The Value of Life Insurance

Transcription

1 The of Life Insurance The Advantages of Owning Life Insurance Place Image Here Prepared For: Presented By: Sample Agent John Hancock Financial Services 197 Clarendon St. Boston, MA Tel.: (617) Fax: (617) Insurance products are issued by: Insurance John Hancock products Lifeare Insurance issued by: Company John Hancock (U.S.A.), Life Boston, Insurance MA and Company securities of New offered York, through Valhalla JohnNY. Hancock Securities Distributors Products distributed LLC through by other John Insurance Hancock broker/dealers Distributors products that have are LLC issued a selling through by: agreement John other Hancock broker/dealers with Life John Insurance appointed Hancock Company Distributors by John (U.S.A.), Hancock LLC Boston, Distributors, 197 Clarendon MA LLC, Street, 197 Clarendon Boston, MA Street, Boston, MA May 08, 2008

2 The of Life Insurance Prepared for Presented By Sample Agent The of Life Insurance This presentation is a planning tool designed to assist you in exploring the advantages of life insurance. However, this presentation is not intended to be a retirement/benefitor estate plan nor is it a specific recommendation for a retirement/benefit or estate plan. This material is for informational purposes only. Although many of the topics presented may also alsoinvolve legal, legal, tax, tax, accounting or other or other issues, issues, neither neither John John Hancock Hancock Life InsuranceCompany New York nor any of nor itsany agents, of its agents, employees, employees, and registered and registered representatives representatives are in theare business theofbusiness offering such of offering advice, such and this advice, presentation and thisand presentation any otherand oral any or written other communication oral or written communication should not be construed should not asbesuch. construed Individuals as such. interested Individuals in these interested topics in should theseconsult topics their should own consult professional their own advisors professional to examine advisors tax, tolegal, examine accounting, tax, legal, or accounting, financial planning or financial aspects planning of this aspects topic. As ofyou thisexplore topic. As your planning explore yourplanning needs with your needs legal with and yourlegal tax advisors, and tax we advisors, hope that we you hope find that this you analysis find this useful. analysis useful. John Hancock New York does not guarantee the accuracy of the "Investin your Life" system or the output. John Hancock New York will not be liable for any John damages Hancock arising does fromnot theguarantee use or misuse the accuracyof this software the "Investin or from any your errors Life" system or omissions or theinoutput. same. John John Hancock Hancock will not New beyork liableassumes for any damages no dutytoarising updatefrom this the software use or or misuse to provide of this notice software any or errors from any in the errors software or omissions or applicable in the same. changes John in the Hancock law. assumes no dutyto update this software or to provide notice of any errors in the software or applicable changes in the law. This supplementalillustrationassumes that the currentlyillustrated non-guaranteedelements will continue for all years shown. However, it is not likely that the This non-guaranteedelements supplementalillustrationassumes will perform exactlyas that the currentlyillustrated shownin the illustration.inaddition, non-guaranteedelements the actual will consequencesof continue for allayears particular shown. planningalternativewill However, it is not likely depend that the on many non-guaranteedelements variables, some of which will perform may not exactlyas be fully shownin accounted thefor illustration.inaddition, or described in this presentation. the actual consequencesof a particular planningalternativewill depend on many variables, some of which may not be fully accounted for or described in this presentation. This program assumes that the life insurance policy meets the definition of life insurance per InternalRevenueCode Section 7702(a) and is not taxed as a modified This program endowment assumes contract. that thewithdrawals life insurance and policy loansmeets from life the insurance definition of policies life insurance have theper effect InternalRevenueCode of reducing the deathsection benefit7702(a) and cashand surrender is not taxed valueas and a may modified cause endowment the policy contract. to lapse. Withdrawals Surrender or and lapse loans of from the policy life insurance can cause policies loss of have death thebenefit effectand of reducing adverse the income deathtax benefit consequences. and cash surrender value and may cause the policy to lapse. Surrender or lapse of the policy can cause loss of death benefit and adverse income tax consequences. The above material was not intended or written to be used, and it cannot be used, for the purpose of avoiding any penaltythat may be imposed by the Internal Revenue The aboveservice. materialthe wasabove not intended material ormay written have to been used, written and to it cannot support bethe used, promotion for the purpose or marketing of avoiding of the transactions any penaltythat or topics may beaddressed imposed by the Internal written material. Revenue Service. Individuals The interested above material in thesemay topics haveshould been consult written to with support their own the promotion professional or marketing advisors tofexamine the transactions legal, tax, or accounting topics addressed or financial by the planning written aspects material. of Individuals these topics. interested in these topics should consult with their own professional advisors to examine legal, tax, accounting or financial planning aspects of these topics. This material does not constitute tax, legal or accounting advice and neither John Hancock New York nor any of its agents, employees or registered representatives This material does arenot in the constitute business tax, of legal offering or accountingadvice such advice. It was andnot neither intended Johnor Hancock writtennor for any useof and its agents, cannot be employees used by or any registered taxpayerrepresentativesare for the purpose of avoiding in the business any IRS of penalty. offering such It wasadvice. writtenitowas support not intended the marketing or written of the for use transactions and cannot or topics be used it addresses. by any taxpayerfor Anyonethe interested purposeinofthese avoiding transactions any IRS penalty.it or topics should was writtento seek advice support based the marketing on his or of her the particular transactions circumstances or topics itfrom addresses. independent Anyoneinterested professional inadvisors. these transactionsor topics should seek advice based on his or her particular circumstances from independent professional advisors. Internal Compliance Number: MLINY Page 2 of 9 May 08, 2008

3 The of Life Insurance Prepared for Presented By Sample Agent This material is authorized for distribution only when preceded or accompanied by the appropriate client guide, product and fund prospectuses. The prospectuses contain complete details on investment objectives, risks, fees, charges and expenses as well as other information about the investment company. Please read the prospectuses carefullycontaining this and other informationon the product and the underlyingportfolios and consider these factors carefully before investing. This material is not intended as investment advice. Variable universal life insurance has annual fees and expenses associated with it in addition to life insurance related charges (which differ with the product chosen), including surrender charges and investment management fees. Variable universal life insurance products are long-term contracts and are sold by prospectus. They are subject to market risk due to the underlyingsub-accounts,and are unsuitable as a short term savings vehicle. The primary purpose of variable universallife insuranceis to provide lifetime protection against economic loss due to the death of the insured person. Cash valuesare not guaranteed if the client is invested in the investment accounts. There are risks associated with each investment option, and the policy may lose value. Page 3 of 6 May 08, 2008

4 The of Life Insurance Prepared for Presented By Sample Agent TABLE OF CONTENTS A. Overview B. The Advantages of Owning Life Insurance C. Investing in Your Life - Flowcharts D. Investing in Your Life - Detail Analysis E. Assumptions Page 4 of 9 May 08, 2008

5 The of Life Insurance THE ADVANTAGES OF OWNING LIFE INSURANCE Prepared for Presented By Sample Agent You may already own life insurance or be familiar with some of its uses. But do you know ALL of the ways that life insurance can benefit you and your family? Life insurance provides needed cash at your death Life insurance is an excellent way to make sure your family has the money to meet its needs should anything happen to you. The liquidity provided by a life insurance death benefit can: Pay off your mortgage; Replace your salary; Pay estate, capital gains, and income taxes; and Equalize the inheritance you leave to your heirs. Life Insurance may offer a competitive Rate of Return on the premiums you pay You may believe that you do not need life insurance because you are in good health and your family could receive more if you invested the money elsewhere. However, have you taken a look at the rate of return life insurance offers? It can be very competitive when used as an economic asset. The net rate of return on the death benefit can be significant in the short term as well as through life expectancy. Life Insurance is a tax efficient vehicle There are many tax advantages associated with owning a life insurance policy. First, life insurance death proceeds are received by your family free of income taxes 1. This means that your family may receive more money and a better return on the premium than if you had invested those dollars in a taxable asset. Second, life insurance policy cash values grow tax-deferred and can be accessed in a tax-favored manner. This means that you will not be taxed on the growth in your policy's cash values unless you surrender the policy. Also, the tax-favored nature of life insurance means you can take tax-free withdrawals up to the total premiums you paid into the policy. Then, if you take distributions from the policy in the form of policy loans above this amount, the loans will not be taxable 2. Third, if your policy is owned by a properly drafted trust that exists outside of your taxable estate, the income tax burden of the trust is reduced since the cash values grow tax-deferred. Moreover, the proceeds should not be subject to estate tax when the policy is owned by the trust 3. Life Insurance can provide for self-completion of your financial plans in the event of death You invest wisely and put away money to protect your family in the future. However, even the best investments need time for ongoing contributions and earnings growth. If something were to happen to you along the way, your original plans may not come to fruition. The life insurance policy death benefit can facilitate selfcompletion for your financial plans by providing the cash to compensate for the loss of planned contributions and earnings. 1 Life insurance death benefit proceeds are generally excludable from the beneficiary s gross income for income tax purposes. There are few exceptions such as when a life insurance policy has been transferred for valuable consideration. No legal, tax or accounting advice can be given by John Hancock, its agents, employees or registered representatives. Prospective purchasers should consult their professional tax advisor for details. 2 Loans and withdrawals will reduce the death benefit, cash surrender value, and may cause the policy to lapse. Lapse or surrender of a policy with a loan may cause the recognition of taxable income. Policies classified as modified endowment contracts may be subject to tax when a loan or withdrawal is made. A federal tax penalty of 10% may also apply if the loan or withdrawal is taken prior to age 59½. Cash value available for loans and withdrawals may be more or less than premiums paid. 3 Trusts should be drafted by an attorney familiar with such matters in order to take into account income and estate tax laws (including the generation-skipping tax). Failure to do so could result in adverse tax treatment of trust proceeds. Page 5 of 9 May 08, 2008

6 24.90% 19.90% 14.90% 9.90% 4.90% -0.10% 12.45% 10.45% 8.45% 6.45% 4.45% 2.45% 0.45% -1.55% The of Life Insurance FLOWCHARTS Prepared for Presented By Sample Agent RATES OF RETURN 10.46% 9.79% 9.18% Life Expectancy 8.62% 8.11% 7.63% 7.18% 6.77% 6.38% 6.02% By the age of 86 (life expectancy) there is a 46.75% chance of death occurring.* - Investment must have earned 5.61% aftertax to have earned enough to equal the death benefit. Note, if you are insurable at standard or better class, the insurance company believes that you will outlive the general population's life expectancy. The ROR on is 4.15%, if you survive life expectancy by 5 years. 5.68% 5.37% 5.46% 5.67% 5.86% 6.03% 6.80% 6.37% 5.97% 5.61% 5.27% 4.96% 4.67% 4.40% 4.15% 3.91% 3.69% 3.49% 3.55% 3.68% 3.81% 3.92% ROR On Pre-Tax Equivalent Female Age 55, Preferred NonSmoker ** Based on 35.00%Tax Bracket NUMERICAL SUMMARY OF RATES OF RETURN John Hancock's Protection VUL, Initial Face amount of $5,000,000 Year Attained Age Planned Cash ROR On Cash ROR On Pre-Tax Equivalent** Probability of (EOY) , ,000, % % % 0.09% 0.00% ,000 9,871 5,000, % % % 0.25% 0.00% ,000 44,204 5,000, % % % 0.45% 0.00% ,000 80,826 5,000, % % % 0.68% 0.00% , ,829 5,000, % % % 0.95% 0.00% , ,478 5,000, % 37.17% 57.18% 3.12% 0.00% , ,541 5,000, % 19.60% 30.16% 7.53% 0.00% ,000 1,244,586 5,000, % 12.26% 18.86% 15.38% 0.00% ,000 1,814,333 5,000, % 8.35% 12.84% 26.90% 0.00% ,000 2,561,678 5,000, % 5.97% 9.18% 42.98% 0.00% 31 Le 86 60,000 2,742,756 5,000, % 5.61% 8.62% 46.75% 0.00% ,000 3,621,715 5,000, % 4.40% 6.77% 62.87% 0.00% ,000 5,314,889 5,314, % 3.55% 5.46% 81.22% 0.00% The ROR on death benefit is equivalent to an interest rate at which an amount equal to the illustrated premiums could have been invested outside the policy to arrive at the net death benefit of the policy. TThis is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration and appropriate prospectuses. The data shown is taken from an illustration, the purpose of which is to show how the performance of the underlying investment accounts could affect the policy cash value and death benefit. It assumes a hypothetical rate of return and/or current interest crediting rate and may not be used to project or predict investment results. Unless indicated otherwise, these values are not guaranteed. COMPARING RATES OF RETURN AT DEATH This means that: - By the age of 86 (life expectancy) there is a 46.75% chance of death occurring.* - Investment must have earned 5.61% after-tax to have earned enough to equal the death benefit, or - Investment must have earned 8.62% pre-tax (assumes 35.0% tax rate). - Unlike most investments, life insurance proceeds have no potential built-in capital gains in the event of repeal or modification of the Federal Estate Tax. Page 6 of 9 * Source 2001 Valuation Basic Table, Select & Ultimate. Life expectancy, in this example, is measured from current age 55. May 08, 2008 Life Expectancy (LE) tables are based on actual mortality experience collected from sources such as aslife lifeinsurance companies and the thesocial Security Security Administration; Administration; this tablethis assumes table has that additional underwriting layers has of noconservatism significant impact built onsince mortality the rates. primaryas use used of the in this table presentation, is for life company LE tablesolvency show both the average calculations. age As at used deathinbased this presentation, your current LE tables age, as showell both as the average age probability at deathofbased deathon byyour a certain currentyear. age, The as well LEasdata theprovided average in this presentation probability ofisdeath not necessarily by a certain indicative year. of The yourleown data personal provided life expectancy, in this presentation and you may is not livenecessarily longer thanindicative indicatedof byyour the table. own personal The LE tables life used are expectancy, not tailored andto youyour maypersonal live longer situation than indicated or risk class; by therather, table. they Theare LE tables based used population are not averages tailored and to your arepersonal presentedsituation merelyor torisk helpclass; you form a generalized rather, they are idea based of potential population ages averages at death. and are presented merely to help you form a generalized idea of potential ages at death.

7 The of Life Insurance DETAIL ANALYSIS Prepared for Presented By Sample Agent ANNUAL RATES OF RETURN John Hancock's Protection VUL, Initial Face amount of $5,000,000 Year Attained Age Planned Cash ROR On Cash ROR On Pre-Tax Equivalent * Probability of (EOY)** , ,000, % % % 0.09% 0.00% ,000 9,871 5,000, % % % 0.25% 0.00% ,000 44,204 5,000, % % % 0.45% 0.00% ,000 80,826 5,000, % % % 0.68% 0.00% , ,829 5,000, % % % 0.95% 0.00% , ,055 5,000, % 84.23% % 1.26% 0.00% , ,821 5,000, % 65.48% % 1.62% 0.00% , ,639 5,000, % 52.87% 81.33% 2.05% 0.00% , ,025 5,000, % 43.87% 67.50% 2.54% 0.00% , ,478 5,000, % 37.17% 57.18% 3.12% 0.00% , ,503 5,000, % 32.00% 49.23% 3.78% 0.00% , ,559 5,000, % 27.91% 42.94% 4.54% 0.00% , ,418 5,000, % 24.60% 37.85% 5.41% 0.00% , ,824 5,000, % 21.88% 33.66% 6.41% 0.00% , ,541 5,000, % 19.60% 30.16% 7.53% 0.00% , ,083 5,000, % 17.67% 27.19% 8.80% 0.00% , ,611 5,000, % 16.02% 24.65% 10.22% 0.00% ,000 1,051,190 5,000, % 14.59% 22.45% 11.80% 0.00% ,000 1,145,843 5,000, % 13.35% 20.54% 13.52% 0.00% ,000 1,244,586 5,000, % 12.26% 18.86% 15.38% 0.00% ,000 1,348,065 5,000, % 11.29% 17.37% 17.38% 0.00% ,000 1,456,468 5,000, % 10.43% 16.05% 19.53% 0.00% ,000 1,570,056 5,000, % 9.66% 14.86% 21.83% 0.00% ,000 1,689,175 5,000, % 8.97% 13.80% 24.29% 0.00% ,000 1,814,333 5,000, % 8.35% 12.84% 26.90% 0.00% ,000 1,946,221 5,000, % 7.78% 11.97% 29.69% 0.00% ,000 2,085,716 5,000, % 7.27% 11.18% 32.70% 0.00% ,000 2,233,897 5,000, % 6.80% 10.46% 35.95% 0.00% ,000 2,392,048 5,000, % 6.37% 9.79% 39.38% 0.00% ,000 2,561,678 5,000, % 5.97% 9.18% 42.98% 0.00% LE ,000 2,742,756 5,000, % 5.61% 8.62% 46.75% 0.00% ,000 2,937,037 5,000, % 5.27% 8.11% 50.58% 0.00% ,000 3,146,593 5,000, % 4.96% 7.63% 54.59% 0.00% ,000 3,373,865 5,000, % 4.67% 7.18% 58.71% 0.00% ,000 3,621,715 5,000, % 4.40% 6.77% 62.87% 0.00% Client:, Female Age 55, Preferred NonSmoker * Based on 35.00%Tax Bracket ** Source 2001 Valuation Basic Table, Select & Ultimate. Life expectancy, in this example, is measured from current age 66. Note, if you are insurable at standard or better class, the insurance company believes that you will outlive the general population's life expectancy. The ROR on is 4.15%, if you survive life expectancy by 5 years. Page 7 of 9 May 08, 2008 This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration and appropriate prospectuses. The data shown is taken from an illustration, the purpose of which is to show how the performance of the underlying investment accounts could affect the policy cash value and death benefit. It assumes a hypothetical rate of return and/or current interest crediting rate and may not be used to project or predict investment results. Unless indicated otherwise, these values are not guaranteed.

8 The of Life Insurance DETAIL ANALYSIS Prepared for Presented By Sample Agent ANNUAL RATES OF RETURN John Hancock's Protection VUL, Initial Face amount of $5,000,000 Year Attained Age Planned Cash ROR On Cash ROR On Pre-Tax Equivalent* Probability of (EOY)** LE ,000 3,895,562 5,000, % 4.15% 6.38% 66.95% 0.00% ,000 4,198,932 5,000, % 3.91% 6.02% 70.72% 0.00% ,000 4,535,071 5,000, % 3.69% 5.68% 74.32% 0.00% ,000 4,907,922 5,000, % 3.49% 5.37% 77.82% 0.00% ,000 5,314,889 5,314, % 3.55% 5.46% 81.22% 0.00% ,000 5,752,698 5,752, % 3.68% 5.67% 84.50% 0.00% ,000 6,221,548 6,221, % 3.81% 5.86% 87.53% 0.00% ,000 6,723,640 6,723, % 3.92% 6.03% 90.22% 0.00% ,000 7,261,330 7,261, % 4.03% 6.20% 92.35% 0.00% ,000 7,837,142 7,837, % 4.13% 6.36% 94.10% 0.00% ,000 8,453,779 8,453, % 4.23% 6.50% 95.55% 0.00% ,000 9,114,136 9,114, % 4.32% 6.64% 96.75% 0.00% ,000 9,821,312 9,821, % 4.40% 6.77% 97.71% 0.00% ,000 10,578,627 10,578, % 4.48% 6.89% 98.45% 0.00% ,000 11,389,635 11,389, % 4.55% 7.01% 99.00% 0.00% ,000 12,258,144 12,258, % 4.62% 7.11% 99.39% 0.00% ,000 13,188,230 13,188, % 4.69% 7.22% 99.65% 0.00% ,000 14,184,260 14,184, % 4.76% 7.32% 99.81% 0.00% ,000 15,250,907 15,250, % 4.82% 7.41% 99.90% 0.00% ,000 16,393,181 16,393, % 4.87% 7.50% 99.95% 0.00% ,000 17,616,441 17,616, % 4.93% 7.58% 99.98% 0.00% ,000 18,926,430 18,926, % 4.98% 7.66% 99.99% 0.00% ,000 20,329,298 20,329, % 5.03% 7.74% % 0.00% ,000 21,831,629 21,831, % 5.08% 7.81% % 0.00% ,000 23,440,475 23,440, % 5.12% 7.88% % 0.00% ,000 25,163,389 25,163, % 5.17% 7.95% % 0.00% ,000 27,008,457 27,008, % 5.21% 8.01% % 0.00% ,000 28,984,340 28,984, % 5.25% 8.07% % 0.00% ,000 31,100,314 31,100, % 5.29% 8.13% % 0.00% ,000 33,366,310 33,366, % 5.32% 8.19% % 0.00% Client: ,000 35,792,965 35,792, % 5.36% 8.24% % 0.00% ,330,686 38,330, % 5.39% 8.30% % 0.00% ,048,332 41,048, % 5.42% 8.35% % 0.00% ,958,659 43,958, % 5.46% 8.39% % 0.00% ,075,328 47,075, % 5.49% 8.44% % 0.00%, Female Age 55, Preferred NonSmoker Note, if you are insurable at standard or better class, the insurance company believes that you will outlive the general population's life expectancy. The ROR on is 4.15%, if you survive life expectancy by 5 years. * Based on 35.00%Tax Bracket ** Source 2001 Valuation Basic Table, Select & Ultimate. Life expectancy, in this example, is measured from current age 66. Page 8 of 9 May 08, 2008 This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration and appropriate prospectuses. The data shown is taken from an illustration, the purpose of which is to show how the performance of the underlying investment accounts could affect the policy cash value and death benefit. It assumes a hypothetical rate of return and/or current interest crediting rate and may not be used to project or predict investment results. Unless indicated otherwise, these values are not guaranteed.

9 The of Life Insurance Prepared for Presented By Sample Agent ASSUMPTIONS CLIENT INFORMATION Family Name Client Name Age Sex Smoking Status Spouse's Name Age Sex Smoking Status Client's Tax Bracket Sample Client Mrs. 55 Female Preferred NonSmoker n/a n/a n/a n/a 35.00% Explanation Name of family for the proposed plan Given name of the first client Age of the first client (required) Sex of the first client (required) Underwriting class of the first client (required) Given name of the second client Age of the second client (if any) Sex of the second client (required) Underwriting class of the second client (required) Client's Tax Rate PLAN INFORMATION Proposal Year 2008 Proposal year INSURANCE POLICY INFORMATION Type of Single Life Name Protection VUL State Colorado Initial $5,000,000 $60, Years for s* 66 Rate 7.09% Survivorship or Single Life Total death benefit Annual Number of years to pay premiums Interest rate net of mortality expense & investment management fees. See base ledger for details This is a supplemental illustration authorized for distribution only when preceded or accompanied by a basic illustration and appropriate prospectuses. The data shown is taken from an illustration, the purpose of which is to show how the performance of the underlying investment accounts could affect the policy cash value and death benefit. It assumes a hypothetical Note: Clients rate should of return carefully and/or current review interest all client crediting inputs, rate as and summaries may not be based used to upon project inaccurate or predict assumptions investment results. may Unless greatly indicated impact otherwise, analysis these results. values All are growth not guaranteed. rates are hypothetical and are not guaranteed.. Page 9 of 9 May 08, 2008

10 A Variable Universal Life Insurance Valuable Information About Your Life Insurance Illustration The purpose of this illustration is to show how the performance of the underlying investment account could affect the policy surrender value and death benefit. This illustration is hypothetical and may not be used to predict or project actual performance. This illustration has been personalized for your particular objectives. This is an illustration, not a contract and must be preceded or accompanied by a current prospectus. The prospectus contains complete details on investment objectives, risks, fees, charges and expenses as well as other information about the investment company which should be carefully considered. Please read the prospectus carefully containing this and other information on the product and the underlying portfolios and consider these factors carefully before investing. All surrender values and death benefits are shown as of the end of the year unless noted. Option 1 The illustrated is the Base Face Amount plus any Required Additional. Loans and withdrawals will reduce the policy. The reflects total loan plus any loan interest due. Required Additional The will automatically be increased if necessary to maintain the minimum amount of insurance needed to comply with current federal tax law (Section 7702 of the Internal Revenue Code). This will ensure that your policy maintains the favorable tax treatment associated with being a life insurance policy. No-Lapse Guarantee The No-Lapse Guarantee illustrated ensures the policy will stay in force for 20 years regardless of actual investment returns provided the No-Lapse Guarantee Cumulative Test is met. During the No-Lapse Guarantee Period, if the Surrender falls to zero or below, coverage will continue if the cumulative premiums paid since the policy was issued, net of Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) withdrawals, net of Debt, are greater than or equal to $39, multiplied by the number of years coverage has been in effect. There is no additional charge for the No-Lapse Guarantee included in your policy. Rider termination or change and or face amount increases or decreases may cause this premium to be recalculated. If a policy loan is outstanding and the falls to zero, the illustration will stop. However, if the No-Lapse Guarantee requirements are satisfied, the contract will remain in effect. In the first five policy years, the base policy and the Supplemental Face Amount will remain in force provided the No-Lapse Guarantee Cumulative Test is satisfied. In policy year six and after, if the Surrender falls to zero or below, you must pay additional premiums. If you do not pay additional premiums, the Supplemental Face Amount may lapse even if your base policy does not lapse. Once this benefit is terminated, it cannot be reinstated. Extended No-Lapse Guarantee You have elected an Extended No-Lapse Guarantee period of 66 years. The Extended No-Lapse Guarantee illustrated ensures the policy will stay in force for 66 years regardless of actual investment returns provided either the Extended No-Lapse Guarantee Cumulative Test or the Early Funding Extended Cumulative Test is met as described below. During the Extended No-Lapse Guarantee period, if the net cash surrender value falls to zero or below, coverage will continue and the Extended No-Lapse Guarantee Cumulative Test will be satisfied if the cumulative premiums paid since the policy was issued, net of withdrawals, net of policy debt, are greater than or equal to $60, multiplied by the number of years coverage has been in effect. At the end of Year 10, the Early Funding Extended Cumulative Test will be satisfied if the cumulative premiums paid since the policy was issued, net of withdrawals, net of policy debt, are greater than or equal to $1,329, During the Page 1 of 12

11 A Variable Universal Life Insurance Valuable Information About Your Life Insurance Illustration (cont'd) Extended No-Lapse Guarantee period, if the net cash surrender value falls to zero or below, coverage will continue and the Early Funding Extended Cumulative Test will be satisfied if the cumulative premiums paid since the policy was issued, net of withdrawals, net of policy debt, are greater than or equal to $1,329, provided the test was satisfied at the end of the Year 10. This test will cease to apply if the test was not satisfied at the end of policy year 10. Lifestyle Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) Total Portfolio Annual Expenses Lifestyle Growth 0.91% s This illustration assumes that planned premiums are paid at the beginning of each modal period indicated. Rider termination or change and or face amount increases or decreases may cause this premium to be recalculated. The charge for the Extended No-Lapse Guarantee is deducted monthly from the policy value at issue. The Extended No-Lapse Guarantee does not apply to any Supplemental Face Amount. Assumed Gross Rate Assumed rates are hypothetical and may not represent past or future actual performance. Actual investment rates of return may be higher or lower than those illustrated and will fluctuate in response to changing market conditions and the subaccount allocation chosen. In determining the net rate, this illustration assumes 0.91% total portfolio annual expenses based on an arithmetic average of the Subaccount Allocation shown on the Summary Page. This hypothetical illustration does not reflect investment, if any, in the Fixed Account. Each of the Lifestyle funds is a "fund-of funds" that invest in other underlying funds. To maintain target allocations for each Lifestyle fund, the underlying funds may be rebalanced periodically. The "Total Portfolio Annual Expenses" for each Lifestyle fund listed below include fees and expenses incurred indirectly as a result of its investment in these underlying funds and are based on target allocations as of April 28, Underlying Fund Fees and Expenses are estimated, not actual, amounts are based on the current fiscal year for the Lifestyle funds. Subaccount Allocation Actual charges assessed against each subaccount vary as follows: Charge Charge of 8% of premium will be deducted from each premium for the first 5 years and 2% of premium will be deducted from each premium for policy years 5 and later. The maximum premium charge is 8% in all years. Monthly Administrative Charge Monthly Administrative Charge of $15 in all policy years, current and guaranteed. Base Face Amount Charge Base Face Amount Charge is an additional $0.238 per 1,000 of Base Face Amount per policy month. It will be deducted for the first four policy years. A separate per 1,000 Base Face Amount Charge will be deducted for the first four policy years of any face increase. This charge varies by age, sex, and risk class. Cost of Insurance Current insurance charges are based on company experience. The current rates may change, but are guaranteed never to exceed the maximum rates. Maximum rates reflect the 2001 CSO Mortality Table. Asset Based Risk Charge A charge to cover the risk of adverse mortality and expense is deducted monthly from the. The charge is a percentage of that portion of your allocated to variable investment options. The current percentages on the policy value allocated to the variable investment options are 0.075% for the policy years 1 to 15 on current and guaranteed basis, Page 2 of 12

12 A Variable Universal Life Insurance Valuable Information About Your Life Insurance Illustration (cont'd) 0.000% on current basis and 0.020% on guaranteed basis thereafter for all policy years. Gain or Loss/Interest Credited This is the investment gain/loss on the based on the rate of return of your policy's investment options selected or the interest credited on the Fixed Account, including the amount of interest credited on the Loan Account. The is the total dollar value of all investment accounts held in the policy and/or the Fixed Account, plus the value of any Loan Account. Withdrawals Withdrawals reduce the and the. Withdrawals, if illustrated, are assumed taken at the beginning of the year. For each withdrawal a fee equal to the lesser of $25 or 2% of the withdrawal will be deducted from the. Loans loans may be taken against at any time and if illustrated, are assumed to be taken at the beginning of the year. The maximum loan amount available is the greater of a) 90% of the Surrender less any indebtedness and b) the Surrender less any indebtedness and less policy charges and loan spread projected to the end of the policy year. This illustration assumes a policy loan interest rate of 4.25 % in years 1-10, 3.00 % thereafter (guaranteed not to exceed 4.25% in years 1-10, 3.25% thereafter). Interest is currently credited to the Loan Account at an interest rate of 3.00% in all years. This rate is guaranteed. The loan interest rate is fixed. Loan interest is payable in arrears. Annual Loan Interest This is the interest charged on the outstanding Debt. In the event that you do not pay the loan interest charged in any Year, it will be borrowed against the policy and added to the Debt in arrears at the Anniversary. Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) Surrender The Surrender is the amount available at the end of each year and reflects all applicable charges. This amount is shown net of withdrawals and total loan plus interest due. If the policy terminates for any reason, the amount of any outstanding loan (that was not previously considered income) could result in a considerable tax. Under certain situations involving large amounts of outstanding loans, you might find yourself having to choose between high premium requirements to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur. Please consult your tax advisor for further information. s/riders This illustration may include optional additional benefits or insurance riders on the insured. The annual charge for additional benefits or riders is deducted from the in equal installments. Overloan Protection Rider The Overloan Protection Rider will prevent your policy from lapsing when, on any policy month, the outstanding indebtedness on the policy equals or exceeds the multiplied by a certain percentage, not to exceed 95%. Exercise of this rider will result in a "paid up" status. In order to be eligible for this rider, the insured must be at least 75 years old and the policy must have been inforce for at least 15 years. In order for the rider to be invoked, the Indebtedness must exceed the Total Face Amount of your policy but be less than minus a one-time charge for exercising the rider. Upon the execution of this rider, a Level will apply to your policy. After deduction of a one-time charge, all unloaned policy value will be transferred to the Fixed Account at the current Fixed Account rate, where the guaranteed rate is not less than 3%. No additional policy transactions or policy changes will be allowed and no further monthly deductions will be taken. Your total will now be equal to the Total Face Amount plus any Required Additional less any indebtedness. This rider may not be available in all states. Page 3 of 12

13 A Variable Universal Life Insurance Valuable Information About Your Life Insurance Illustration (cont'd) Continuation at Age 121 This offers protection from the possibility of outliving coverage. Provided your coverage is in effect on the policy anniversary nearest the date on which the Life Insured reaches attained age 121, coverage will continue after age 121 and interest will be credited. No additional charges, other than those for any outstanding policy loans, will be deducted. Taxation of Life Insurance Although the information contained in this illustration is based on certain tax and legal assumptions, we suggest that you seek professional counsel regarding the interpretation of current tax laws and accounting practices as they relate to your actual situation. The Technical and Miscellaneous Revenue Act (TAMRA) of 1988 classifies some policies as Modified Endowment Contracts (MECs). Distributions from these policies (excluding s but including policy loans and withdrawals) are taxed differently and may be subject to an IRS 10% penalty tax. The initial annual 7-pay premium for this policy is $291, Based on our interpretation of TAMRA, this policy as illustrated would not be considered a Modified Endowment Contract (MEC). Employer-owned Life Insurance. Where the owner of the policy is the employer of the insured, Section 101(j) of the Internal Revenue Code specifies a number of requirements in order for life insurance death benefits to be excluded from income taxation. Potential insureds must be limited to the employer s directors and "highly compensated" employees (as defined by the law). Also, before the issuance of the policy, the potential insured must (1) be notified in writing that the employer/policyowner intends to insure the employee's life and the maximum face amount for which the employee could be insured; (2) give his or her written consent to being a life insured under the policy, and agree that such coverage may continue after the life insured terminates employment; and (3) be informed in writing that the employer/policyowner will be a beneficiary of any proceeds payable upon the death of the employee. Finally, the policyowner is required to keep records and make an annual report concerning its Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) employer-owned life insurance policies. Taxpayers should seek the counsel of qualified tax advisors to determine the applicability of IRC 101(j) or other provisions of federal tax law and/or compliance with the requirements of any such law or regulation. Other Considerations Protection VUL is issued by John Hancock Life Insurance Company (U.S.A.) of Boston, MA and distributed by John Hancock Distributors LLC through other broker dealers appointed by John Hancock Distributors LLC,197 Clarendon Street, Boston, MA John Hancock Life Insurance Company (U.S.A.) consistently receives high financial strength ratings from independent rating agencies such as Fitch Ratings, A.M. Best, Standard & Poors, and Moody's. These ratings do not apply to the safety and performance of separate accounts. For more information, please visit our website at John Hancock Life Insurance Company (U.S.A.) is committed to offering the highest quality Annuity, Life Insurance and Pension products to our clients. Its family of products has been built around a powerful combination of investment options chosen with the goal of providing attractive, risk adjusted returns and broad diversification across asset classes, investment styles and asset managers. With John Hancock Life Insurance Company (U.S.A.)'s broad product lines, competitive underwriting, excellent ratings and quality customer service, John Hancock Life Insurance Company (U.S.A.) is committed to providing quality products designed to help create and preserve wealth for clients. Page 4 of 12

14 A Variable Universal Life Insurance Basic Illustration Summary Coverage Summary Initial Initial Coverage Description Amount Base Face Amount - Level for all years $5,000,000 $60, Additional Coverage On Insured Overloan Protection Rider Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) Subaccount Allocation Lifestyle Lifestyle Growth 100% Summary State Colorado Option 1 From 1 Thru 66 Definition of Life Insurance GPT Payment Mode Annual Charges Current Assumed Interest Rate 8.00% From 1 Thru 66 Loan Interest Rate 4.25% 3.00% From 1 Thru 10 From 11 Thru 66 Owner Tax Bracket 35.00% From 1 Thru 66 Initial 7-Pay Target $291, $87, Minimum Initial $3, Yr. No-Lapse Guarantee 66 Yr. Extended No-Lapse Guarantee Early Funding ENLG $39, $60, $1,329, Initial Guideline Annual $113, Initial Guideline Single $1,327, If elected on the Details form. Page 5 of 12

15 A Variable Universal Life Insurance Detailed s Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) Year EOY Age Planned Outlay ,000 60,000 35, ,000, ,000 60,000 69,871 9,871 5,000, ,000 60, ,204 44,204 5,000, ,000 60, ,076 80,826 5,000, ,000 60, , ,829 5,000, ,000 60, , ,055 5,000, ,000 60, , ,821 5,000, ,000 60, , ,639 5,000, ,000 60, , ,024 5,000, ,000 60, , ,478 5,000,000 Totals: 600, ,000 Surrender ,000 60, , ,503 5,000, ,000 60, , ,559 5,000, ,000 60, , ,418 5,000, ,000 60, , ,824 5,000, ,000 60, , ,541 5,000, ,000 60, , ,083 5,000, ,000 60, , ,611 5,000, ,000 60,000 1,051,190 1,051,190 5,000, ,000 60,000 1,145,843 1,145,843 5,000, ,000 60,000 1,244,586 1,244,586 5,000,000 Totals: 1,200,000 1,200, ,000 60,000 1,348,065 1,348,065 5,000, ,000 60,000 1,456,468 1,456,468 5,000, ,000 60,000 1,570,056 1,570,056 5,000, ,000 60,000 1,689,175 1,689,175 5,000, ,000 60,000 1,814,333 1,814,333 5,000, ,000 60,000 1,946,221 1,946,221 5,000, ,000 60,000 2,085,716 2,085,716 5,000, ,000 60,000 2,233,897 2,233,897 5,000, ,000 60,000 2,392,048 2,392,048 5,000, ,000 60,000 2,561,678 2,561,678 5,000,000 Totals: 1,800,000 1,800,000 Page 6 of 12

16 A Variable Universal Life Insurance Detailed s (cont'd) Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) Year EOY Age Planned Outlay ,000 60,000 2,742,756 2,742,756 5,000, ,000 60,000 2,937,037 2,937,037 5,000, ,000 60,000 3,146,593 3,146,593 5,000, ,000 60,000 3,373,865 3,373,865 5,000, ,000 60,000 3,621,715 3,621,715 5,000, ,000 60,000 3,895,562 3,895,562 5,000, ,000 60,000 4,198,932 4,198,932 5,000, ,000 60,000 4,535,071 4,535,071 5,000, ,000 60,000 4,907,922 4,907,922 5,000, ,000 60,000 5,314,889 5,314,889 5,314,889 Totals: 2,400,000 2,400,000 Surrender ,000 60,000 5,752,698 5,752,698 5,752, ,000 60,000 6,221,548 6,221,548 6,221, ,000 60,000 6,723,640 6,723,640 6,723, ,000 60,000 7,261,330 7,261,330 7,261, ,000 60,000 7,837,142 7,837,142 7,837, ,000 60,000 8,453,779 8,453,779 8,453, ,000 60,000 9,114,136 9,114,136 9,114, ,000 60,000 9,821,312 9,821,312 9,821, ,000 60,000 10,578,627 10,578,627 10,578, ,000 60,000 11,389,635 11,389,635 11,389,635 Totals: 3,000,000 3,000, ,000 60,000 12,258,144 12,258,144 12,258, ,000 60,000 13,188,230 13,188,230 13,188, ,000 60,000 14,184,260 14,184,260 14,184, ,000 60,000 15,250,907 15,250,907 15,250, ,000 60,000 16,393,181 16,393,181 16,393, ,000 60,000 17,616,441 17,616,441 17,616, ,000 60,000 18,926,430 18,926,430 18,926, ,000 60,000 20,329,298 20,329,298 20,329, ,000 60,000 21,831,629 21,831,629 21,831, ,000 60,000 23,440,475 23,440,475 23,440,475 Totals: 3,600,000 3,600,000 Page 7 of 12

17 A Variable Universal Life Insurance Detailed s (cont'd) Initial $5,000,000 Option 1; Guideline Test Assuming Current Charges and an Initial Gross Rate of 8.00% ( 7.09%) Year EOY Age Planned Outlay ,000 60,000 25,163,389 25,163,389 25,163, ,000 60,000 27,008,457 27,008,457 27,008, ,000 60,000 28,984,340 28,984,340 28,984, ,000 60,000 31,100,314 31,100,314 31,100, ,000 60,000 33,366,310 33,366,310 33,366, ,000 60,000 35,792,965 35,792,965 35,792, ,330,686 38,330,686 38,330, ,048,332 41,048,332 41,048, ,958,659 43,958,659 43,958, ,075,328 47,075,328 47,075,328 Totals: 3,960,000 3,960,000 Surrender Page 8 of 12

18 Year John Hancock Life Insurance Company (U.S.A.) A Variable Universal Life Insurance Summary of s Planned 1 60,000 15, ,000,000 17, ,000,000 35, ,000, ,000 27, ,000,000 34, ,000,000 69,871 9,871 5,000, ,000 37, ,000,000 49, ,000, ,204 44,204 5,000, ,000 44, ,000,000 62,194 4,944 5,000, ,076 80,826 5,000, ,000 62,464 5,464 5,000,000 88,058 31,058 5,000, , ,829 5,000, ,000 77,657 23,407 5,000, ,749 58,499 5,000, , ,055 5,000, ,000 89,613 46,613 5,000, ,967 92,967 5,000, , ,821 5,000, ,000 98,076 67,076 5,000, , ,329 5,000, , ,639 5,000, , ,992 83,992 5,000, , ,631 5,000, , ,024 5,000, , , ,609 5,000, , ,958 5,000, , ,478 5,000,000 Totals: 600, % Assumed Gross Rate (-0.91 % Rate) Maximum 0% Charges 0% Surrender Initial $5,000,000 Option 1; Guideline Test 8.00% Assumed Gross Rate (7.09% 8.00 Rate) Maximum Charges Surrender 8.00% Assumed Gross Rate (7.09% 8.00 Rate) Current Charges Surrender 11 60, , ,061 5,000, , ,253 5,000, , ,503 5,000, ,000 93,425 93,425 5,000, , ,361 5,000, , ,559 5,000, ,000 80,770 80,770 5,000, , ,079 5,000, , ,418 5,000, ,000 62,489 62,489 5,000, , ,478 5,000, , ,824 5,000, ,000 38,015 38,015 5,000, , ,599 5,000, , ,541 5,000, ,000 6,990 6,990 5,000, , ,943 5,000, , ,083 5,000, , ,000, , ,165 5,000, , ,611 5,000, , ,000, , ,396 5,000,000 1,051,190 1,051,190 5,000, , ,000, , ,736 5,000,000 1,145,843 1,145,843 5,000, , ,000,000 48,781 48,781 5,000,000 1,244,586 1,244,586 5,000,000 Totals: 1,200, , ,000, ,000,000 1,348,065 1,348,065 5,000, , ,000, ,000,000 1,456,468 1,456,468 5,000, , ,000, ,000,000 1,570,056 1,570,056 5,000, , ,000, ,000,000 1,689,175 1,689,175 5,000, , ,000, ,000,000 1,814,333 1,814,333 5,000, , ,000, ,000,000 1,946,221 1,946,221 5,000, , ,000, ,000,000 2,085,716 2,085,716 5,000, , ,000, ,000,000 2,233,897 2,233,897 5,000, , ,000, ,000,000 2,392,048 2,392,048 5,000, , ,000, ,000,000 2,561,678 2,561,678 5,000,000 Totals: 1,800,000 Page 9 of 12

19 Year John Hancock Life Insurance Company (U.S.A.) A Variable Universal Life Insurance Summary of s (cont'd) Planned 31 60, ,000, ,000,000 2,742,756 2,742,756 5,000, , ,000, ,000,000 2,937,037 2,937,037 5,000, , ,000, ,000,000 3,146,593 3,146,593 5,000, , ,000, ,000,000 3,373,865 3,373,865 5,000, , ,000, ,000,000 3,621,715 3,621,715 5,000, , ,000, ,000,000 3,895,562 3,895,562 5,000, , ,000, ,000,000 4,198,932 4,198,932 5,000, , ,000, ,000,000 4,535,071 4,535,071 5,000, , ,000, ,000,000 4,907,922 4,907,922 5,000, , ,000, ,000,000 5,314,889 5,314,889 5,314,889 Totals: 2,400, % Assumed Gross Rate (-0.91 % Rate) Maximum 0% Charges 0% Surrender Initial $5,000,000 Option 1; Guideline Test 8.00% Assumed Gross Rate (7.09% 8.00 Rate) Maximum Charges Surrender 8.00% Assumed Gross Rate (7.09% 8.00 Rate) Current Charges Surrender 41 60, ,000, ,000,000 5,752,698 5,752,698 5,752, , ,000, ,000,000 6,221,548 6,221,548 6,221, , ,000, ,000,000 6,723,640 6,723,640 6,723, , ,000, ,000,000 7,261,330 7,261,330 7,261, , ,000, ,000,000 7,837,142 7,837,142 7,837, , ,000, ,000,000 8,453,779 8,453,779 8,453, , ,000, ,000,000 9,114,136 9,114,136 9,114, , ,000, ,000,000 9,821,312 9,821,312 9,821, , ,000, ,000,000 10,578,627 10,578,627 10,578, , ,000, ,000,000 11,389,635 11,389,635 11,389,635 Totals: 3,000, , ,000, ,000,000 12,258,144 12,258,144 12,258, , ,000, ,000,000 13,188,230 13,188,230 13,188, , ,000, ,000,000 14,184,260 14,184,260 14,184, , ,000, ,000,000 15,250,907 15,250,907 15,250, , ,000, ,000,000 16,393,181 16,393,181 16,393, , ,000, ,000,000 17,616,441 17,616,441 17,616, , ,000, ,000,000 18,926,430 18,926,430 18,926, , ,000, ,000,000 20,329,298 20,329,298 20,329, , ,000, ,000,000 21,831,629 21,831,629 21,831, , ,000, ,000,000 23,440,475 23,440,475 23,440,475 Totals: 3,600,000 Page 10 of 12