National Life Reports Record Gains and Strong Financial Results in 2005

(March 1, 2006) National Life Group achieved strong financial results in 2005, management has reported, including record levels in net income, total assets and total equity, and solid investment performance.

Net income on a consolidated basis, including all the companies within National Life Group, was $97.5 million, a 13% increase over the previous year. The major contributors to the strong results, according to company management, were growth in business, strong investment returns, as well as favorable mortality results.

Sales were down from the previous year, with the exception of annuity sales in which there was an increase. Despite the one-year decline in consolidated sales, however, aggregate National Life Group sales have experienced a compound annual growth rate of 15% over the past ten years, with sales coming from an increasingly diversified distribution sources, the company’s management said.

National Life Group’s total gross revenue in 2005 exceeded the $1 billion level for the eighth consecutive year, reaching $1.3 billion. The company paid over $363 million in policy benefits, $231 million in interest credited on policies and contracts and more than $116 million in dividends to policyholders.

Assets of National Life Group reached a record $14 billion in 2005, and total assets under management – including the assets managed by Sentinel Asset Management, Inc. – rose to $18.3 billion. The company’s total equity rose by $31 million to a record high of $1.3 billion, fueled by net income but partially offset by a decline in the market value of the company’s bond portfolio due to higher interest rates.

“Overall, 2005 was a year of significant achievement and continuing improvement in the company’s financial performance,” said National Life Group Chairman and CEO Thomas H. MacLeay. “Our goals in 2006 are to build on those strong results and continue to bring high quality products and services to the marketplace. With 155 years of strength behind us, we look forward to many more years of meeting the needs of our customers.”

National Life Group is made up of the flagship company, National Life Insurance Company, founded in Montpelier in 1850, Sentinel Asset Management Inc., Equity Services, Inc., Life Insurance Company of the Southwest of Dallas, Texas, and American Guaranty &Trust of Wilmington, Delaware.