We are not familiar with the intricacies of all of the LEAP moves. We are familiar with some of the basic concepts. When using LEAP moves, you should:

• Make sure the client clearly understands the move and why he is making the move.


• Use extra care whenever you are suggesting that a client move money out of a qualified plan or defer making contributions to a qualified plan in order to buy permanent life insurance. We recognize that there are circumstances where it may make sense for a client to use money from a qualified plan to purchase permanent life insurance. However, any move involving qualified money should be carefully reviewed. It may be useful in such a situation to involve the client's tax adviser or accountant.


• As with any selling system, the use of current tax laws, interest rates, investment returns, inflation, etc., are variables which are not guaranteed and cannot be accurately predicted over time. Please keep in mind that a LEAP client should sign the disclaimer on the reverse side of the PS & G Model Worksheet, according to the instructions provided to advisers in LEAP training.


• Make sure your clients have sufficient liquidity to meet any short-term objectives at all times when making LEAP Moves.

3. Securities Laws

The LEAP System materials should not be used to solicit the sale of variable products. On the other hand, you may make a LEAP sales presentation to explain the need for permanent life insurance or to find untapped financial resources. Subsequently, if a variable product is to be discussed, only approved broker/dealer materials should be used. Let us emphasize this — you should not use the LEAP System with the express intention to sell a variable product, and you should not directly tie the two together.

A second issue relating to securities is whether an agent using the LEAP System needs to be registered as a registered investment adviser. If you are charging separately for your consulting services, then the answer is probably "yes". If you are not charging separately for adviser services, you may be able to use the LEAP selling system without being registered as a registered investment adviser. If you have any concerns on that subject, consult with your personal attorney or ask your state securities department.

If you have any questions about this memorandum, call or e-mail Mike Haverkamp in our Legal Department. His telephone number is 513-794-6473. If you are interested in more information about how to become a LEAP licensee, contact LEAP Systems, Inc. at 908-231-1511 or at www.leapsystems.com.