2015 ANNUAL REPORT

2015 Financial Highlights

Quality Investments

Assets are invested primarily in high-quality, low-risk investments. As of Dec. 31, 2015, approximately 99.5 percent of bonds were of high or medium quality.

Mortgage Loans and Real Estate

Bonds

Certi�cate Loans, Cash and Other Assets

Common Stocks

84%

5%

7%

4%

2011 2012 2013 2014 2015

$14.0

$13.5

$13.0

$12.5

$12.0

$11.5

$11.0

$10.5

$10.0

$9.5

$9.0

$8.5

$8.0

$7.5

$12.39

$11.51

$14.75

$13.40

$14.13

Modern Woodmen’s increasing asset base is a strength.

Growth in AssetsDollars in billions

Fraternal expenditures for the year reflect strong usage of benefits and programs by members.

2011 2012 2013 2014 2015

$19.72$19.20

$19.83$20.04

$19.03

$20.5

$20.0

$19.5

$19.0

$18.5

$18.0

$17.5

$17.0

$16.5

$16.0

$15.5

$15.0

$14.5

$14.0

$13.5

$13.0

$12.5

Fraternal ExpendituresDollars in millions

$38

$37

$36

$35

$34

$33

$32

$31

$30

2011 2012 2013 2014 2015

$37.27

$38.07

$36.32

$35.53

$34.26

Life insurance in force shows consistent growth and increased protection for members.

Life Insurance in ForceDollars in billions

Adding value

The numbers in our annual report for 2015 are important.

The financial facts show strength, commitment and the ability

to serve our members for many years to come. But at Modern

Woodmen, we aim to make sure the dollars don’t just add up;

they add value.

The dollars you entrust to our care are invested in your future …

and your children and grandchildren’s future.

• Life insurance and retirement plan benefits for your family.

• Quality-of-life enhancements for your community.

• Personalized service through a local financial representative to

help you make the right decisions for yourself and your future.

• Meaningful local events and fraternal benefits for members.

• Upgraded technology and resources to better serve you for the

next decade or longer.

Ever-changing to meet your needs, we remain committed to

providing the service that adds value and makes you a member,

not a customer, of Modern Woodmen of America.

W. Kenny Massey

President and CEO

Adding value

Modern Woodmen of America | Adding Value 3

Our CreedThere is a destiny that makes us brothers; None goes his way alone;All that we send into the lives of others. Comes back into our own.

Edwin Markham circa 1939

Our VisionModern Woodmen of America will grow nationwide through members helping members create a better tomorrow for themselves, their families and others.

Our MissionTo improve the quality of lifefor our members.

2 2015 Annual Report

Board of Directors

Lori A. Newberg | Director, Lenexa, Kansas

William D. Keltner | Director, Jackson, Tennessee

David B. Emrick | Director, Davenport, Iowa

Robert C. Pollex | Director, Perrysburg, Ohio

W. Kenny Massey | President, LeClaire, Iowa

Gary L. Medd | Director, Davenport, Iowa

Jerald J. Lyphout | National Secretary, East Moline, Illinois

Albert T. Hurst Jr. | Director, Little Rock, Arkansas

Darcy G. Callas | Director, Moline, Illinois

From left to right

In America, approximately 1 in 7 households experiences food insecurity. For American households with children, the statistic jumps to nearly 1 in 5. (USDA Economic Research Service)

Over the past two years, Modern Woodmen has organized

meal-packing events with employees and financial

representatives throughout the country in an effort to address

food insecurity in the United States.

In total, 648,000 meals were packed by 2,300 Modern Woodmen

volunteers through 67 events – all for one important cause.

In 2016, the Knock Out Hunger project will take on new life

through Modern Woodmen chapters.

4 2015 Annual Report Modern Woodmen of America | Adding Value 5

Knock Out Hunger project

648,000 meals packed to tackle hunger in America

Chapters- 2,791 Modern Woodmen chapters were active nationwide.

- 891,971 members attended the chapters’ family-oriented social, educational and volunteer events.

- 284,005 hours of volunteer service were performed by members through chapters across the nation.

Summit Chapters- 274 Summit chapters were active in 2015.

- 50,857 members age 55 and older participated in Summit chapter events.

- 11,584 hours of volunteer service were provided to communities through Summit chapters.

Youth Service Clubs- 746 youth service clubs were active across the nation.

- 142,383 hours of volunteer service were performed by youth club members.

Care and Share/Help A Child Program- $234,154 was contributed by chapters and youth clubs to help adults, children and families in need.

Good Neighbors/Community Beautification- $534,052 was reimbursed for materials chapter and youth club members used to complete hands-on community-improvement projects.

Make A Difference Day- 1,538 volunteer projects were completed on this national day of community service.

- $75,371 was reimbursed for materials.

Matching Fund Program- 2,866 fundraising events were held.

- $14.6 million was contributed to community projects, local organizations and individuals in need.

Plant A Tree Program- 1,417 trees were planted by chapter and youth club members.

Youth Educational Programs- 1.3 million children participated in 22,424 programs on exercise and nutrition, financial literacy, and more.

Make an impact It’s never been more fun to be a Modern Woodmen member!

Through Modern Woodmen’s Make An Impact initiative, we’re offering a wider variety of activities to help you and your family volunteer, socialize and learn with Modern Woodmen.

Enjoy meaningful, hands-on fraternal opportunities in your community by participating in a Modern Woodmen chapter, Summit chapter or youth service club event. Join us for one event, or every event! And let your local leaders know what fun ideas you have to make an impact in your area.

Matching Fund Program Contributions to community causes reached $14.6 million in 2015.

Modern Woodmen’s Matching Fund Program donates more than dollars to the communities where members live, work and play. Members like you volunteer through local chapter, Summit chapter and youth service clubs to identify local organizations and individuals in need. Then they help plan and participate in fundraising events, such as bake sales, barbeques, silent auctions, spaghetti dinners and more.

Modern Woodmen’s home office matches the money raised at each qualifying event, up to $2,500, to make an even bigger impact. In 2015, member chapters and clubs supported 2,866 fundraising events, helping contribute a total of $14.6 million.

Member activitiesSocial, educational and volunteer events add value in local communities

Carbon Monoxide Detection Kit - 4,270 kits were distributed to help members detect this potentially deadly gas in their homes.

College Scholarship Program - $441,000 was awarded to 260 member students.

Final Wishes - 2,491 members received the Final Wishes interactive resource containing resources to help them plan for and communicate their final wishes to loved ones.

Fraternal Aid Fund - $174,922 in premiums were paid on 1,219 certificates for members who experienced hardships due to medical, fire or natural disasters.

Life Line Screening Program - 2,083 members ages 50 to 80 participated in a Life Line Screening in their local communities.

MedicAlert Membership- $4,740 in initial membership fees were paid for participants in this life- saving identification program.

National Park Pass - 25 members received partial reimbursement of fees associated with the America the Beautiful National Parks and Federal Recreation Lands Senior Pass.

Newborn Benefit- $50,000 of life insurance was issued to parents of infants in poor health.

Orphan Benefit- $85,550 in financial support benefited 28 orphaned members for their care and education.

Prescription Savings Card- 10,860 prescriptions were filled for members without access to preferred prescription drug pricing.

- $28.85 was the average savings per prescription.

- $200,864 was the total savings for members in 2015.

Member benefitsFraternal benefits add value for individuals and families

New Anytime Fitness® benefit Discounts on enrollment fees and dues

Modern Woodmen members can now receive discounted access to more than 2,100 Anytime Fitness® centers nationwide. You can receive a 50 percent discount on enrollment fees and a 10 percent discount on monthly dues.

Facilities are open 24 hours a day, seven days a week. After joining, members can use any Anytime Fitness facility across the nation at no extra cost. Modern Woodmen members can also receive a free seven-day guest pass.

Children and adolescents

Single adults

Fraternal Aid Fund Benefit preserves coverage in time of need

Flooding in South Carolina and along the Mississippi River in 2015 was devastating. It’s also the type of disaster Modern Woodmen’s Fraternal Aid Fund was designed to, and did, help members endure.

Members who suffer a financial hardship due to serious illness, an accident, fire or natural disaster may qualify for premium payment assistance. For a limited time, Modern Woodmen will cover qualifying members’ premiums to help them keep valuable life insurance coverage in force. Requests are granted on the basis of need and the inability to pay premiums.

6 2015 Annual Report Modern Woodmen of America | Adding Value 7

Families

50 and older

100 Percent Modern Woodmen Family Benefit - 12,298 qualifying children ages 1 to 16 received a free age-appropriate book for their birthdays.

Accelerated Benefits- $88,166 in premiums and interest were paid for terminally ill members.

Beltone Hearing Care- Two members took advantage of the discounts and services provided by Beltone.

Modern Woodmen offers a variety of fraternal member benefits relevant to today’s members for all life stages.

Benefits for all ages

Modern Woodmen has a solvency ratio of 112.09 percent. This means that for every $100 of liabilities (promises made to members), Modern Woodmen has $112.09 of assets to back up those promises.

In comparison to Modern Woodmen’s strength, the industry average is a solvency ratio of 105.65, or $105.65 of assets for every $100 of liabilities. This is calculated from the 25 leading life insurance companies by assets. (Standard Analytical Service, Inc., 2015)

Fraternal programs support communities nationwideModern Woodmen’s national membership totals more than 765,000 members. In 2015, Modern Woodmen contributed more than $19.2 million to support family-oriented member benefits and programs. These benefits and programs include disaster relief assistance, college scholarships, social and volunteer service programs by adult chapters and youth service clubs nationwide, and educational programs for schools and youth groups.

Fraternal highlights from 2015 include:• Regional Modern Woodmen offices across the United States organized and participated in 66 meal-packing events with more than 1,700 financial representatives and family members, who packed 598,000 meals for 247 food pantries. The events were a continuation of Modern Woodmen’s 2014 Knock Out Hunger project, in which home office employees donated 50,000 meals to a nearby food bank.

• Modern Woodmen members are part of 2,791 adult chapters, 274 Summit chapters (for members age 55 and older) and 746 youth service clubs. More than 1 million people attended social, educational and volunteer events sponsored by chapters and clubs.

• Youth service club members recorded more than 142,000 hours of volunteer service; chapter and Summit chapter members recorded nearly 300,000 hours of service.

• 1.3 million children benefited through participation in Modern Woodmen’s free youth educational programs.

• Modern Woodmen members helped raise $14.6 million in total contributions through the organization’s Matching Fund Program. The proceeds benefited families and organizations in need in members’ communities.

At Modern Woodmen, it’s not about selling products. It’s about meeting needs. We believe those needs – including the need for life insurance protection – last throughout life.

That’s why we place a strong emphasis on permanent coverage. Regardless of your age or changes in your health, you can have peace of mind knowing your coverage will be there when your family needs it most.

However, we don’t expect you to pay throughout your life. Our whole life insurance plans allow you to lock in affordable premiums for life or choose from a variety of limited-pay options. Pay off your coverage before your kids go to college or before retirement. Or pay it all at once in a single premium.

In 2015, Modern Woodmen of America continued to grow its financial and fraternal successes. The fraternal financial services organization reports that life insurance in force grew by more than $800 million for the fifth straight year,

and assets reached $14.8 billion. Additionally, Modern Woodmen contributed $19.2 million to communities nationwide through its fraternal member benefits and programs last year.

Modern Woodmen of Americabuilds on financial and fraternal strength in 2015

Life insurance products • Whole life insurance • Universal life insurance • Term life insurance

Annuity products • Fixed annuities • Immediate annuities • Variable annuities1

Investment products1

• Mutual funds • Retirement plans – Traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA, 401(k), 403(b) TSA • College savings plans – 529 college savings plans, Coverdell education savings accounts, UGMA/UTMA accounts • Brokerage services

Insurance products2

• Dental and vision insurance • Disability income insurance • Group employee benefits • Group voluntary benefits • Impaired risk life insurance • International life and health insurance • Long-term care insurance • Health insurance • Medicare supplement insurance • Medicare Advantage and prescription drug plans

Banking products3

• Checking accounts • Savings accounts • Certificates of deposit • First mortgage home loans (new purchases and refinancing included) • Home equity loans • Visa® credit cards and gift cards

1 Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC.

Individual agents may not be licensed to sell all products. 2 Not issued by Modern Woodmen of America. Brokered insurance products available through MWAGIA Inc., a Modern Woodmen subsidiary. Product availability varies by state.3 Modern Woodmen Bank is a marketing name for MWABank, a wholly owned subsidiary of Modern Woodmen of America. Annuities, insurance, retirement plans, mutual funds and other securities are not insured by the FDIC or any other federal government agency, are not obligations or deposits for MWABank, and are not guaranteed by MWABank. These products involve risk, including the possible loss of principal invested. MWABank is an Equal Housing Lender.

“At Modern Woodmen, we proudly serve members for life,” says W. Kenny Massey, president and CEO of Modern Woodmen. “Our members value Modern Woodmen’s financial stability and fraternal offerings.”

Continued growth in life insurance in forceLife insurance in force, the total amount of life insurance owned by members to protect their families in case of premature death, increased to $38.1 billion.

“Life insurance should be the cornerstone of every financial plan, because it offers valuable protection for the unexpected,” says Massey. “Our financial representatives work hard to give customized advice on the best product options, such as buying permanent coverage without making permanent payments.”

Assets reach $14.8 billionModern Woodmen’s assets increased 4.4 percent from 2014, reaching $14.8 billion. The organization’s assets are primarily invested in high-quality, low-risk corporate and government bonds.

“First and foremost, Modern Woodmen is fiscally responsible,” said Massey. “We manage our investments in a way that carefully protects our promises to members.”

Annuity assets under management equaled $8.5 billion.

Total life insurance, annuity and other certificate reserves, which are funds held to guarantee future benefits to members, increased 4.3 percent to more than $11 billion.

Strong operational resultsTotal premium income in 2015 was $1.05 billion. Compared to 2014, variable annuity certificate sales increased 22 percent, and variable annuity premiums increased by 26.4 percent.

Payments and benefits to members in 2015 totaled nearly $837 million. This includes death benefits, annuity payments and surrender benefits. An additional $9.3 million in dividend payments was refunded to life insurance and annuity certificates.

Net gain from operations after dividends was nearly $38 million, with a total net income of $50.3 million.

Total surplus and special reserves were nearly $1.6 billion in 2015. Surplus and special reserves provide additional safety for members and ensure Modern Woodmen’s ability to meet unforeseen events, continue the organization’s fraternal programs and provide funds for future growth.

Protection for life, not payments for life

Your coverage. Your choice.

8 2015 Annual Report Modern Woodmen of America | Adding Value 9

ProductsModern Woodmen can help you meet a wide range of financial needs with the help of a wide range of financial products.

STATEMENT OF OPERATIONS

Income: Premiums and other considerations: Life and annuities Other Investment income, net of expensesAmortization of interest maintenance reserveOther income

Total income Benefits and expenses:Benefits: Life and annuities Other Increase in certificate reserves Employees’ and fieldworkers’ benefit plans Commissions General insurance expenses Insurance, taxes, licenses and fees Fraternal expensesNet transfers to or (from) Separate Accounts

Total benefits and expenses

Net gain from operations before dividends to certificateholders and net realized capital gains Dividends to certificateholders Net gain from operations before net realized capital gains Net realized capital gains

Net income

2015

$1,054,369 4,068

565,383 11,287 9,994

1,645,101

824,622 12,105 489,947 5,524

63,428 117,560 7,380 19,200 58,125

1,597,891

47,210 9,294

37,916 12,375

$50,291

STATEMENT OF CASH FLOWS

Cash from operations:

Premium and annuity considerations Investment income, net Other income

Total cash received from operations

Benefit and loss related payments Commissions and other expenses paidNet transfers to or (from) Separate Accounts

Dividends paid to certificateholders

Total cash paid from operations

Net cash from operations

Cash used in investments:

Proceeds from investments sold or matured: Bonds Stocks Mortgage loans Real estate Other invested assets Miscellaneous proceeds

Total investment proceeds Cash applied, cost of investments acquired: Bonds Stocks Mortgage loans Real estate Other invested assets

Miscellaneous applications

Total investment applications

Net increase in certificate loans and liens

Net cash used in investments

Other cash provided by (used in) financing activities and other miscellaneous sources Increase (decrease) in cash and short-term investments

Cash and short-term investments, beginning of year

Cash and short-term investments, end of year

2015

$1,056,454 559,090 9,993

1,625,537

810,947 204,078 60,769

14,794

1,090,588

534,949

1,140,996 147,080 44,823 0 59,899 6,045

1,398,843

1,763,765 89,502 39,967 28 51,955

0

1,945,217

(5,095)

(541,279)

32,698 26,368

100,018

$126,386

STATEMENT OF SURPLUS

Appropriated:

Balance at beginning of year

Transfer from unassigned surplus

Balance at end of year

Unassigned:

Balance at beginning of year

Net income from operations

Net unrealized capital gains

Change in asset valuation reserve

Change in nonadmitted assets

Transfer to appropriated surplus

Other changes, net

Balance at end of year

Total surplus

2015

$277,015

1,761

278,776

1,202,031

50,291

(28,580)

55,900

(9,526)

(1,761)

44,120

1,312,475

$1,591,251

2015

$11,787,522 2,536

36,885 3,540

9,1003,671

465,676 165,789

53,032 35,958

239,586 359,968

13,163,263

278,776 1,312,475

1,591,251$14,754,514

BALANCE SHEETS

AssetsInvestments:

Bonds

Common stocks

Mortgage loans

Real estate and home office property

Cash and short-term investments

Certificateholders’ loans

Securities lending reinvested collateral

Other invested assets

Total investments

Investment income due and accrued

Electronic data processing equipment

Other assets

Separate account assets

Total assets

2015

$11,941,085

745,126

489,386

26,014

126,386

171,210

465,676

295,220

14,260,103

128,731

2,992

2,720

359,968

$14,754,514

Liabilities and SurplusLiabilities:

Aggregate reserves for certificates and contracts: Life and annuity Accident and health Certificate and contract claims Other certificateholders’ funds Dividends payable to certificateholders Accrued commissions, general expenses and taxesPayable for securities lending collateralOther liabilitiesLiability for employees’ and fieldworkers’ benefits Interest maintenance reserve Asset valuation reserve Separate account liabilities

Total liabilities

Surplus:Appropriated Unassigned

Total surplus

Total liabilities and surplus

10 2015 Annual Report Modern Woodmen of America | Adding Value 11

Financial statementsModern Woodmen of America – Year ended Dec. 31, 2015 (dollars in thousands) unaudited

2014

$274,300

2,715

277,015

1,241,144

85,380

5,897

(40,828)

12,408

(2,715)

(99,255)

1,202,031

$1,479,046

2014

$1,068,888 562,289 4,545

1,635,722

796,859 212,916 52,882

14,557

1,077,214

558,508

1,097,061 96,064 70,903 0 45,305 27,083

1,336,416

1,638,616 167,341 3,936 0 51,786

1

1,861,680

(7,100)

(518,164)

(2,239) 38,105

61,913

$100,018

2014

$1,066,911 4,113

564,832 20,481 4,740

1,661,077

792,422 10,990 582,149 3,134

64,010 101,759 6,885 19,032 49,741

1,630,122

30,955 14,758

16,197 69,183

$85,380

$104,108

2014

$11,303,244

829,983

494,246

27,930

100,018

176,383

471,720

288,912

13,692,436

124,374

3,805

4,622

305,868

$14,131,105

2014

$11,292,932 2,649

20,409 5,518

14,6007,599

471,720 152,461

50,329 32,488

295,486 305,868

12,652,059

277,015 1,202,031

1,479,046$14,131,105