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Torchmark Corporation

Torchmark Corporation. Insurance Investor Conference February 24, 2009. Net Operating Income Per Share. 10-Year Compound Annual Growth Rate – 9.3%. $6.00 5.00 4.00 3.00 2.00 1.00 0. 5.80. 5.45. 4.99. 4.59. 4.23. 3.87. 3.51. 3.21. 2.94. 2.64.

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Torchmark Corporation

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  1. Torchmark Corporation Insurance Investor Conference February 24, 2009

  2. Net Operating Income Per Share 10-Year Compound Annual Growth Rate – 9.3% $6.00 5.00 4.00 3.00 2.00 1.00 0 5.80 5.45 4.99 4.59 4.23 3.87 3.51 3.21 2.94 2.64 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Torchmark Corporation 2

  3. Underwriting Torchmark Corporation 3

  4. Underwriting Income 2008 ($ in millions) Life U/W Share of Premium Inc. U/W Inc. Health U/W Share of Premium Inc. U/W Inc. TotalLife and Health U/W Share of Premium Inc. U/W Inc. American Income Direct Response Liberty National Military UA Independent UA Branch Other Total $474 $128 38% 511 92 27% 287 53 15% 201 43 13% 32 1 0% 17 3 1% 95 20 6% $1,617 $340 100% $73 $23 19% 45 3 3% 135 28 24% 0 0 0% 357 39 33% 341 25 21% 0 0 0% $951 $118 100% $547 $151 33% 556 95 21% 422 81 18% 201 43 9% 389 40 9% 358 28 6% 95 20 4% $2,568 $458 100% Underwriting Income is premium and other operating income less policy obligations, commission and other acquisition and administrative expenses. Torchmark Corporation 4

  5. Net Life Sales ($ in millions) Net Sales Change from Year-Ago Quarter 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 $62.4 67.4 66.1 68.3 70.5 76.0 75.0 77.0 (8% ) (5% ) 1% 12% 13% 13% 13% 13% Torchmark Corporation 5

  6. Investments Torchmark Corporation 6

  7. Investment Portfolio at 12/31/08 ($ in millions) Amortized Cost % of Total Industry Fixed Maturities Equities Mortgage Loans Investment Real Estate Policy Loans Other Long-Term Investments Short-Term Investments TOTAL $9,610 17 17 2 360 53 131 $10,190 94% 0% 0% 0% 4% 1% 1% 100% 78% 3% 10% 1% 4% 3% 1% 100% Torchmark Corporation 7

  8. Fixed Maturities by Type 12/31/08 ($ in millions) Amortized Cost Net Unreal. Gain (Loss) Average Rating % of Total Amortized Cost Corporates $7,463 $(1,188 ) BBB+ 78% Redeemable Preferred Stock: U.S. 1,334 (384 ) BBB+ 14% Foreign 115 (52 ) BBB+ 1% Municipals 261 (44 ) AA 3% Government-Sponsored Enterprises 202 (8 ) AAA 2% Government & Agencies 23 2 AA+ 0% Residential Mortgage-Backed Securities 23 2 AAA 0% Commercial Mortgage-Backed Securities 17 0 AAA 0% CDO’s 131 (117 ) A- 1% Other Asset-Backed Securities 41 (4 ) A- 0% TOTAL $9,610 $(1,793 ) BBB+ 100% Torchmark Corporation 8

  9. Net Unrealized Losses Fixed Maturities ($ in millions) • Net Unrealized Losses: • 12/31/08 $1,793 • 06/30/08 670 • Increase in Unrealized Losses* $1,123 • *% of Increase in Unrealized Losses • From Fixed Maturities With: • No Change in Rating 74% • One Notch Downgrade 18% Torchmark Corporation 9

  10. Fixed Maturities by Sector 12/31/08 ($ in millions) Amort. Cost Net Unreal. Loss Average Rating % of Total Amort. Cost Financial – Life/Health/PC Insurance $1,764 $(494 ) BBB+ 18% Financial – Bank 1,659 (328 ) A 17% Financial – Other 508 (185 ) BBB+ 5% Utilities 1,105 (60 ) BBB+ 11% Transportation & Other Industrials 831 (82 ) BBB+ 9% Energy 793 (96 ) BBB 8% Consumer – Non-cyclical 644 (54 ) BBB+ 7% Consumer – Cyclical 471 (117 ) BBB 5% Communications 600 (103 ) BBB- 6% Basic Materials 578 (107 ) BBB 6% Other 657 (167 ) AA 7% TOTAL $9,610 $(1,793 ) BBB+ 100% Torchmark Corporation 10

  11. Fixed Maturities by Rating ($ in millions) Amortized Cost Net Unreal. Loss % of Amortized Cost to Total TMK Industry Investment Grade: AAA $492 ($9 ) 5% AA 442 (27 ) 5% A 3,366 (511 ) 35% BBB 4,597 (995 ) 48% 25% 8,897 (1,542 ) 92.6% 94% Below Investment Grade: BB 470 (150 ) 5% 3% B 131 (50 ) 1% 2% Less Than B 112 (51 ) 1% 1% 713 (251 ) 7.4% 6% TOTAL $9,610 ($1,793 ) 100% 100% } 69% Torchmark Corporation 11

  12. Capitalization and Liquidity Torchmark Corporation 12

  13. Capitalization 12/31/08 ($ in millions) Insurance Company Risk Based Capital Capital $1,281 Required Capital $389 Company Action Level RBC 329% Corporate Debt to Capital Commercial Paper $304 7.0% Senior Debentures & Notes 602 13.9% Trust Preferred 120 2.7% Total Debt $1,026 23.6% Equity, Excluding FAS 115 3,318 Total Capitalization $4,344 Torchmark Corporation 13

  14. Insurance Companies Net Cash Flow ($ in millions) 2008 2009 E Cash From Operations Insurance Underwriting $485 Excess Investment Income 608 Income Taxes and Parent Expenses (180) $494 608 (171 ) Net Cash From Operations $931 $940 - $960 Investment Maturities 587 587 600 Net Cash Flow $1,518 $1,540 - $1,560 Torchmark Corporation 14

  15. Parent Company Free Cash Flow ($ in millions) 2008 2009 E Insurance Companies: Net Cash Flow $1,518 Less Cash Retained 1,081 Cash Dividended to TMK $437 Torchmark Parent Company Dividends Received From Insurance Companies $437 Less Cash Outflow: Interest Expense 62 Dividends to Shareholders 49 Other, Net (17 ) Net Outflow $94 Free Cash Flow $343 $320 - $330 Torchmark Corporation 15

  16. 2009 Debt Maturities ($ in millions) • Cash Needed for 2009 Debt Maturities: • Commercial Paper $305 • Senior Notes Due 8/09 99 • $404 • Sources of 2009 Debt Repayment • > Preference is to Refinance • > Sources of Cash if Refinancing Terms Aren’t Favorable • 2009 Free Cash Flow $325 • Loans From Subsidiaries 390 • Issuance of Preferred Shares to Subs 335 • Draw Down Bank Line 400 • Other Sources 400 • $1,850 Torchmark Corporation 16

  17. Long-Term Debt Maturities ($ in millions) Maturity Schedule $300 250 200 150 100 50 0 $250 $166 $120 $99 $94 ’09 ’11 ’13 ’15 ’17 ’19 ’21 ’23 ’25 ’27 ’29 ’31 ’33 ’35 ’37 > Torchmark Corporation 17

  18. Share Repurchases Torchmark Corporation 18

  19. Share Repurchases Year Average Price No. of Shares (in 000’s) PE Ratio 2009 * 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 $29.45 $55.86 $65.39 $57.47 $53.15 $51.39 $38.17 $37.82 $37.25 $23.22 $32.50 $36.63 500 7,638 6,150 5,575 5,647 5,221 5,902 4,817 4,265 5,806 5,398 3,436 4.7 – 4.9 9.6 12.0 11.5 11.6 12.1 9.9 10.8 11.6 7.9 12.3 15.4 * Information based on transactions thru 2/17/09 and management’s guidance for 2009 operating income per share. Torchmark Corporation 19

  20. Summary Core Operations •Steady earnings per share growth • Straightforward protection coverage – minimal exposure to variable annuities • Double-digit growth in life sales • Strong growth in agent recruiting at Liberty National and American Income • Stable persistency in life business Investments •Primarily investment grade fixed maturities • Little exposure to equities, mortgages, real estate • No direct exposure to subprime or Alt A mortgages • No credit default swaps or other derivatives • Ratio of invested assets to equity is 3X versus peer average of 7X Capitalization and Liquidity •Well capitalized • Strong and consistent free cash flow • More than sufficient liquidity to retire debt Share Repurchase Program •Still the best use of free cash flow along with possible retirement of debt • Program will be continued prudently Torchmark Corporation 20

  21. This presentation may contain forward-looking statements within the meaning of the federal securities laws. These prospective statements reflect management’s current expectations, but are not guarantees of future performance. Accordingly, please refer to Torchmark’s cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company’s Form 10-K for the period ended December 31, 2007, and subsequent Forms 10-Q, on file with the Securities and Exchange Commission, and on the Company’s web site at www.torchmarkcorp.com on the Investor Relations page. Torchmark specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise. This presentation contains certain financial measures that differ from the comparable GAAP measures. Reconciliations between the non-GAAP measures and the comparable GAAP measures may be found on the Company’s web site at www.torchmarkcorp.com on the Investor Relations page under SEC filings (form 10-K for 2007) and subsequent quarterly earnings press releases. Torchmark Corporation 21

  22. Torchmark Corporation

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