The American Association of Government & Private Employees.

INTRODUCTION

The American Association of Government Employees (AAGE) and the American Association of

Private Employees (AAPE) are not-for-profit associations that offer a variety of benefits and services to their members either included as part of membership or offered as optional purchases.

“Where America Saves” is the motto of AAGE/AAPE. The objectives of our associations are to help our members live better on their existing income; help them achieve the American Dream of providing their children with a college education and to have total financial freedom for themselves. The AAGE/AAPE achieves these objectives by 1) using the power of its large membership base to obtain savings through group pricing; by, 2) utilizing its administrator’s experience to make group products available to its members that are generally not available to individuals; and by, 3) offering products and services that benefit the health and welfare of its members.

Interstate Specialty Marketing, Inc (ISM) is the exclusive distributor and administrator for all products sponsored by AAGE/AAPE. These sponsored products are available only to active members and their families. Members can obtain any AAGE/AAPE sponsored product that is approved for sale in their state of residence through a variety of ways, including: 1) from the

AAGE/AAPE Web site www.americanassociations.org; 2) through ISM; or 3) through appointed agents of ISM. Please note some products are only available through an appointed agent with an active insurance license.

PRODUCTS

AAGE/AAPE understands its members want options so that they can address the needs most crucial to them. Through the use of group products and a variety of pre-packaging, AAGE/AAPE is able to offer options that address different needs of individuals while at the same time offering the value associated with group purchasing. AAGE/AAPE sponsored products can be sorted into the following categories: Life Insurance & Cash Accumulation, Health Care, Financial Management Products, College Planning Services, and Consumer Benefits.

FREEDOMFLEX®

FREEDOMFLEX® is a deposit term life insurance product. In the first year, part of the premium is allocated to a Modified Premium Term to Age 100 Life Insurance Certificate/Policy and optional disability benefit portion of the certificate/policy. The remaining first year additional premium is allocated to the endowment portion of the certificate/policy and matures in 10 years. At the end of

10 years, this additional premium is returned to the insured at about 260% of its original value, provided the plan is not cancelled before the initial 10 years are up.

Starting in year two, part of the payment is still allocated as required premium for the term life insurance and optional disability benefit. The remaining premium now goes to work for the insured in their choice of cash accumulation vehicles. Having a choice gives the insured control over their investment strategies. The automatic cash accumulation vehicle is a no-load, no surrender charge flexible premium deferred annuity. Optional cash accumulation vehicles can be, for example, a no load mutual fund of the insured’s choice, in which case the selected investment company provides the insured with a prospectus, application, and full information about the chosen fund. Either way, 100% of the insured’s non-life insurance premium dollars goes to work for them. The insured may increase their cash accumulation payments at any time.

At the end of 10 years the insured now has the flexibility to determine what is best for them. They may stop payments entirely or continue them for as long they wish. Depending on the insured’s specific needs, the insurance coverage may be renewed for another 10 years, canceled, or continued as decreasing term insurance until age 100. Payments to the cash accumulation vehicle are also flexible. They may be stopped after 10 years or continue as long as the insured wishes.

FREEDOMFLEX® is often referred to as “FLEX”, because of its unique nature and flexible structure that offers a Benefit Side Component with optional riders and a Growth Side Component.

The motto of the A.A.G.E./A.A.P.E., is “Where America Saves”