Pension Protection Act

GUARANTY INCOME LIFE INSURANCE COMPANY

Press Release

Guaranty Income Life Praises the New Pension Protection Act

August 18, 2006, Baton Rouge, Louisiana - Guaranty Income Life Insurance Company ("GILICO") praises the new law that provides tax benefits for long-term care ("LTC") insurance and growth for AnnuiCare®. President Bush signed into law on August 17 the "Pension Protection Act (HR-4)" ("PPA") calling it "the most comprehensive reforms to America's pension system in over 30 years."

This massive legislation redefines the rules for pension plans and could save taxpayers from funding a multibillion dollar bailout of the Pension Benefit Guaranty Association.

With its over 900 pages, the bill seeks to strengthen traditional defined-benefit plans and requires companies to tell workers more about the financial status of their pension programs. It also encourages workers to save more money for their own retirement.

The PPA aims to boost the 30,000 defined-benefit plans run by employers that are now underfunded by an estimated $450 billion. Those plans must reach 100 percent funding, up from the current 90 percent requirement, in seven years. Airlines get ten years to meet their funding obligations.

To the benefit of all taxpayers, lawmakers hope the bill puts the Pension Benefit Guaranty Corp. on more stable financial footing. The federal agency, which insures pension plans, has current deficits of $22.8 billion, stemming mainly from taking over defunct steel and airline plans.

A major benefit of the "PPA legislation" includes tax free funding for the purchase of LTC benefits that are included as riders with life and annuity products.

GILICO President, John Lancaster, stated, "The acknowledgement of Annuity/LTC Combo Products as an excellent funding method for LTC insurance has been our goal for seven years! Guaranty Income Life was the first provider of the Annuity/LTC Combo Product following the passage of HIPAA in 1996. AnnuiCare® was the original qualified LTC rider to be attached to an annuity product. Prior to the passage of the PPA, premiums for LTC were paid with withdrawals from the annuity contract and were taxable to the policy owner. Beginning with tax years after 2009 for all new and in force combo policies, the premiums will no longer be taxable! This fabulous tax benefit, along with the Deficit Reduction Act signed in February 2006, emphasizes Congress's intent to tighten up Medicaid provisions and provides an incentive for Americans to consider private LTC insurance for their needs, rather than depend on the federal government to pay nursing home bills for them."

Guaranty's Web site www.GILICOlink.com provides information on AnnuiCare® and helps agents learn about this fabulous product that was just made even better.

Guaranty Income Life Insurance Company was founded in 1926 and is a Legal Reserve Insurance Company currently licensed in 31 states. In addition to cost-effective life insurance, long-term care and annuity programs, Guaranty offers products and services to help families meet their financial needs of wealth protection and wealth creation today and in the future.

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