Presenter Name Presenter Title AIG Life Insurance Date

Presenter Name Presenter Title AIG Life Insurance Date Policies issued by American General Life Insurance Company (AGL), Houston, TX, and The United States Life Insurance Company in the City of New York (US Life), members of American International Group, Inc. (AIG). AGLC 111543 REV 0220 1

Advanced Sales is a marketing unit of American General Life Insurance Company (AGL), and a member of American International Group, Inc. (AIG). No representation or warranty, express or implied, is made by AGL or its affiliates as to the completeness of the information provided. All companies mentioned, their employees, financial professionals and other representatives are not authorized to give legal, tax or accounting advice. Applicable laws and regulations are subject to change and individuals should consult an attorney, tax advisor, or accountant. Policies issued by American General Life Insurance Company (AGL), Houston, TX except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life). Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of AIG. Guarantees are backed by the claims-paying ability of the issuing insurance company. Products may not be available in all states and product features may vary by state. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 2

How much will it cost? Source: J. P. Morgan Asset Management, College Planning Essentials 2020 Edition, 2020 3

How much will it cost? College tuition vs. Other expenses Cumulative percent price change since 1983 Apparel Cars Coffee 27% 45% 96% Gas 124% Housing 169% Medical Care 403% Average annual increase of 6. 3% Tuition 798% 100% 200% 300% 400% 500% 600% 700% 800% Source: J. P. Morgan Asset Management, College Planning Essentials 2020 Edition, 2020 4

How do we pay for college? Funding Source Share (2018 -2019) [CATEGORY NAME], [VALUE] Student Borrowing Parent Income & Savings Relatives & Friends [CATEGORY NAME], [VALUE] Parent Borrowing Student Income & Savings Grants & Scholarships Source: Sallie Mae. How America Pays for College, 2019 5

How do we pay for college? § 65% of students contributed their own income or savings. § 66% of parents contributed their income and savings – 55% used their current income – 21% used a 529 college savings plan – 9% used retirement savings withdrawal § Families borrowed money – 38% students – 21% parents § 28% of borrowers never planned to borrow Source: Sallie Mae. How America Pays for College, 2019 6

Family stress over college § 40. 8% of undergraduate students say they feel stressed about the amount of money they owe 1 § 42% say debt was their biggest concern about applying to or attending college 2 § 27% of parents worry about schools raising tuition 3 § 22% of parents worry that scholarships and grant money will be less available 3 § Only 4 in 10 families planned how to pay for college before the student began attending 3 § One in five families who receive a financial aid award do not feel confident they understand it 3 The Ohio State University, Wellness Assessment 2018 -2019: Financial Wellness, July 2019 Princeton Review, 2019 College Hopes & Worries Survey Report, 2019 3 Sallie Mae. How America Pays for College, 2019 1 2 The 7

Planning ahead is the key § Reduce the worry and the biggest source of stress § Planning helps families access more resources, giving more purchase options § Parents who planned ahead contribute twice as much money toward college from income and savings compared to non-planning parents § Students borrowed less (9% of planners borrowed vs. 20% of non-planners) § Higher understanding of financial aid award package (88% of planners vs. 73% of non-planners) Source: Sallie Mae. How America Pays for College, 2019 8

How to plan for college § 529 College Savings Plan § Coverdell Education Savings Account § UGMA Custodial Account § Financial aid § Permanent life insurance 9

How to plan for college § 529 College Savings Plan § After-tax contributions § Grows tax-free § No income restrictions; may be gifting implications § Parent is typically the account holder § May reduce eligibility for Parent Loans § No tax on distribution if total distributions for the year are less than the amount of adjusted qualified education expenses. * § Tax Cuts and Job Act of 2017 now allows 529 Plans to be used for primary and secondary educational institutions. *See IRS Publication 970 for more information 10

How to plan for college 529 College Savings Plan Pros Diversity Restricted May choose among a range of investments. Must be used for educational expenses. Cons Safety Limited Safeguarding against market downturns. Eligibility for Parent Loans could be limited. 11

529 Plan: Changes could happen Funds 529 to the extent she believes she needs The Implications § If her daughter gets full scholarship, no withdrawals made § If withdrawals are made for other than qualified education expense, they are subject to state and federal income taxes and an additional 10% federal tax penalty on earnings. 1 § If her daughter does not get an expected scholarship § 1 U. S. An under-funded 529 could leave her short Securities and Exchange Commission, An introduction to 529 Plans, https: //www. sec. gov/reportspubs/investor-publications/investorpubsintro 529 htm. html. Accessed Feb 2020. 12

How to plan for college § Coverdell Education Savings Account § Used to be called Education IRA § After-tax contributions § Grows tax-free § No tax on distributions if distributions are not more than the designated beneficiary’s qualified education expenses for that year § Qualified includes primary, secondary, or college § Per Tax Cuts and Job Act of 2017, may be rolled over to 529 Plan 13

How to plan for college Coverdell Education Savings Account Pros Diversity Restricted May choose among a range of investments. Must be used for educational expenses. Cons Taxability Limited No tax on qualified distributions. Eligibility for Parent Loans could be limited. 14

How to plan for college § UGMA Custodial Account § Used to gift assets to minors § The assets are owned by the child – Can be used for any purpose the child desires § Can impact child’s ability to receive financial aid § Benefits the giver for tax and estate reasons § No distribution restrictions 15

How to plan for college UGMA Custodial Account Pros Flexibility Uncontrolled Funds can be used for any purpose the minor chooses. Parent/giver has no control over the use of funds. Cons Taxability Limited Tax advantages for the giver’s estate Can impact child’s ability to receive financial aid. 16

How to plan for college § Financial Aid § Grants or scholarship, loan, or paid employment to help a student meet college expenses § Sources include § Federal and state agencies § Colleges § High schools § Foundations § Corporations 17

How to plan for college Financial Aid Pros Optionality Not Always Free Apply for scholarships, grants, loans or paid employment. One-third comes from federal loans that must be paid back with interest. Cons Manageable Unreliable Fixed lower rates and fees, don’t need good credit or a co-signer. Students are not likely to receive enough grants and scholarships to cover all costs. Sources: https: //www. nysfaaa. org/what-is-financial-aidhttps: //studentaid. ed. gov/sa/types/loans/federal-vs-private J. P. Morgan Asset Management, College Planning Essentials, 2020 18

Federal Financial Aid Eligibility The Department of Education calculates the Expected Family Contribution (EFC), which is used to determine financial aid eligibility. TOTAL COLLEGE COSTS EACH YEAR EXPECTED FAMILY CONTRIBUTION (EFC) PARENTS INCOME HOW EFC IS CALCULATED 1 A family’s annual income, including the student’s, counts far more in the formula than savings and invesments, especially when held in the parents’ names. FINANCIAL AID ELIGIBILITY STUDENTS ASSETS INCOME ASSETS Up to 22%-47% 5. 64%% of adjusted gross income above the protected amount 2 of non-retirement assets above protected amount, including 529 plans, investments and savings 50% 20% of income above protected amount of $6, 660 of all assets in bank accounts, CDs, UGMAs/ UTMAs and any other savings. WHEN TO APPLY Apply as early as October 1 of the year before college, using income and tax information from two years before college. TOTAL EFC is not the amount your family will pay for college or get in federal aid. It’s a number used to calculate how much aid a student is eligible to receive. Families may be expected to pay more than their EFC. GRANDPARENTS/OTHERS 0% of income and assets considered in federal financial aid formulas. However, withdrawals for college by grandparents or others may be considered student income and must be reported on future financial aid forms. Such income can reduce the amount of aid by 50%, two years after distribution. Source: J. P. Morgan Asset Management, College Planning Essentials, 2020 1 Based on federal methodology for 2019– 20 school year. 2 Protected amount for parents is dependent upon a number of factors, including household size and number of students in college. 19

Expected Family Contribution (EFC) Estimates Examples based on income and assets Income has a much bigger impact than assets. COMBINED INCOME ASSETS (EXCLUDING PRIMARY RESIDENCE AND RETIREMENT ACCOUNTS) $0 $25, 000 $50, 000 $100, 000 $150, 000 $200, 000 $250, 000 $300, 000 $50, 000 $2, 241 $2, 740 $3, 400 $4, 856 $6, 684 $8, 925 $11, 672 $14, 492 $75, 000 $7, 734 $8, 197 $9, 406 $12, 226 $15, 046 $17, 866 $20, 686 $23, 506 $100, 000 $15, 880 $16, 946 $18, 356 $21, 176 $23, 996 $26, 816 $29, 636 $32, 456 $125, 000 $23, 676 $24, 742 $26, 152 $28, 972 $31, 792 $34, 612 $37, 432 $40, 252 $150, 000 $32, 005 $33, 071 $34, 481 $37, 301 $40, 121 $42, 941 $45, 761 $48, 581 $175, 000 $40, 409 $41, 475 $42, 885 $45, 705 $48, 525 $51, 345 $54, 165 $56, 985 $200, 000 $48, 689 $49, 755 $51, 165 $53, 985 $56, 805 $59, 625 $62, 445 $65, 265 $225, 000 $56, 403 $57, 469 $58, 879 $61, 699 $64, 519 $67, 339 $70, 159 $72, 979 $250, 000 $64, 116 $65, 182 $66, 592 $69, 412 $72, 232 $75, 052 $77, 872 $80, 692 Example: If you earn $150, 000 in income and have $200, 000 of savings, your estimated EFC is $42, 941. Source: J. P. Morgan Asset Management and fafsa. gov, College Planning Essentials, 2020. Based on two-parent household with one child attending college, one child living at home, all are residents of New York. Assumes no income or assets for each dependent and age 49 for eldest parent. Protected amounts for assets vary based on age and income. These are estimates provided for illustrative purposes only, and they may not be representative of your personal situation and circumstances. 20

How to plan for college § Permanent Life Insurance § Primary purpose is to pay death benefit to beneficiaries § Can accumulate cash value § Grows tax-deferred § If structured correctly, withdrawals can be taken tax-free 1 § No specific limits on contributions. If you over-fund, you run the risk of the policy becoming a Modified Endowment Contract (MEC) 2 § Does not affect eligibility for financial aid § No restrictions on purpose of use Based on current law. Policy loans and withdrawals may be taxable and may decrease the face amount or value of the policy. Please consult an attorney, tax advisor or accountant. 1 The Technical and Miscellaneous Revenue Act of 1988 established a class of life insurance policies termed “Modified Endowment Contracts”. Any life insurance Policy that received monies in excess of prescribed amounts will be classified as a “modified endowment contract”. Whether and when your policy might actually become a MEC depends on the timing and amounts of premium payments and Withdrawals, the policy's non-guaranteed elements, your actual use of the policy's options, and any policy changes made pursuant to your request. The federal income tax consequences of a MEC can be significant. Consult your tax advisor further details. 2 Policy can lapse in the event that excessive loans are taken. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 21

How to plan for college Permanent Life Insurance Pros Self-completing Long-term At premature death of Insured, death benefit provides funds for beneficiary. Needs sufficient time to accumulate cash value. Flexibility and Protection Cons Complex Can be complex and expensive. Can be used for any purpose and can provide protection against market downturns. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 22

Index Universal Life Insurance (IUL) Could an individual pay in $6, 000 per year, have $283, 000 of death benefit and withdraw $80, 000 for college? Situation § 34 -year-old single mother, in good health, with a two-year-old daughter § Needs a solid plan that will provide protection for her daughter § In case something were to happen, an alternative source of funds for college expenses and her own retirement. 1 Not an actual case and is a hypothetical representation for illustrative purposes. The policy values illustrated here are taken from a currently-offered (2/13/2020) index universal life policy from American General Life Insurance Company. Some numbers were rounded for ease of explanation. Numbers will be different for a variety of reasons, including age, gender and underwriting class. All policy values represent current assumptions. A basic illustration will show guaranteed values that will be substantially lower. This assumes that the policy is not a Modified Endowment Contract (MEC) and does not become a MEC. Also note that the policy owner should discuss the use of life insurance as a savings plan with his/her advisor. 1 Policy loans and withdrawals may be taxable and may decrease the face amount or value of the policy. Please consult a professional attorney, tax advisor or accountant. This is not an actual case. This is a hypothetical example is for illustrative purposes only. Policy can lapse in the event that excessive loans are taken. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 23

Index Universal Life Insurance (IUL) Could an individual pay in $6, 000 per year, have $283, 000 of death benefit and withdraw $80, 000 for college? Solution § Purchases an index universal life insurance policy. 2 § Pays an annual premium of $6, 000 until retirement. § In year 17, begins taking tax-free distributions from the policy for 4 years to help pay her daughter’s college expenses. The policy values illustrated here are taken from a currently-offered index universal life policy from American General Life Insurance Company. Some numbers were rounded for ease of explanation. Numbers will be different for a variety of reasons, including age, gender and underwriting class. All policy values represent current assumptions. A basic illustration will show guaranteed values that will be substantially lower. This assumes that the policy is not a Modified Endowment Contract (MEC) and does not become a MEC. Also note that the policy owner should discuss the use of life insurance as a savings plan with his/her advisor. 2 Policy loans and withdrawals may be taxable and may decrease the face amount or value of the policy. Please consult a professional attorney, tax advisor or accountant. This is not an actual case. This is a hypothetical example is for illustrative purposes only. Policy can lapse in the event that excessive loans are taken. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 24

Index Universal Life Insurance (IUL) Could an individual pay in $6, 000 per year, have $283, 000 of death benefit and withdraw $80, 000 for college? Solution § After four years, the mother begins to pay the annual $6, 000 policy premium again until retirement at age 68. § Over the next 20 years, she takes out tax-free funds to supplement her retirement income. 2 The policy values illustrated here are taken from a currently-offered index universal life policy from American General Life Insurance Company. Some numbers were rounded for ease of explanation. Numbers will be different for a variety of reasons, including age, gender and underwriting class. All policy values represent current assumptions. A basic illustration will show guaranteed values that will be substantially lower. If a policy is planned to be a Modified Endowment Contract (MEC), please consult a tax advisor to confirm tax-free eligibility. 2 Policy loans and withdrawals may be taxable and may decrease the face amount or value of the policy. Please consult a professional attorney, tax advisor or accountant. This is not an actual case. This is a hypothetical example is for illustrative purposes only. Policy can lapse in the event that excessive loans are taken. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 25

Index Universal Life Insurance (IUL) Could an individual pay in $6, 000 per year, have $283, 000 of death benefit and withdraw $80, 000 for college? The Benefits § Amount of the policy death benefit varies. The initial death benefit is $283, 000 and stays close to that over time, providing the needed protection for the daughter. § The mother is able to provide $20, 000 per year for college expenses for her daughter, on a tax-free basis 1 and retains control of the funds after the daughter turns 18. There are rules that must be followed in the policy in order to enjoy tax-free distributions from a life insurance policy. A licensed insurance professional can help advise you. If a policy is planned to be a Modified Endowment Contract (MEC), there may be tax implications associated with any withdrawal or policy loan. Please discuss with your tax advisor. This assumes that the policy is not a Modified Endowment Contract (MEC) and does not become a MEC. Also note that the policy owner should discuss the use of life insurance as a savings plan with his/her advisor. 1 Policy loans and withdrawals may be taxable and may decrease the face amount or value of the policy. Please consult a professional attorney, tax advisor or accountant. This is not an actual case. This is a hypothetical example is for illustrative purposes only. Policy can lapse in the event that excessive loans are taken. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 26

Index Universal Life Insurance (IUL) Could an individual pay in $6, 000 per year, have $283, 000 of death benefit and withdraw $80, 000 for college? The Benefits § At age 68, she takes tax-free 1 annual distributions of $59, 000 for 20 years to supplement her own retirement – a total of $1. 18 M. § At age 89, her policy distributions stop and her death benefit is approximately $500, 000. The policy values illustrated here are taken from a currently-offered index universal life policy from American General Life Insurance Company. Some numbers were rounded for ease of explanation. Numbers will be different for a variety of reasons, including age, gender and underwriting class. All policy values represent current assumptions. A basic illustration will show guaranteed values that will be substantially lower. If a policy is planned to be a Modified Endowment Contract (MEC), there may be tax implications associated with any withdrawals or policy loan. This assumes that the policy is not a Modified Endowment Contract (MEC) and does not become a MEC. Also note that the policy owner should discuss the use of life insurance as a savings plan with his/her advisor. 1 Policy loans and withdrawals may be taxable and may decrease the face amount or value of the policy. Please consult a professional attorney, tax advisor or accountant. This is not an actual case. This is a hypothetical example is for illustrative purposes only. Policy can lapse in the event that excessive loans are taken. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 2 27

Start small to meet large goals Public College Child’s current age Total four-year cost 50% 75% Newborn $227, 684 $297 3 $196, 682 6 Private College Monthly investment to pay 100% Total four-year cost Monthly investment to pay 50% 75% 100% $446 $595 $517, 293 $676 $1, 013 $1, 351 $341 $512 $682 $446, 857 $775 $1, 162 $1, 550 $169, 901 $407 $610 $813 $386, 012 $924 $1, 385 $1, 847 9 $146, 767 $516 $773 $1, 031 $333, 452 $1, 171 $1, 757 $2, 343 12 $126, 783 $734 $1, 101 $1, 467 $288, 048 $1, 667 $2, 500 $3, 334 15 $109, 520 $1, 389 $2, 083 $2, 777 $248, 827 $3, 155 $4, 732 $6, 310 Source: J. P. Morgan Asset Management, College Planning Essential, 2020. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 28

How to plan for college § 529 College Savings Plan § Coverdell Education Savings Account § UGMA Custodial Account § Financial aid § Permanent life insurance Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 29

Questions and comments Policies issued by American General Life Insurance Company (AGL), Houston, TX. 19646, ICC 19 -19646; Rider Form Numbers: 13600 -5, 15600 - 7, 15600, ICC 1515600, 15600 -5, 13601, ICC 13 -13601, 82410, ICC 18 -18012, 18012 N, ICC 18 -18004, 14306, 07620, 15997, 15996, 15271, ICC 15 -15271, 15274, ICC 15 -15274, 15272, ICC 15 -15272, 15273, ICC 15 -15602, ICC 15 - 15603, ICC 15 -15604, 15604. Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance company. AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Please refer to your contract. This information is general in nature, may be subject to change, and does not constitute legal, tax or accounting advice from any company, its employees, financial professionals or other representatives. Applicable laws and regulations are complex and subject to change. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant. 30