<PAGE>

                               TERM LOAN AGREEMENT

     THIS TERM LOAN AGREEMENT (hereafter "Agreement") dated as of August 3,
1999 between ARM Financial Group, Inc., a Delaware corporation, headquartered
at 515 West Market Street, Louisville, Kentucky 40202 (hereinafter the
"Company"), and GenAmerica Corporation, a Missouri corporation, headquartered
at 700 Market Street, St. Louis, MO 63101 (hereinafter the "Lender").

The Company and the Lender agree as follows:


                                  Article I


                           Amount and Terms of Loan

1.  Subject to the terms and conditions herein set forth, the Lender shall
    lend to the Company and the Company shall borrow the sum of thirty-eight
    million dollars ($38,000,000).

2.  The borrowing shall be evidenced by a promissory note to the order of the
    Lender in the form of "Exhibit 1" (the "Note") attached hereto, which
    shall be dated the closing date of this Agreement, duly executed by the
    Company with blanks suitably filled in conformity herewith and in the
    principal amount of $38,000,000.  The Note shall mature on the later of
    (a) the 90th day after the date of this Agreement or (b) if a definitive
    agreement prior to said 90th day, involving any merger, consolidation or
    sale transferring control of the stock or substantially all of the assets
    of the Company, Integrity Life Insurance Company, or National Integrity
    Life Insurance Company, is executed on or before said 90th day, then the
    closing date of such transaction (the Maturity Date), at which time the
    unpaid principal together with all accrued interest thereon shall be due
    and payable, unless the parties agree in writing to extend such date.

3.  The Note shall bear interest before the Maturity Date, including any
    extensions thereof, at a rate equivalent to 200 basis points in excess
    of the Interest Reference Rate, which interest rate will change when and
    as such Interest Reference Rate shall change on the last day of each
    calendar month.  Interest on the unpaid principal balance shall be
    payable to the Lender in full on the Maturity Date.


                                  Article II

                             Right to Prepay Note

The Company shall have the right, at any time and from time to time, to
prepay without penalty all or any part of the Note.


                                 Article III

                        Representations and Warranties


                                      TL 1

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The Company represents and warrants that as of the date hereof:

1.  There are no suits or proceedings pending against or affecting the
    Company or any subsidiary which, in the opinion of counsel for the
    Company, will have a material adverse effect on the financial
    condition or business of the Company and its subsidiaries;

2.  The Company's risk based capital ratio on June 30, 1999 was and as of
    the date hereof is not less than 150.

3.  The Company has full power and authority to execute and perform the terms
    and provisions of this Agreement and to borrow hereunder.


                                  Article IV

                             Affirmative Covenants

1.  The Company covenants and agrees that until all indebtedness incurred
    hereunder has been paid in full, it will:

    (a) Furnish to the Lender, not later than 90 days after the end of each
        fiscal year, a consolidated profit and loss statement and statement
        of surplus of the Company and its subsidiaries for such year and a
        consolidated balance sheet of the Company and its subsidiaries as of
        the last day of such fiscal year, all in reasonable detail and
        satisfactory in scope to the Lender and all certified by independent
        public accountants satisfactory to the Lender;

    (b) Furnish to the Lender, not later than 45 days after the close of each
        quarter-annual period (except the last quarter-annual period of each
        year), a consolidated profit and loss and surplus statement of the
        Company and its subsidiaries for the current fiscal year to and
        including the period then ending and a consolidated balance sheet of
        the Company as of the last day of such period, which statements and
        balance sheets shall be in reasonable detail and certified by an
        appropriate officer of the Company;

    (c) From time to time furnish to the Lender all financial information,
        including proxy statements, furnished by the Company to its
        shareholders;

    (d) With reasonable promptness, furnish to the Lender such additional
        financial statements and such data and information concerning the
        financial condition of the Company and its subsidiaries as may
        reasonably be requested by the Lender; provided, however, that none
        of the provisions of this Article IV, Section 1 shall require the
        Company to give the Lender any information which it is prohibited
        from giving the Lender by any governmental regulation;

    (e) At all times keep its property insured against loss or damage to the
        extent and against the risks that similar property is usually insured
        by other companies engaged in the same business, and will cause its
        subsidiaries so to do;


                                     TL 2

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Promptly pay and discharge, and cause its subsidiaries to pay and discharge,
all taxes and assessments levied and assessed or imposed upon its property or
upon its income as well as all claims which, if unpaid, might by law become a
lien or charge upon its property; provided, however, that nothing herein
contained shall require the Company or any subsidiary to pay any such taxes,
assessments or claims so long as the Company or any subsidiary shall in good
faith contest the validity and stay the execution and enforcement thereof.


                                  Article V

                              Events of Default

If any of the following events shall occur and be continuing: If the Company
defaults in the payment of any principal of the Note when the same shall
become due, either by terms thereof or otherwise as herein provided; or if
the Company defaults in the payment of any interest on the Note for more than
ten days after the date due; or if the Company or any subsidiary makes an
assignment for the benefit of creditors; or if the Company or any subsidiary
petitions or applies to any tribunal for the appointment of a trustee or
receiver of the Company or any subsidiary, or of any substantial part of the
assets of the Company or any subsidiary, or commences any proceedings
relating to the Company or any subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect; or
if any such petition or application is filed, or any such proceedings are
commenced, against the Company or any subsidiary, and the Company or such
subsidiary by any act indicates its approval thereof, consent thereto, or
acquiescence therein, or an order is entered appointing any such trustee or
receiver, or adjudicating the Company or any subsidiary bankrupt or
insolvent, or approving the petition in any such proceedings, and such order
remains in effect for more than 60 days; or if any order is entered in any
proceedings against the Company decreeing the dissolution or split-up of the
Company, and such order remains in effect for more than 60 days; the Lender,
upon being directed by the holder or holders of any of the notes outstanding,
shall, by notice in writing to the Company, declare all of the Note to be,
and the Note shall thereupon be and become, forthwith due and payable,
together with interest accrued thereon.

                                  Article VI

                                  Definitions

For the purpose of this Agreement, the following terms shall have the
following meanings:

1.  "Person" shall mean and include an individual, a partnership, a
    corporation, a trust, an unincorporated organization and a government
    or any department or agency thereof;

2.  "Subsidiary" shall mean any corporation organized under the laws of any
    state of the United States of America, or foreign country, a majority
    of the voting stock of which shall, at the time as of which any
    determination is being made, be owned by the Company either directly or
    through subsidiaries;


                                      TL 3

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3.  "Event of default" shall mean any of the events specified in Article V,
    provided that there has been satisfied any requirement in connection with
    such event for the giving of notice, or the lapse of time, or the
    happening of any further condition, event or act, and "default" shall mean
    any of such events, whether or not any such requirement has been satisfied;


                                     TL4

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4.  "Interest Reference Rate" shall mean the rate per month equal to the
    offered rates for deposits in U.S. Dollars for a 1 month period which
    appears on the LIBO page of the Reuters Monitor Money Rates Service.

5.  "Note" shall mean the promissory note.


                                 Article VII

                                Miscellaneous

1.  This Agreement may be amended, and the Company may take any action herein
    prohibited, or omit to perform any act herein required to be performed by
    it, if the Company shall obtain the written consent of the Lender to such
    amendment, action or omission to act.

2.  All representations and warranties contained herein or made in writing by
    the Company in connection herewith shall survive the execution and
    delivery of this Agreement and of the notes.

3.  All covenants and agreements in this Agreement contained by or on
    behalf of either of the parties hereto shall bind and inure to the
    benefit of the respective successors and assigns of the parties hereto
    whether so expressed or not.

4.  All communications provided for hereunder shall be sent by first
    class mail and, if to the Lender, to its offices at 700 Market Street,
    St. Louis, MO 63101, to the attention of M.P. McCauley and if to the
    Company, to its offices at 515 West Market Street, Louisville, Kentucky
    40202, to the attention of the General Counsel, or to such other address
    with respect to any party as such party shall notify the others in
    writing.

5.  No delay on the part of the Lender in exercising any right, power or
    privilege granted hereunder shall operate as a waiver thereof, nor shall
    any single or partial exercise of any such right, power or privilege
    preclude any other or further exercise thereof. The rights and remedies
    herein expressly specified are cumulative and not exclusive of any
    other rights and remedies which the Lender would otherwise have.

6.  This Agreement shall be governed by and construed in accordance with
    the laws of the State of Missouri, without giving effect to the
    principles of conflicts of laws thereof.

7.  This Agreement shall terminate when the unpaid principal and
    interest has been paid in full.

8.  This Agreement may be executed in any number of copies and by the
    parties hereto on separate counterparts. Complete sets of counterparts
    executed by all of the parties hereto shall be lodged with the Company
    and the Lender.


                                     TL5

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The parties hereto have caused this Agreement to be duly executed by their
respective duly authorized officers as of the day and year first above
written.

ARM Financial Group, Inc.                           GENAMERICA CORPORATION
(the "Company")                                     (the "Lender")


BY: /s/ John R Lindholm                         BY: /s/ David L. Herzog
   ----------------------------                    ----------------------------
     John R Lindholm                                 Name: David L. Herzog
     President Retail Business Division              Title: CFO


ATTEST: [ILLEGIBLE]                             ATTEST: /s/ Matthew P. McCauley
       ------------------------                        ------------------------
                                                     Name:


                                     TL6