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Custom Care II Enhanced

Custom Care II Enhanced. Helping you meet a broader range of client needs. LTC-3775 6/08. Long-Term Care Insurance is Underwritten by John Hancock Life Insurance Company, Boston, MA 02117. For financial professional use only. Not for use with the public. A Standard of Excellence.

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Custom Care II Enhanced

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  1. Custom Care II Enhanced Helping you meet a broader range of client needs LTC-3775 6/08 Long-Term Care Insurance is Underwritten by John Hancock Life Insurance Company, Boston, MA 02117. For financial professional use only. Not for use with the public.

  2. A Standard of Excellence • Leadership • John Hancock is a committed leader in the Long-Term Care Insurance Market • LTC insurance solutions through innovative, competitive and responsible product offerings • John Hancock was the #1 LTC insurance carrier in the US, based on new premium and new lives sold in 20071 • We have more than 1 Million LTC insurance policyholders in-force as of December 31, 2007² • Brand Recognition • John Hancock is one of the leading brands among consumers in the country for financial services, with 96% consumer awareness³ 1. LIMRA, Individual and Group LTCI Sales Surveys for Q4 and YTD 2007. 2. Based on John Hancock internal claims data as of December 31, 2007. Total includes individual and group LTCI and 50% of the Federal Long-Term Care Insurance Program. 3. Chadwick Martin and Bailey, 2007.

  3. A Standard of Excellence • A History of Paying Claims for our Policyholders • We have more than $8.1 billion in LTC insurance claims reserves¹ • With 20 years of LTC insurance experience, we are a company that has kept its promises, paying more than $1.8 billion² in claims on our LTC insurance policies • Strength & Stability • Ratings as of 12/31/07 John Hancock Life Insurance Co. • S&P AAA • MOODY’S Aa1 • A.M. BEST A++ • FITCH Rating AA+ • Comdex Ranking 99 (out of 100) • 1. Based on internal data as of 12/31/07. • 2. Based on internal data, including individual, group, Fortis and the Federal Long-Term Care Insurance Program

  4. Custom Care II Enhanced Features & Benefits

  5. State Approvals – Launch Date 6/23/08 AK HI WA MT ME ND VT MN OR NH ID MA NY WI SD WY MI CT RI PA IA NE NJ NV IL IN OH DE UT MD CO DC WV CA VA KS MO KY NC TN AZ OK NM AR SC MS AL GA LA TX FL

  6. Alabama Alaska District of Columbia Illinois Kansas Kentucky Maine Michigan Mississippi North Dakota Nebraska New Mexico Oklahoma Rhode Island South Dakota West Virginia Wyoming CC II Enhanced - State Approval List

  7. Deadlines for Custom Care II applications • Once Custom Care II Enhanced has been launched in a state, Custom Care II will no longer be available in that state • For the initial launch on June 23rd, all Custom Care II applications must be signedno later thanJune 22, 2008 and receivedin the Home Office no later thanJuly 22, 2008 • Custom Care II applications signed after June 22, 2008, or received after July 22, 2008, in the states included in the June 23rd launch of Custom Care II Enhanced will continue to go through the underwriting process • You will be required to obtain a new Custom Care II Enhanced application from the client prior to policy issuance and the new Custom Care II Enhanced rates will apply

  8. Everything You Love About CC II plus….. • Unlimited CPI Compound Inflation with the Guaranteed Increase Option (GIO) • Caregiver Support Services • Lifestyle Benefit Changes • Consumer Protection Provisions • Alternate Services Benefit • Independent Third-Party Review • Timely Payment of Claims • Contingent Nonforfeiture for Limited Pay Policies Policy benefits may vary by state

  9. CC II Enhanced - Policy Building Blocks • Eligibility for Benefits • Need Substantial Assistance to perform at least two of the six Activities of Daily Living • Bathing, continence, dressing, eating, toileting, or transferring • Substantial Assistance means “Hands-on or Stand-by” assistance (or) • Requires Substantial Supervision to protect himself or herself due to presence of “Severe Cognitive Impairment” • Clinical evidence and standardized tests (and) • A licensed health care practitioner certifies the ADL disability is expected to continue for at least 90 days Policy benefits may vary by state

  10. CC II Enhanced - Policy Building Blocks • Coverage • Pay actual charges up to the LTC Benefit Amount • At home (Adult Day Care, Professional Care, Hospice Care and Incidental Homemaker Services) • Independent home health care provider definitions • Immediate family members can be compensated if working through an approved provider • In a Nursing Home or Assisted Living Facility • Unused benefits extend the benefit period Policy benefits may vary by state

  11. CC II Enhanced - Policy Building Blocks • Applicant Age • Ages 18-84 • Ages 80-84 with limited benefits • LTC Benefit Amount • Choose from a Monthly or Daily Benefit • Monthly $1,500 to $15,000 limit • in $100 increments • Daily $50 to $500 • in $10 increments Policy benefits may vary by state

  12. CC II Enhanced - Policy Building Blocks • Benefit Periods • Multiplier for the LTC Benefit Amount • 2 years (730 days) • 3 years (1,095 days) • 4 years (1,460 days)* • 5 years (1,825 days)* • 6 years (2,190 days)* • 10 years (3,650 days)* • Lifetime (unlimited days)* * Not available ages 80-84 Policy benefits may vary by state

  13. CC II Enhanced - Policy Building Blocks • Elimination Periods (EP) • Deductible where client pays for services before the policy pays • 30 days of service * • 60 days of service* • 90 days of service • 180 days of service • 365 days of service • “True cumulative” EP: days of service do not need to be consecutive or within the same claim • For Home Health Care (HHC) • At least one HHC day of service in a calendar week = seven days of service in calculating the EP * Not available ages 80-84. Policy benefits may vary by state

  14. CC II Enhanced - Inflation Protection • 5% Compound Inflation Option • LTC Benefit Amount & Pool of Money increased by 5% compound, each year • Increases applied to the remaining Pool of Money, even if on claim • 5/3% Annual Compound Inflation no longer offered • 5% Simple Inflation Option • LTC Benefit Amount increased 5% of original benefit, each year • Increases applied to the remaining Pool of Money, even if on claim Policy benefits may vary by state

  15. CC II Enhanced - Inflation Protection • “New” – Unlimited CPI Compound Inflation • Annual Compound increases based on the Consumer Price Index (CPI) • No limit to the CPI increase • CPI is the most widely used measure of inflation1 • Steadily increased over the last 50 years1 • Highly weighted towards housing & labor costs1 • If CPI is negative, benefits remain level 1. Source – U.S. Department of Labor, Bureau of Labor Statistics Policy benefits may vary by state

  16. CC II Enhanced - Inflation Protection • Unlimited CPI Compound Inflation (cont.) • Provides meaningful and appropriate inflation protection • May be more than fixed 5% Compound Inflation • Premium stability • Investment strategy that matches investments to benefits through the use of inflation hedges • Level premiums, regardless of how high future inflation may be • More affordable than fixed 5% Compound Inflation Policy benefits may vary by state

  17. Guaranteed Increase Option (GIO) -included with CPI Compound Inflation • Option to increase LTC Benefit Amount by 10% every 3 years • The GIO increase is in addition to the annual CPI increase • No underwriting • Clients have to accept the increase within 31-days or the right to elect that increase will expire (future offers will still be made) • The premium for any increase is based on attained age • Not available if client has been on claim during the 2 year period prior to the Option Date or if the Option Date occurs on or after 91st birthday. • Not available with 10 Pay or Paid-Up at 65 payment options • Not available with FamilyCare II Benefit Policy benefits may vary by state

  18. Why GIO? • Offering a policy that can adapt over time enables you to better meet your clients’ needs — particularly with younger buyers • GIO is a safety net for increasing coverage for any reason (i.e. move to a higher cost of care community), without underwriting, if a client’s needs change • Like any safety net, your client may never need it, but having it provides a higher comfort level and greater confidence • GIO would be a great addition to any LTC insurance policy, regardless of the inflation option selected • GIO is not meant to be a cost-effective way to buy additional LTC insurance over time Policy benefits may vary by state

  19. 5% Simple Inflation Performance $250 Daily Benefit Years Policy in Effect

  20. 5% Compound Inflation Performance $433 Daily Benefit $250 Years Policy in Effect

  21. CPI Compound - Historical Performance 4.2% (CPI Results 1977-2007) 5.0% (CPI Results 1977-1997) $433 6.5% (CPI Results 1977-1987) $341 Daily Benefit $250 Years Policy in Effect

  22. 55 Year OldPreferred Health – Married Both Applying$100 Daily Benefit, 5-Year Benefit Period, 90 Day Elimination PeriodInflation Based on 30 Year Calculation 39% less than 5% Compound Premiums: CPI Compound $ 778 Simple $ 761 5% Compound $1,083 $433 $341 Daily Benefit $250 Years Policy in Effect Policy benefits may vary by state

  23. 55 Year OldPreferred Health – Married Both Applying$100 DB (5% Compound), $130 DB (CPI Compound), 5-Year BP, 90 Day EPInflation Based on 30 Year Calculation Premiums: CPI Compound $1,012 5% Compound $1,083 $447 $433 Daily Benefit Years Policy in Effect Policy benefits may vary by state

  24. 50 Year OldPreferred Health – Married Both Applying$100 Daily Benefit, 5-Year Benefit Period, 90 Day Elimination PeriodInflation Based on 30 Year Calculation 36% less than 5% Compound Premiums: CPI Compound $ 694 Simple $ 643 5% Compound $ 948 $433 $341 Daily Benefit $250 Years Policy in Effect Policy benefits may vary by state

  25. 50 Year OldPreferred Health – Married Both Applying$100 DB (5% Compound), $130 DB (CPI Compound), 5-Year BP, 90 Day EPInflation Based on 30 Year Calculation Premiums: CPI Compound $ 902 5% Compound $ 948 $447 $433 Daily Benefit Years Policy in Effect Policy benefits may vary by state

  26. 45 Year OldPreferred Health – Married Both Applying$100 Daily Benefit, 5-Year Benefit Period, 90 Day Elimination PeriodInflation Based on 30 Year Calculation 52% less than 5% Compound Premiums: CPI Compound $ 592 Simple $ 558 5% Compound $ 897 $433 $341 Daily Benefit $250 Years Policy in Effect Policy benefits may vary by state

  27. 45 Year OldPreferred Health – Married Both Applying$100 DB (5% Compound), $150 DB (CPI Compound), 5-Year BP, 90 Day EPInflation Based on 30 Year Calculation Premiums: CPI Compound $ 888 5% Compound $ 897 $513 $433 Daily Benefit Years Policy in Effect Policy benefits may vary by state

  28. “Buy up” to actual local costs Use premium equivalency to buy additional Daily or Monthly LTC Benefits with Custom Care II Enhanced

  29. Maximizing Day One Coverage • Average daily benefit sold (CCII) $150 • Average Annual Coverage $150 X 365 days = $54,750 • National Avg. Daily Cost of Care $190 ($70,000/365 days)1 • Average Annual Shortfall $15,250 ($70,000 - $54,750) 1. John Hancock 2005 Cost of Care Survey, conducted by Harris, Rothenberg International, LLC, 2005 Policy benefits may vary by state

  30. 5% Compound vs. CPI Compound – Age 455 Year Benefit Period, 90 Day Elimination Period, Married, Select Day One Benefits Policy benefits may vary by state

  31. 5% Compound vs. CPI Compound – Age 505 Year Benefit Period, 90 Day Elimination Period, Married, Select Day One Benefits Policy benefits may vary by state

  32. 5% Compound vs. CPI Compound – Age 555 Year Benefit Period, 90 Day Elimination Period, Married, Select Day One Benefits Policy benefits may vary by state

  33. 5% Compound vs. CPI Compound – Age 605 Year Benefit Period, 90 Day Elimination Period, Married, Select Day One Benefits Policy benefits may vary by state

  34. 5% Compound vs. CPI Compound – Age 50 w/SharedCare2 X5 Year Benefit Period, 90 Day EP, Married, Select, SharedCare Day One Benefits Policy benefits may vary by state

  35. CC II Enhanced - Inflation Protection • Enhanced Guaranteed Purchase Option (GPO) • Insured may purchase additional coverage without underwriting every 3 years (5%, 10% or 15% of original amount) • If benefits have been paid in the previous 2 year period or if the insured is older than age 90 no offer will be made • One time option to change to CPI Compound or 5% Compound inflation for increased premium at age 65 • Not available with FamilyCare II Benefit, Limited Pay Options or Survivorship and Waiver of Premium Rider • No Inflation • Only available with Limited Pay Options or the Survivorship and Waiver of Premium Benefit Policy benefits may vary by state

  36. Enhanced GPO Inflation ExampleGPO with CPI Compound Conversion at age 65 • Applicant age 55 • Have “need” of parental experiences with LTC • Children college expenses • Limited premiums available in current situation • Premium for CPI Compound @ age 55 =$1,654 • ($150 DB, 5 Year BP, 90 Day EP, Partner not applying, Select) • GPO w/CPI Compound conversion at 65 =$935 • Premium then goes to $1,834 at 65 • Alternative is “to wait to age 65” • Premium for CPI Compound at age 65 = $2,697 Policy benefits may vary by state

  37. Custom Care II Enhanced vs. “The Industry…”5-Year, 90 day Elimination Period, $4,500 Mo. Max., 5% Compound Inflation, Married Select Percentage (%) to CCII Enhanced Premiums Classic Select Generation Protector II Privileged Choice Value2 Ideal2 Premier2 LifeStage: Custom Advantage LTC-3 AARP Simplicity2 Competitor information is accurate to the best of our knowledge as of 6/1/08. For complete details, please refer to the company’s outline of coverage or policy Continues to be Competitive…

  38. CCII Enhanced w/CPI Compound vs “The Industry…”5-Year, 90 day Elimination Period, $4,500 Mo. Max., 5% Compound Inflation, Married Select Percentage (%) to CCII Enhanced w/CPI Compound Premiums Classic Select Generation Protector II Privileged Choice Value2 Ideal2 Premier2 LifeStage: Custom Advantage LTC-3 AARP Simplicity2 Competitor information is accurate to the best of our knowledge as of 6/1/08. For complete details, please refer to the company’s outline of coverage or policy Extremely Competitive!!

  39. CC II Enhanced - Built-In Benefits • Double Accident Benefit prior to age 65 • 100% Reimbursement up to two times the maximum daily or monthly benefit if care is the result of an accident prior to age 65 • Benefits paid in excess of the LTC Benefit Amount will not be deducted from the Total Pool of Money • For the entire duration of the claim • Lifestyle underwriting and ability to issue without benefit to preserve case • Not available with Lifetime Benefit Period or with FamilyCare II • Return of Premium prior to age 65 • Total premiums paid less policy benefits paid when death occurs prior to age 65 • Not available with FamilyCare II Benefit Policy benefits may vary by state

  40. CC II Enhanced - Built-In Benefits • “New” - Caregiver Support Services (Supporting Clients and Their Family) • Personalized telephone & website support • Access to quality reports and ratings on over 90,000 nursing homes, assisted living facilities, hospice, and home health care providers nationwide • Access to exclusive provider discounts ( 7%-35% ) • Care advisory services • Family members include Spouse or Partner and their parents, stepparents, grandparents, siblings, children, step children, grandchildren, and their respective spouses Policy benefits may vary by state

  41. CC II Enhanced - Built-In Benefits • Care Advisory Services (CAS) • The benefit eligible policyholder may chose an independent professional to assist in determining the care and treatment plan • 1/3 the Monthly or 10X the Daily LTC Benefit Amount, annually • May be paid before the EP is satisfied • Does not reduce the Pool of Money!!! • Does not count towards the EP Policy benefits may vary by state

  42. CC II Enhanced - Built-In Benefits • Additional Stay at Home Benefit • Home modifications, durable medical equipment, caregiver training, home safety checks, provider care checks, and medical alert systems • 1X the Monthly or 30X the Daily LTC Benefit Amount • May be paid before the EP is satisfied • Must be benefit eligible • Does not reduce the Pool of Money!!! • Does not count towards the EP Policy benefits may vary by state

  43. CC II Enhanced - Built-In Benefits • Respite Care • Short-term temporary care to provide relief to the primary uncompensated caregiver • 21 days per calendar year • Is not subject to, nor does it satisfy the Elimination Period • Reduces the Pool of Money • Bed Hold Benefit • Actual covered charges will be paid to ensure your room will be available at a facility when a stay is interrupted for any reason • Up to 60 days per calendar year • Subject to the elimination period and does reduce the Pool of Money Policy benefits may vary by state

  44. CC II Enhanced - Built-In Benefits • Waiver of Premium • Begins once the Elimination Period is satisfied • Ends once benefits are no longer payable • International Coverage • Receive coverage for care anywhere in the world • Reimbursement basis for actual expenses • Up to 100% of the LTC Benefit Amount for 1 year • Payment in U.S. currency • All benefits except Double Coverage for Accident Benefit, Stay at Home, Respite Care, and Care Advisory Services Policy benefits may vary by state

  45. CC II Enhanced - Consumer Protection Features • “New” - Alternate Services Benefit • Benefit helps to ensure that policyholder has access to emerging services that may develop over time, but are not currently identified in their policy • Example, in certain circumstances, benefits for services not specifically covered under the policy (like robotics) may be authorized at the time of the claim • “New” - Lifestyle Benefit Changes • Allows annual increases in LTC Benefit Amount • Subject to underwriting/additional premium at attained age. • Policyholder can also elect to decrease coverage • Effective on policy anniversary • Coverage selection change forms need to be submitted Policy benefits may vary by state

  46. CC II Enhanced - Consumer Protection Features • “New” - Independent Third-Party Review • In the unusual event that a claim is denied, the policyholder will have the right to request an independent third-party review • Decision of that third party will be binding and must be upheld by John Hancock • “New” - Timely Payment of Claims • In the unlikely event that a claims payment takes longer than 30 days to process, we will pay the policyholder an interest penalty of 1% of the claim amount per month • State variations may apply Policy benefits may vary by state

  47. CC II Enhanced - Consumer Protection Features • Contingent Nonforfeiture • In effect if the optional Nonforfeiture rider is not chosen • In the event of a rate increase exceeding a threshold % based on issue age • Two options • Reduce benefits • Convert to paid-up Policy benefits may vary by state

  48. CC II Enhanced - Consumer Protection Features • “New” - Contingent Nonforfeiture for Limited Pay • Access to a Limited Payment Contingent Nonforfeiture Benefit should a rate increase occur that triggers the benefit based on issue age and the policyholder has paid at least 40% of their Limited Pay premiums • Benefit is equal to 90% of the percentage of premiums paid, times the LTC Benefit Amount • Example: if a policyholder paid 5 years (60 months) of a 10 pay (120 months), they paid 50% of the premiums (120/60) • Multiply 50% by 90% (result is 45%) and multiply the Daily or Monthly LTC Benefit Amount by that percentage to get the reduced LTC Benefit Amount and Total Pool of Money • The reduced LTC Benefit Amount and Total Pool of Money are not subject to inflation increases going forward Policy benefits may vary by state

  49. CC II Enhanced - Consumer Protection Features • Added Protection Against Lapse • The policyholder may designate a person to receive notice if a premium is overdue • Thirty Day Free Look • If the policyholder is not satisfied, they may return the policy within 30 days for a refund • Guaranteed Renewable • John Hancock cannot cancel a policy if the client pays their premiums on time • Company reserves the right to increase the premiums by class, subject to state approval Policy benefits may vary by state

  50. CC II Enhanced - Consumer Protection Features • Grace Period • The policy has a 65 day grace period • If renewal is not paid within 30 days of due date: • We will notify designated person(s) and give 35 additional days to pay the premium with the policy in effect Policy benefits may vary by state

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