 YRS. Insured : 0 - 15 YRS 7 - 60 YRS. 7 - 60 YRS. 16 - 55 YRS 20 - 50 YRS 20 - 50 YRS 20 - 45 YRS 20 - 50 YRS 20 - 50 YRS

I-Aspire 20 5 Pay 5 pay, 5 year cover 4 pay, 5 year cover 4 pay, 5 year cover 5 pay, 20 year cover 5 pay, 20 year cover 5 pay, 20 year cover 5 pay, 15 year cover 5 pay, 15 year cover 5 pay, 20 year cover

10 Pay 10 pay, 10 year cover 7 pay, 10 year cover 7 pay, 10 year cover 5 pay, 20 year cover 5 pay, 20 year cover 5 pay, 20 year cover 5 pay, 15 year cover 5 pay, 15 year cover 10 pay, 20 year cover

Riders WPD PR

ISSUE AGES 16 - 55 YRS Payor:18 - 60 YRS. Insured: 0 - 15 YRS Payor:18 - 55 YRS. Insured : 0 - 15 YRS 20 - 50 YRS 20 - 50 YRS

I-Aspire 60 5 Pay 10 Pay 5 pay, 5 year cover 10 pay, 10 year cover 4 pay, 5 year cover 7 pay, 10 year cover

PR-WPD

4 pay, 5 year cover

7 pay, 10 year cover

HR DDR

5 pay, 15 year cover 5 pay, 15 year cover

5 pay, 15 year cover 5 pay, 15 year cover

20 Pay 20 pay, 20 year cover 17 pay, 20 year cover; 12 pay, 15 year cover; 7 pay, 10 year cover; 4 pay, 5 year cover 17 pay, 20 year cover; 12 pay, 15 year cover; 7 pay, 10 year cover; 4 pay, 5 year cover 5 pay, 15 year cover 5 pay, 15 year cover

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Riders STAR STAR-WPD

ISSUE AGES 20 - 50 YRS 20 - 50 YRS

I-Aspire 60 5 Pay

10 Pay

20 Pay

Riders WPD PR

ISSUE AGES 16 - 55 YRS Payor:18 - 60 YRS. Insured : 0 - 15 YRS Payor:18 - 55 YRS. Insured: 0 - 15 YRS 20 - 55 YRS. 20 - 50 YRS 20 - 50 YRS

I-Aspire 65 5 Pay 10 Pay 5 pay, 5 year cover 10 pay, 10 year cover 4 pay, 5 year cover 7 pay, 10 year cover

PR-WPD

4 pay, 5 year cover

7 pay, 10 year cover

HR HR DDR

5 pay, 15 year cover 5 pay, 15 year cover 5 pay, Coverage until age 65

10 Pay, Coverage until age 65 5 pay, 15 year cover 5 pay, 15 year cover 10 pay, Coverage until age 65

20 Pay 20 pay, 20 year cover 17 pay, 20 year cover; 12 pay, 15 year cover; 7 pay, 10 year cover; 4 pay, 5 year cover 17 pay, 20 year cover; 12 pay, 15 year cover; 7 pay, 10 year cover; 4 pay, 5 year cover 10 Pay, Coverage until age 65 5 pay, 15 year cover 5 pay, 15 year cover 5 pay, Coverage until age 65 10 pay, Coverage until age 65

STAR STAR-WPD

20 - 50 YRS 20 - 50 YRS

Positioning
1. I-Aspire is positioned as a savings plan to fund long-term financial needs so one can pursue his aspirations in life while achieving financial stability. Its key message is:

longPursuing aspirations while achieving your long-term financial stability

2. Target Market: 2.1. Demographics: a. Primary Target Market for this product would be those in their late 20s to mid 30s who are beginning to think of saving for whatever personal goals they have. b. Secondary Target Market are married individuals and/or those in the early Parenting Life Stage c. Those belonging in the AB, Upper C Socio-Economic Classes 2.2. Psychographics: a. Those who are passionate about their interests and hobbies b. Are excited to experience all that life has to offer

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3.

Value Proposition FEATURES Systematic savings scheme of 5, 10 or 20 years to pay, with a choice to mature in 20 years, at age 60 or at age 65 Anticipated Endowments equal to: 10% of FA to be given 7 yrs before maturity for 4 years 20% of FA 3 yrs before maturity for 3 years Insurance Coverage that doubles starting on the 5th policy year Various optional riders attachable. BENEFITS Guaranteed Savings VALUE TO THE CUSTOMERS Assurance that money will be available when you need it

Liquidity

Insurance plan works for you while you are living Availability of funds for major annual expensesno need to get it from current resources

Peace of Mind

Flexible and Customized

Assurance that funds will be available for use in the case of the insureds sudden demise Policyholder avails and pays for the features he needs

4. Product Comparison 4.1. Features: Prod B Co. PA 5, 10 or 20 years 20 years 10% of FA Prod SS20 Co. SL 20 years 20 years none Prod XS Co. A 5 or 10 years 20 years 5 years 6% of FA : 6th to 15th year 8% of FA : 16th to 19th year 10 years: 10% of FA : 11th to 19th year Prod XP Co. A 5 or 10 years 20 years 5 years: 6% of FA : 5 to 15th year 8% of FA : 16th to 19th year 10 years: 10% of FA : 11th to 19th year Insular Life's I-Aspire 5, 10 or 20 years 20 years, Age 60 and Age 65 20 YE: 10% of FA : 13th to 16th yr. 20% of FA : 17th to 19th yr. E60: 10% of FA : Pol Anniv after attaining age 53 to 56 20% of FA : Pol Anniv after attaining age 57 to 59 E65: 10% of FA : Pol Anniv after attaining age 58 to 61 20% of FA : Pol Anniv after attaining age 62 to 64

Features Pay period Maturity AE amount

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Features AE payout

Prod B Co. PA EOY 10 to 19

Prod SS20 Co. SL none

Prod XS Co. A Left with co. to accumulate and earn nonguaranteed interest; withdrawable only at maturity 5 years: 108% of FA 10 years: 110% of FA 200% of Sum insured

Prod XP Co. A 5 years: 6th to 20th year years: 10 years: 11th to 20th year 5 years: 108% of FA 10 years: 110% of FA 200% of Sum Insured

Insular Life's I-Aspire as stated in the preceding row (AE amount)

Maturity Benefit

200% of FA

100% of FA

100% of FA

Insurance protection

Minimum FA Other features

Yr. 1-10 = 3 x FA Yr. 11-19 = 3 x FA less cash benefits received Yr. 20 = 2xFA 30,000

100% of FA

Year 1 to 4 = 100% of FA Year 5 to maturity = 200% of FA

400,000 Has a Dollar denominated product

100,000

100,000

300,000

Insular Life Advantage: I-Aspire provides more flexibility in terms of paying and maturity periods to address affordability, likewise, catering to more needs.
4.2. Pricing and Cash Benefits - premiums below are based on sample proposals gathered from competition. Prod B Prod SS20 Co. PA I-Aspire Co. SL I-Aspire Issue age Annual premium Face amount 30 322,870 1,000,000 30 130,140 1,000,000 Issue age Annual premium Face amount 39 52,700 1,000,000 39 133,170 1,000,000

Pay period
Maturity Guaranteed Benefits Non-guaranteed Benefits (Dividends) Total Cash Benefits

10
20 years 3,000,000 1,201,310 4,201,310

10
20 years 2,000,000 30 2,000,030

Pay period

20

10* (no 20pay variant)

Total Premiums Paid 3,228,700 1,301,400 I-Aspire Advantage: You only pay 65% of your benefits vis--vis competition's 77% (total premium vs. the total cash benefits). If only guaranteed benefits were to be the basis, total premiums of competition exceed the guaranteed benefits.

Maturity 20 years 20 years Guaranteed Benefits 1,000,000 2,000,000 Non-guaranteed 30 Benefits (Dividends) 300,825 Total Cash Benefits 1,300,825 2,000,030 Total Premiums 1,054,000 1,331,700 Paid I-Aspire Advantage: For a mere premium diff. of P27,770 per year ((1,331,700-1,054,000)/10), you finish paying a 20-year plan for half a time. With a 26% increase in premiums, you get twice the benefit considering the guaranteed portion and still 54% more, even with competitors non-guaranteed portion.

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Issue age Annual premium Face amount

Prod XP5 Co.A 40 378,110 1,000,000

I-Aspire 40 243,690 1,000,000

Issue age Annual premium Face amount

Prod XP10 Co.A 40 194,810 1,000,000

I-Aspire 40 133,510 1,000,000

Pay period
Maturity

5 years
20 years

5 years
20 years

Pay period

10 years

10 years

Guaranteed Benefits 2,000,000 2,000,000 Non-guaranteed Benefits (Dividends) 934,341 30 Total Cash Benefits 2,934,341 2,000,030 Total Premiums Paid 1,890,550 1,218,450 I-Aspire Advantage: We are more affordable than competition by 36%.

Maturity 20 years 20 years Guaranteed Benefits 2,000,000 2,000,000 Non-guaranteed Benefits (Dividends) 1,238,006 30 Total Cash Benefits 3,238,006 2,000,030 Total Premiums Paid 1,948,100 1,335,100 I-Aspire Advantage: We are more affordable than competition by 31%. Prod XS Co.A 39 362,970 1,000,000

Issue age Annual premium Face amount

I-Aspire 39 243,350 1,000,000

Pay period

Maturity 20 years 20 years Guaranteed Benefits 2,000,000 2,000,000 Non-guaranteed Benefits (Dividends) 1,234,036 30 Total Cash Benefits 3,234,036 2,000,030 Total Premiums Paid 1,814,850 1,216,750 I-Aspire Advantage: We are more affordable than competition by 33%.

Policy Provisions
1. Provisions on Policy Dividends, Non-Forfeiture Options and Suicide in regular plans are also applicable for this plan. 2. This plan modifies the Reduced Paid-up Insurance as a Premium Default Option: Reduced Paid-up Insurance the policyowner may continue the Policy as a participating Paid-Up Insurance Policy for a reduced Sum Insured payable at the same time and on the same condition as stated in the Policy, except that: i. ii. The Death Benefit shall be a level amount throughout the remaining period of coverage equal to the reduced Sum Insured; and The Anticipated Payment Benefit shall no longer be payable.

The reduced Sum Insured will be such as the cash values of the Policy plus policy dividend credits less any indebtedness will provide when applied as a net single premium, based on the attained age of the Insured on the due date of the unpaid premium. If the cash values less any indebtedness exceed the net single premium for the original Sum Insured of the Policy, the excess will be paid to you upon conversion to Reduced Paid-Up Insurance.

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Underwriting
1. Full underwriting, following existing underwriting guidelines for whole life plans, will apply. 2. Substandard ratings are available from Class A to P 3. For the riders, existing guidelines and maximum applicable ratings will apply.

Application Processing
1. Applications for I-Aspire will be accepted starting June 6, 2011, initially for I-Aspire 20 (10 2011, Pay) variant. Pay) variant Other variants and SSI businesses will be accepted on a later date. An official announcement will be made accordingly. 2. Application forms for Regular plans are available at the district and regional offices. All questions in the application form must be answered. 3. The application form should be submitted with the official product proposal (Illustration of Benefits), including the Acknowledgment of Variability Form all duly signed by the applicant. 4. All routine underwriting requirements must be submitted with the application. 5. The policy contract to be issued will consist of the following: 5.1. Standard policy contract 5.2. Policy data page 5.3. I-Aspire Endorsement 5.4. A copy of the application form 5.5. A copy of the proposal 6. Issuance of policies will be done at the Head Office and all Regional Offices.

Policy Servicing
1. Initial premium payment will be accepted at the Head Office, all Regional Offices, District Offices, General Agencies and designated premium payment centers. 2. Benefit pay-out and policy changes can be done at the District Offices unless stated otherwise. 3. All policy transactions and corresponding fees will follow the other ordinary plans.

Agency Servicing, Commissions and other Compensations

1. This plan is a MAINSTREAM product and is included in the consideration of other agency compensation, i.e. production and persistency incentives. 2. Commission schedules: I-Aspire 20 PY2 10% 10% PY2 10% 10%

5 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up 10 PAY Band 1: FA 300 to below 1M Band 2: FA 1M and up

PY1 30% 40% PY1 35% 45%

PY3 5% 5% PY3 5% 5%

PY4 N/A N/A PY4 5% 5%

PY5 N/A N/A PY5 5% 5%

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5 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up 10 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up 20 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up

PY1 30% 40% PY1 35% 45% PY1 40% 50%

I-Aspire 60 PY2 10% 10% PY2 10% 10% PY2 10% 10% I-Aspire 65 PY2 10% 10% PY2 10% 10% PY2 10% 10%

PY3 5% 5% PY3 5% 5% PY3 5% 5%

PY4 N/A N/A PY4 5% 5% PY4 5% 5%

PY5 N/A N/A PY5 5% 5% PY5 5% 5%

5 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up 10 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up 20 PAY Band 1: FA 300K to below 1M Band 2: FA 1M and up 4. Policy Count Participation : 1:1

PY1 30% 40% PY1 35% 45% PY1 40% 50%

PY3 5% 5% PY3 5% 5% PY3 5% 5%

PY4 N/A N/A PY4 5% 5% PY4 5% 5%

PY5 N/A N/A PY5 5% 5% PY5 5% 5%

5. Contract Renewal : 100% FYC ; 1:1 Policy Count 6. Contest and Drives credits are as follows: FYC National Sales Drives Chairmans Circle Honors Program Short-term drive MDRT GAMA 100% FYP/IP N/A Policy Count 1:1

100% 100% N/A

N/A N/A

Launch Activities:
1. I-Aspire primers will be available within the week of June 6, 2011. 2. I-Aspire I-Quote in the Agents Portal will be ready by June 6, 2011. Only I-Aspire 20 (10 Pay) can be generated from this I-Quote version. Other variants will follow suit, upon further notice. 3. Brochures and Sales Presenters will be sent to the respective Regional, District and Office of the GA Coordinators Offices within the week of June 6, 2011. 4. I-Aspire may be viewed on our corporate website www.insularlife.com.ph by the week of June 6, 2011. 5. Applications will be accepted starting June 6, 2011.

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