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S E C U R I T Y B E N E F I T

A Company You Can Trust2 0 1 4 E D I T I O N

A Company You Can Trust

A UNIQUE HISTORY

A LEADER TODAY

STRENGTH IN OUR NUMBERS

“For more than 120 years we’ve been helping people overcome financial challenges and reach their goals. We’ve dedicated ourselves to helping you To and Through Retirement®.”

– Mike Kiley

Thank you for considering Security Benefit for your retirement.

More than 120 years ago, 11 men with $11 formed, what is today, Security Benefit

to provide life insurance coverage for everyday working people. It was a novel idea in

1892, when life insurance was almost exclusively for the affluent. Life insurance for

the working man was followed by several other groundbreaking ideas, including life

insurance for women and being one of the first insurance companies to exclusively

pursue the retirement market.

For more than 40 years, we have focused on helping Americans retire,

especially K-12 educators. Four years ago, we charted the course to transform

from a solid, Midwest specialty retirement company into a market leader in

multiple wealth segments and marketplaces. Today we are a clear leader in several

important market categories.

As of fourth quarter 2013, we were number two in overall fixed annuity sales,

number two in bank market fixed annuity sales, number two in fixed indexed annuity

sales for fourth quarter, and fifth in K-12 education market sales1.

Assets Under Management (AUM), Sales, Net Flows and Capital Surplus were all

at record levels for us in 2013. I’m very proud of not only our continued growth but

that we continue to retain our current customers. All of these metrics speak to the

quality of our products and their performance, our service and the satisfaction of the

financial advisors who recommend our products and our clients.

Helping people prepare for retirement is a noble and worthwhile endeavor. You

have a choice when it comes to the companies and products that will help you

achieve your retirement goals. We appreciate your trust in us to help you retire. You

have helped make Security Benefit the successful company we are today, and we do

not take that for granted. I thank you for giving us the opportunity to serve you, as

does the entire Security Benefit organization.

Michael P. Kiley

Chief Executive Officer

Security Benefit Corporation

1Beacon Research, 2014/01/07 http://www.annuitymarketstudy.com/charts/home. Includes MVA, non-MVA, Indexed and Fixed Income. LIMRA. 403(b) Market Segment, Not-for-Profit Market; First Quarter 2014.


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3As of December 31, 2013. 4As of December 31, 2013. Total Statutory Adjusted Capital represents Total Policyholder’s Surplus plus the Asset Valuation Reserve.

The forward-thinking fraternal society was among the first to accept women as

equals, provide life insurance to everyday people and focus on caring for the

community. These core values served as the foundation upon which Security Benefit

is built today.

Later known as the Security Benefit Association, SBA continued to show its

commitment to helping the community. Members donated nickels to help fund a

mutual cooperative farm, a children’s orphanage, a home for the elderly, a private

school and a hospital. The first dormitory to accommodate children who were

orphans of members was fondly called “The Home That Nickels Built.”

During World War I and World War II, SBA offered expanded coverage to members

who served in the military, despite the financial turmoil the wars caused for the

organization. A Patriotic Fund was created by members to support fellow military members.

After World War II, SBA evolved from a fraternal society to Security Benefit Life

Insurance Company (Security Benefit Life), a mutual reserve life insurance company.

In the 1960s and ’70s, we were an early entrant in the U.S. retirement market and

introduced one of the first Variable Annuities (VAs) in the country. Around that same

time, the organization began focusing on the retirement savings market for education

and public employees. Eventually, the organization was named the provider of

retirement savings products for the National Education Association (NEA).

Success in retirement markets led to greater emphasis in this rapidly growing

sector. Over the 1980s and ’90s, we exited the life, health and disability markets and

became one of the first insurance companies to focus fully on retirement. Then in

2010, we were acquired by an investor group led by Guggenheim Partners.

Impressive strides have been made. Over the last three years, the company has

either been affirmed or upgraded on four consecutive occasions by S&P® and on

three consecutive occasions by A.M. Best, while during this same timeframe many

within the industry were downgraded. We believe this speaks to the success we are

pursuing and experiencing.

Security Benefit Life’s 2013 Total Policyholder’s Surplus was more than

$1 billion3; our Total Statutory Adjusted Capital4 was more than $1.2 billion. This

level reinforces our confidence that our obligations to our customers will continue

to be paramount, just as they have for the last 122 years. With that as our focus,

we are committed to helping our customers meet their retirement goals.

In a small Topeka, Kansas, drugstore in 1892, Dr. H.A. “Doc” Warner encouraged 11 men to contribute

$1 each to help form “The Knights and Ladies of Security.”

A Unique History

Secur i t y Benef i t

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“The Home That Nickels Built.”

Men hold signs promoting the Knights and Ladies of Security insurance company, founded in 1892.

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A Leader Today

Security Benefit – A Company You Can TrustSecurity Benefit Corporation is a leader in the U.S. retirement market. Security

Benefit Corporation serves multiple wealth segments and channels of distribution

through our commitment to a more focused, effective and strategically driven

distribution structure.

With a strong vision, we have grown rapidly over the last few years to take a

leadership position in a number of important markets.

Our history and strength lie in specialty markets (as illustrated in our history on

page 4). We took that core capability and strength and applied it to expanding our

presence to the full range of retirement markets and wealth segments. With these

strategies in place, we have experienced tremendous growth over most of our peers.

By leveraging the superior general account management capabilities of

Guggenheim Investments, the investment management business of Guggenheim

Partners, we are able to provide you highly competitive products and rates through

select independent financial advisors to address your retirement needs. Learn more

about Security Benefit by visiting SecurityBenefit.com.

$24.8 Billionaum

Mutual Fund Custodial Accounts

$3.8 Billion

SBL Separate Account

$6 Billion

SBL General Account

$15 Billion

Security Benefit – Consolidated Assets Under Management5

5As of December 31, 2013.


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About Guggenheim Partners Guggenheim Partners is a privately held global financial services firm with more than

$200 billion in assets under management.6 The firm provides asset management,

investment banking and capital markets services, insurance services, institutional

finance and investment advisory solutions to institutions, governments and agencies,

corporations, investment advisors, family offices and individuals.

ȥ $200 billion assets under management6

ȥ $122 billion institutional fixed income7

ȥ $89 billion insurance company general account assets7

Guggenheim Investments is the investment management business of

Guggenheim Partners. Guggenheim’s overall goal is to deliver superior risk-adjusted

returns to protect and grow the clients’ capital. Within each mandate, they recognize

that clients often have specific requirements for income, yield and duration, among

other objectives.

Guggenheim Investments’ investment management expertise is demonstrated

through its industry-wide recognition and accolades. This attribute, coupled with

Security Benefit Life’s retirement product success, make Security Benefit and

Guggenheim Partners a successful example in the area of insurance services.

Guggenheim Partners is dual-headquartered in New York and Chicago and serves

clients around the world from more than 25 offices in eight countries. For more

information, please visit www.guggenheimpartners.com.

6Assets under management are as of December 31, 2013, and include consulting services for clients whose assets are valued at approximately $36 billion. 7As of December 31, 2013.

A Leader Today

Guggenheim Partners – Assets Under Management

$200 Billion6

Assets Under Management

$122 Billion7

Institutional Fixed Income

$89 Billion7

Insurance Company General Account Assets


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“Security Benefit ranks second in indexed annuity sales.”

– Wink’s Sales and Market Report8

8Wink’s Sales and Market Report, Q4, 2013.

Today, Security Benefit Life is a leader in the U.S. retirement market with $20.7 billion in statutory

assets9 – a 34% increase in asset growth over 2012.

Our financial strength can also be seen in Security Benefit Life’s solvency ratio,

which was 105.3% on December 31, 2013. (See chart on page 11.) Solvency, a

financial-strength measurement, is the ability of a corporation to meet its financial

obligations, both short-term and long-term. For an insurance company, such

obligations include the benefits it has

agreed to pay its customers, such as

the living or death benefits on annuity

contracts. There are numerous ways

to measure an insurer’s solvency or

financial strength, some objective

and some subjective. Solvency ratio is one of these measures. Other measures

include Return on Assets (ROA), Return on Equity (ROE), cash flow, liquidity and

diversification of investments.

Solvency ratios take all of an insurer’s assets (both general and separate

accounts) and divide that number by its total liabilities. The quality of the assets,

liquidity, diversification and other factors are not included in the ratio. In addition,

liabilities may fluctuate daily. We are pleased with SBL’s strong solvency ratio.

We encourage those interested in SBL’s financial position to review our

statutory financial information on our website (SecurityBenefit.com). You can also

receive copies of SBL’s statutory and GAAP financial statements by calling us at

800.888.2461.

9As of December 31, 2013. Statutory Assets reflect only those of Security Benefit Life and not affiliates.

2013 Statutory Revenues: $6.741 billion9

2013 Total Policyholder’s Surplus: $1.245 billion9

Strength in Our Numbers


10

10S&P® Ratings taken from StandardandPoors.com as of March 13, 2014. A.M. Best Ratings taken from A.M. Best Global Insurance Database as of March 13, 2014. Sorted by solvency ratio within ratings category as of March 13, 2014, as provided by A.M. Best Global Insurance Database. Solvency ratio as provided by A.M. Best as of December 31, 2013.11Solvency ratios take all of an insurer’s assets (both general and separate accounts) and divide that number by its total liabilities. The quality of the assets, liquidity, diversification and other factors are not included in the ratio. In addition, liabilities may fluctuate daily.

Security Benefit Life as compared to those considered our peer insurance companies.10

S&P® Rating

A.M. Best Rating

Solvency Ratio11

Security Benefit Life Insurance Company A- B++ 105.3%

Great American Life Insurance Company A+ A 108.10% Insurance

companies with

an A.M. Best

rating of ‘A’

have a median

solvency of

106.19%.

Symetra Life Insurance Company A A 107.38%

Variable Annuity Life Insurance Company A+ A 106.65%

Life Insurance Company of the Southwest A A 106.19%

Horace Mann Life Insurance Company A A 105.39%

Allianz Life Insurance Company of North America AA A 104. 41%

ING Life Insurance and Annuity Company A- A 102.40%

Midland National Life Insurance Company A+ A+ 107.35% Insurance

companies with

an A.M. Best

rating of ‘A+’

have a median

solvency of

103.00%.

Pacific Life Insurance Company A+ A+ 106.34%

MetLife Investors Insurance Company AA- A+ 104.69%

Lincoln National Life Insurance Company AA- A+ 103.54%

Metropolitan Life Insurance Company AA- A+ 103.44%

Nationwide Life Insurance Company A+ A+ 103.03%

Principal Life Insurance Company A+ A+ 102.97%

Jackson National Life Insurance Company AA A+ 102.73%

Pruco Life Insurance Company AA- A+ 102.48%

AXA Equitable Life Insurance Company A+ A+ 102.47%

Great-West Life & Annuity Insurance Company AA A+ 102.39%

Prudential Retirement Ins & Annuity AA- A+ 101.22%

Our Financial Strength Today

The ratings of SBL and other companies are shown in the chart below. The purpose

of the ratings is to reflect the financial strength of the insurer and should not be

considered to have a bearing on the investment performance of assets held in

any SBL separate account. Rating agencies take many factors into account when

assigning a financial strength or claims-paying rating to an insurer. For a more

complete understanding of the reasons for the ratings assigned to SBL, please refer

to the ratings assessment of SBL.


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“Security Benefit ranks third in overall fixed annuities sales.”

– ThinkAdvisor12

12ThinkAdvisor, Top 20 Companies for Annuity Sales: 2013, March 17, 2014.

13As of March 31, 2014.14As of August 8, 2014

Ratings Strength Over the last four years, Security Benefit has either been affirmed or upgraded

on four consecutive occasions by S&P® and on three consecutive occasions

by A.M. Best, while during this same timeframe many within the industry were

downgraded. We continue to work closely with these industry groups in the

belief that our significant and strategic

growth will be recognized through

additional ratings upgrades.

While others in the industry are

either pulling back or retreating from the

market, Security Benefit is growing. We

are adding staff and developing new products to help you meet your retirement goals.

With a strong ratings outlook and financial footing, Security Benefit is optimistic

about the future.

Our Financial Strength Today

A- Strong

B++Good

S&P® Rating13 A.M. Best Rating14

While others in the industry are either pulling back or retreating from the market, Security Benefit is growing.


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Conservative Long-Term Bond Portfolio

Security Benefit Life General Account Long-Term Bonds Portfolio Allocation15

2014

35.2%Asset-Backed

SecuritiesResidential Mortgage-

Backed SecuritiesInvestment Grade

CorporatesGovernment Municipal Bonds

9.7% 23.2% 8.2% 4.2%

6.5%Commercial Mortgage-

Backed SecuritiesPrivate

Placement BondsHybrid Other Total

6.6% 0.6% 5.7% 100%

National Association of Insurance Commissioners (NAIC) Ratings of Our Portfolio

Security Benefit Life General Account Long-Term and Short-Term Bonds and Preferred Stock Quality Allocation16

52.6%NAIC 1 (Aaa/Aa/A) NAIC 2 (Baa) NAIC 3 (Ba) NAIC 4 (B)

42.7% 2.8% 1.2%

0.7%NAIC 5

(Caa & lower)NAIC 6

(In or near default)

0.0%Total100%

2014

15As of December 31, 2013. Includes long-term bond assets only. 16As of December 31, 2013. Fixed maturity securities by NAIC.

A Conservative General Account Portfolio


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Retire Confidently

Let Security Benefit help you work toward your goal of a

comfortable and secure retirement. We offer a range of

retirement solutions including:

ȥ Tax-deferral savings products17

ȥ Guaranteeing a stream of income you cannot outlive18

ȥ Access to your money when you need it19

Services are offered through and securities are distributed by Security Distributors, Inc.

(SDI), a subsidiary of SBL, which is wholly owned by Security Benefit Corporation

(“Security Benefit”).

17 Withdrawals are subject to ordinary income tax and, if made before age 59½, may be subject to a 10% IRS penalty tax. 18 Guarantees are subject to the claims-paying ability of the issuing insurance company. 19 Depending on the product, early withdrawals will be subject to a surrender charge, bonus recapture and/or market

value adjustment.

38-10670-01 2014/08/15

T O A N D T H R O U G H R E T I R E M E N T

One Security Benefit Place | Topeka, Kansas 66636-0001 | SecurityBenefit.com

Ask your Financial Professional if a Security Benefit product

could be right for you and let us help you

To and Through Retirement®.

800.888.2461

Security Benefit’s history, financial strength, and innovative products make us a wise choice to help you

To and Through Retirement® .

A N N U I T I E S • M U T U A L F U N D S • R E T I R E M E N T P L A N S

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