Product, pricing, and underwriting changes effective today, May 19th

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1 May 19, 2014 Product, pricing, and underwriting changes effective today, May 19th Effective today, May 19, 2014, there are several changes to our product and pricing on the Custom Care III and Custom Care III featuring Benefit Builder products. Additionally, we are introducing a shortened application and revised underwriting process. Please read this communication for details on the following: 1. Custom Care III featuring Benefit Builder pricing changes 2. Custom Care III featuring Benefit Builder and Custom Care III benefit changes 3. Temporary suspension of business in California 4. Underwriting process and guideline changes including new applications 5. New Business transition guidelines and marketing update 1. Custom Care III featuring Benefit Builder pricing changes Compact States The changes include new rates and some changes to product features for all new business on our Custom Care III featuring Benefit Builder product in Compact states. Similar changes in non- Compact states will be implemented at a later date following state approvals. The average total increase on gender-distinct rates for Custom Care III featuring Benefit Builder is 15%. The average total increase on unisex pricing (for the Sponsored Group Employer market only) is 27%. The Couples/Partner discount for unisex rates is increasing from 30% to 35%. This to align the gender-distinct and unisex premiums for a married couple. Waiver of Home Health Care Elimination Period rider cost is increasing to 17%. Please note: The Double Coverage for Accident Benefit calculation has been modified and will be renamed as the Additional Accident Benefit. For details on the calculation, please refer to the CC III featuring Benefit Builder producer guide. (This applies to CC III featuring Benefit Builder in Compact states only at this time) * See the following page for a complete list of Compact states

2 * Compact states (as of May 19, 2014): Alabama Kansas Mississippi Oklahoma Vermont Alaska Kentucky Missouri Oregon Virginia Arkansas* Louisiana Nebraska Pennsylvania Washington Colorado Maine Nevada* Rhode Island West Virginia Georgia Maryland New South Wisconsin Hampshire Carolina Idaho Massachusetts New Tennessee Wyoming Mexico Illinois Michigan North Texas Carolina Iowa Minnesota Ohio Utah *Please note: Arkansas and Nevada are being added to the list of Compact states effective today, May 19 th. Also, Arkansas is moving to gender-distinct rates. 2. Custom Care III featuring Benefit Builder and Custom Care III benefit changes All states In addition to the pricing changes mentioned above, the following benefit changes for all new business in all states will include: Lowering maximum issue age to 75 (formerly age 79) Lowering maximum daily benefit selection from $500 to $400 (FL will remain at $300) Lowering maximum monthly benefit selection from $15,000 to $12,000 (FL will remain at $9,000; NY (metro & non-metro) will be lowered to $12,400) Removing CPI Compound Inflation through Age 75 (Benefit Builder, CPI Compound Inflation, and 5% Compound Inflation remain as inflation options, in states where available) Removing the 10-year Benefit Period Removing the Survivorship & Waiver of Premium rider (SharedCare, Additional Cash Benefit, and Nonforfeiture are still available, in states where available) Please note: The Core Care product, which has recently only been available in CT, IN and DC, is no longer available as of today, May 19, Temporary suspension of business in California As of today, May 19th, we are temporarily suspending sales of all LTC products in California, until our product pricing has been updated and we are ready to implement. We expect to have our revised product available in California in the next few months.

3 4. Underwriting process and guideline changes including new applications We have identified opportunities to streamline the current LTC application and underwriting information gathering process. These changes are being introduced with the other product pricing changes and benefit restrictions. Please read below for more information. The new application (ICC13-APP14, LTC-APP14) has been enhanced to remove the health questions, which makes for an improved producer experience. All personal health information will now be collected by a licensed health professional during the paramedical exam. Upon receiving an application, John Hancock will initiate contact with our paramedical service partner. The examiner will be completing a paramedical exam, including recording the proposed insured s health information and collecting blood and urine samples for all applicants. Additionally, a brief cognitive screen and functional assessment will be conducted during this exam for individuals ages 65 and older. Please note: The re-designed application has been approved in all states except Florida, Hawaii, California, and New York. Approval in these states is expected shortly and will be communicated via Newslink. In the meantime, as with other states, fluids (blood and urinalysis) will be collected on applicants in these states (except CA) by our paramedical examiner service partners. Underwriting guideline changes We have also developed more comprehensive guidelines to qualify applicants for the Preferred rate class. Expanded BMI guidelines: Changed from unisex to gender specific o Female: o Male: Nicotine Abstinence: Extended from 12 to 36 months Family History (applicable up to age 70) o No parent or sibling with Coronary Artery Disease or Stroke prior to age 50(males) or 60 (females) o No parent or sibling with Dementia diagnosed prior to age 70 or Parkinson s disease diagnosed prior to age 50 Best Care Guidelines: Applicants ages 60 and older must have been seen by their physician within the past 24 months for a comprehensive physical exam

4 5. New Business transition guidelines and marketing update Paper applications for current rates and benefits must have been signed on or prior to May 18, 2014 and received in the John Hancock home office by end of day May 19, LTC Captivate business must have been signed and submitted to us through the system on or prior to May 18, LTC applications signed and submitted after the transition dates above will require the new application form (ICC13-APP14, LTC-APP14) For your convenience, applications can be faxed into New Business at and you may also notify your JH Dedicated Case Manager. California transition rules Paper applications for current rates and benefits in the state of California must have been signed on or prior to May 18, 2014 and must be received in the John Hancock home office by end of day May 27, For your convenience, applications can be faxed into New Business at and you may also notify your JH Dedicated Case Manager. Illustrations and LTC Captivate changes Effective today, May 19th, all users will be required to download a new version of Hansel/eHansel (Release 17.1), which will be available for download on LTC Captivate has been updated to reflect new rates as of May 19 th. Arkansas will also be added to LTC Captivate as a genderdistinct state. State availability on LTC Captivate will not be changing. New application booklets and marketing materials Application booklets (ICC13-APP14, LTC-APP14) are now available to order from jhltc.com. The application booklet contains a checklist on how to complete the package, including new insurability guidelines, an updated HIPAA Medical Authorization form (which will be required effective today, May 19; otherwise, we will not be able to process the application), Outline of Coverage, and all staterequired forms. Electronic versions of applications are now available to download from jhltc.com. Updated marketing materials for consumers The following core marketing materials (all product brochures, product presentations, and CPI brochure) have been updated to reflect the benefit changes for Compact and non-compact states, and now available to order from jhltc.com. CCIII featuring Benefit Builder product brochure (ICC14-LTC-9500, LTC-8500) This consumer brochure explains the Benefit Builder feature and highlights other core policy benefits such as the Advantage Provider Program, Caregiver Support Services, and more. Please note: The Custom Care III product brochure (LTC-8000) is also available for states where Benefit Builder is not currently available.

5 CCIII featuring Benefit Builder product presentation (ICC14-LTC-9501) This consumer seminar presentation focuses on the benefits and features of the Custom Care III featuring Benefit Builder product. Download only. Please note: The employer market product brochure (ICC14-LTC-8800) and product presentation (ICC14-LTC-8801) for Custom Care III featuring Benefit Builder are also available. The employer market product presentation (ICC14-LTC-8801) is also available to download on jhltc.com. CPI Compound Inflation brochure (ICC14-LTC-9076) A consumer brochure that explains how CPI-linked inflation coverage keeps pace with the future cost of care. Updated marketing and support materials for producers Custom Care III featuring Benefit Builder producer guide (LTC-8522) Updated guide provides complete product and marketing information for the sale of Custom Care III featuring Benefit Builder. Includes in-depth information on how the Benefit Builder option works. Please note: For CCIII, LTC-8002 is available (for CT, DC, and IN only). Custom Care III featuring Benefit Builder Facts-at-a-Glance (LTC-8523) A quick-reference tool that includes a high-level description of the benefits and features of Custom Care III featuring Benefit Builder. Custom Care III featuring Benefit Builder Producer Training PPT (LTC-8530) Provides insight into Custom Care III featuring Benefit Builder with a review of policy features, benefits and competitive positioning. Application highlight flier (LTC-1882) This new flier highlights recently-changed areas on the application, for easy reference. Updated materials for underwriting changes The following are new and updated materials that support the underwriting changes. LTC Field Underwriting Guide (LTC May 2014 Edition) The updated tool provides guidelines to medical conditions and underwriting determinations. Insurability Screening Guide - (LTC-2173) This new producer tool will help you determine your client s insurability. This is a key part of the initial sales process now that the medical questions are no longer collected by the agent. This can be downloaded from jhltc.com. There is also an abbreviated version that is part of the producer instructions in the new application booklets. Preparing For Your Paramedical Exam (LTC-2172) This new consumer brochure will help your client prepare for the Paramedical exam. This can be ordered and downloaded from jhltc.com. As always, we strive to ensure a seamless transition for our producers and clients to our streamlined LTC application and our new process/requirements. And, just as we have in the past, we will continue to

6 embrace the challenges within our industry, and leverage our experience in order to offer products that will meet the needs of our policyholders, customers, and the financial professionals who serve them.