JH Essential Income. A Lifetime of Guaranteed Income. A Single-Premium Immediate Fixed Annuity 0110: IA0003

Transcription

1 JH Essential Income A Single-Premium Immediate Fixed Annuity A Lifetime of Guaranteed Income 0110: IA0003

2 Fixed Annuity Update june 2012 Certain features related to this product have been revised. Please contact your financial advisor if you have any questions. Discontinuation of Family Resource Benefits Effective June 1, 2012, John Hancock is discontinuing eldercare information resource services that were previously an additional feature of certain John Hancock annuity contracts.* This decision was based on extremely low utilization rates for the services. Marketing materials identify these information services as Senior Link, Advantage List, CARESolutions, or Family Resources. The Nursing Home-Chronic/Critical Illness Waiver, which is offered on some products in conjunction with SeniorLink and Advantage List as part of CARESolutions, will not be affected and will remain available. * Changes apply to in force and new contracts of all John Hancock fixed immediate annuities, fixed deferred book value and market value adjusted annuities, as well as Revolution, Declaration and Patriot variable annuities. Contact your financial advisor or visit for more information, including the prospectus that contains complete details on investments, as well as other information about the insurance company, which should be carefully considered. Please read the prospectus carefully prior to purchasing. The prospectus contains this and other information on the product. Typically, MVA fixed annuities do not have up-front sales loads or ongoing expenses. The insurance company s costs are built into the interest rate paid on the contract. Additionally, your contract may be subject to an early withdrawal charge (also called a contingent deferred sales charge). You should consult the prospectus for the MVA fixed annuity that you are considering for the specific early withdrawal charge schedule and the market value adjustment calculation. To invest safely in a market value adjusted annuity, you should fully evaluate the financial strength of the issuing insurance company and carefully read the annuity product disclosure. John Hancock Fixed Annuities are distributed by John Hancock Distributors LLC, member of FINRA. An annuity is a long-term contract designed for retirement purposes, such as asset accumulation and distribution, and may not be suitable for meeting short-term objectives. John Hancock Fixed Annuities are issued and administered by John Hancock Life Insurance Company (U.S.A.), Bloomfield Hills, MI (not licensed in New York). Issuer and Administrator John Hancock Life Insurance Company (U.S.A.), Bloomfield Hills, MI (not licensed in NY) New York: John Hancock Life Insurance Company of New York, Valhalla, NY John Hancock Annuities Service Center P.O. Box Boston, MA New York Contracts: P.O. Box Boston, MA All rights reserved. 0512:FAUPLTR

3 Prepare yourself for the future There are many challenges that face today s retirees. JH Essential Income can help you respond to each of these challenges. 1. Increased financial responsibility Pension and Social Security benefits typically provide only 41% of the average retiree s income. Today s retirees, therefore, have the increased responsibility of having to create nearly 60% of their own retirement income often through a combination of personal investments and earned income People are living longer By the year 2030, the older population will more than double to 71.5 million. Most retirees should prepare to spend 20 or more years without a source of regular income other than Social Security, if you retire at age JH Essential Income can help give you the security of knowing you are prepared for life, even with increased longevity. 3. Inflation Inflation can decrease your purchasing power over time. As prices rise, the dollar buys less. Even at a relatively low 3% inflation rate, the buying power of $1,000 in 1986 would have fallen to $544 by JH Essential Income s automatic payment increase can help offset rising costs of living. (See the Annual Increase Option.) Sit back, relax, and enjoy your retirement Would you like to relax with a steady stream of income you can count on? John Hancock s Essential Income Fixed Annuity has been designed to support your everyday expenditures and help you create a pension-like income stream. As you enjoy your retirement, make these years your best with security, stability, and a lifetime of guaranteed income. 1 JH Essential Income has been created to help you plan ahead for the risks that may impact your retirement. It also provides you and your family with valuable access to health and lifestyle referral services as well as programs that can help you cope with challenging care situations. 4. The rising cost of medical care A couple retiring today at age 65 will spend about $190,000 during their retirement to pay health care expenses that aren t covered by Medicare. 5 JH Essential Income provides you with comprehensive referral services and eldercare programs to help you and your family better manage challenging care situations. 1 Applicable to lifetime payment options only. 2 Social Security Administration, Office of Policy, Income of the Aged Chartbook, 2002 (released September 2004). 3 A profile of older Americans, Bureau of Labor Statistics, 12/31/ Improving Retirement Readiness, 02/2006, Fidelity Investments.

4 Quick Reference Guide Purchase Payment: $10,000 or more (qualified and nonqualified) Issue Ages: Life payment options for ages 5 through 85 Period Certain options for ages 5 through 90 Income Frequency: Income annuity payments are available monthly, quarterly, semiannually, or annually Payment options that best fit your needs Your asset is converted into a series of payments based on the annuitant s age and gender, annuity option selected, and current rates available. JH Essential Income can offer you a lifetime of guaranteed income, income for a selected period of time, or a combination of both. You can select one of the following income payment periods: Payments for life (single life annuity) Income annuity payments are made for the annuitant s lifetime. Payments stop upon the annuitant s death. Payments for two lives (joint and survivor annuity) Income annuity payments are made as long as either of the annuitants are still living. Income annuity payments can remain level or be reduced upon the death of one of the annuitants. Income annuity payments stop upon the survivor s death. Period Certain Income annuity payments are made for a period specified by the owner, from 2 through 30 years (if available). Income annuity payments continue until the end of that period, regardless of whether an annuitant is still living. Payments for life or for two lives, with a Period Certain Income annuity payments are made as long as any annuitant is still living, or for a certain period specified by the owner, whichever is longer. Income annuity payments can remain level or be reduced upon the death of one of the annuitants. Payments for life or for two lives, with an installment refund Income annuity payments are made as long as any annuitant is still living, or until the entire purchase payment has been paid out in the form of income annuity payments to a beneficiary, whichever is longer. Payments for life or for two lives, with a cash refund Income annuity payments are made as long as any annuitant is living. When no annuitant is living, any remaining purchase amount will be paid in a lump sum to a beneficiary. The remaining purchase amount, if any, will be the amount of the original purchase payment less all income annuity payments that have been made. Hypothetical Scenarios See how our Seniorlink Health & Lifestyle benefit has helped others 6 Gregory Smith, a John Hancock Annuity customer, had phoned Seniorlink 7 to help him access information regarding a nursing home. Gregory was living alone and currently had no family nearby. Gregory spoke to someone at Seniorlink, and through several conversations, learned more about his situation and abilities. Seniorlink was able to suggest an alternative solution to the nursing home: a combination of assistance at home and participation in a local day program for adults. This solution cost Gregory approximately $500 per month. This was considerably less than the $3,000 $6,000 per month he might have paid for unnecessary nursing care, and allowed Gregory to maintain his independence. Lisa Jones, whose mother recently suffered a stroke, called Seniorlink for assistance. Lisa and her family knew that significant changes to their daily lives were necessary. Her mother needed rehabilitation for a period of time, and once she returned home, would require help caring for her husband and her household. Lisa had siblings, but none of them lived in the area, so she was solely responsible for arranging assistance for her parents needs while working a full-time job. When she called Seniorlink,

5 Take a look at how JH Essential Income has helped others make their money last: Client: Kevin (age 68) and Jessica (age 65) Annual Social Security and Pension payments $30,000 Status: Married and retired with $400,000 in liquid assets. They need $36,000 a year to cover essential expenses. Concern: Their combined Social Security and pension leaves them short by $6,000 a year. The JH Essential Income Solution: Using only $90,580 in the Joint & Last Survivor income option, Kevin and Jessica are guaranteed $6,000 a year for the rest of their lives. JH Essential Income currently meets all of their income needs, so they do not run the risk of having to liquidate part of their investment portfolio. Client: Sophia Penney (age 70) Social Security $1,100 month Pension stopped upon her husband s death. Status: Sophia is a recent widow with two grown children. She received $500,000 from a life insurance policy when her husband of 45 years died unexpectedly. the only thing that Lisa knew for sure was that her parents were not open to the idea of leaving their home. Seniorlink responded by giving Lisa the names of local services that would support her parents at home. These services included meal preparation, housekeeping services, continued therapy for her mother, and companion service to keep an eye on her mother while her father took a break. Lisa was pleased, as many people are, to learn of the resources available. Even before her mother returned home, they were able to test-run some services and put in place a comfortable system for her homecoming. Lisa s parents were able to maintain their independent lifestyle and avoid becoming dependent on Lisa. Concern: Sophia needs guaranteed income of 2,800 every month for to pay for her housing expenses. She does not want to be concerned with regularly liquidating part of her investment portfolio to meet this income need, and after using her Social Security, she is short $1,700 ($20,400 a year). The JH Essential Income Solution: Sophia chose the Life with Cash Refund payout option. This allows her an income plan that converts $269,842 from the life insurance proceeds into a guaranteed payment for $1,700 a month enough to cover the balance of her monthly condo expenses. If Sophia dies unexpectedly, she will be able to leave the balance to her children and grandchildren. (Note: All prices and benefits are hypothetical)

6 Benefits Tax Deferral An immediate annuity distributes your money over several years, so you can spread out your taxes instead of paying a large tax bill on a lump-sum distribution. In many cases, a portion of your income payment is excluded from income tax altogether if your annuity is funded with nonqualified money. Each payment will consist of earned interest, which is reported as taxable income to the IRS, and a partial return of your original premium, which is money you ve already paid taxes on. Versatility You can choose to receive checks regularly (monthly, quarterly, semiannually, or annually) for the rest of your life or during a predetermined fixed period. The payment you receive will be based on a number of factors, including the initial premium amount, the annuitant s age and gender, 8 the annuity option chosen, and current interest rates. Refer to the JH Essential Income Fixed Annuity Meeting Your Needs worksheet for help in deciding which payment option is best for you. Annual Increase Option By electing this option, you can choose to have your initial income start lower, but your payments will increase each year by 1% to 6%, depending on the percentage you choose. By structuring your payments this way, you will help reduce the impact of inflation. As your living expenses increase over time, so will the dollar amount of your payments. Family Resource Benefits JH Essential Income s Family Resource Benefits offer professional health and lifestyle information at no extra charge. The benefits include discounts, referral services, and programs to help you and your family better understand and manage challenging care situations. 1. Seniorlink 7 This national eldercare program provides personalized information and advice on a variety of age-related care issues such as nursing homes, assisted living, home health care, home repair services, and legal services. Simply call Advantage List This is a program to help you save money. It provides competitive rates at over 10,000 nursing homes and home health care agencies across the nation with an average savings of approximately 10%. 9 LifePlans, 10 a leading long-term care services group, administers Advantage List. You can call them for more information at

7 Why John Hancock? Now more than ever, it is important to partner with a company that has the ability to meet the promises it makes, both today and in the future. From the roots of our product design, to our prudent investment philosophy, the conservative approach we take toward our business helps to protect the financial future of our clients. For more information, contact your financial professional. 6 These testimomials may not be representative of the experience of other clients. 7 Seniorlink is the current referral-service provider for many John Hancock business units. Actual costs will be contracted between service provider(s) and contract holders. Seniorlink is not associated with John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, or their affiliates. This program may be changed or discontinued at any time. 8 Gender is not a factor in MA or MT. 9 Actual costs of care vary greatly depending on the care provider and geographic location. Savings are not guaranteed and may be discontinued by the provider at any time. The average savings of 10% was estimated as of July LifePlans is the current referral-service provider for many John Hancock business units. LifePlans is not associated with John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, or their affiliates. This program may be changed or discontinued at any time. (Not available in PR.) An annuity is a long-term contract designed for retirement purposes, such as asset accumulation and distribution, and may not be suitable for meeting short-term objectives. John Hancock Fixed Annuities are issued and administered by John Hancock Life Insurance Company (U.S.A.), Bloomfield Hills, MI, (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY. Products and features may not be available in all states. All guarantees are subject to the claims-paying ability of the issuing insurance company. Not FDIC Insured Not Bank Guaranteed May Lose Value Not a Deposit Not Insured by Any Government Agency John Hancock Annuities Service Center P.O. Box 9505, Portsmouth, NH New York Contracts: P.O. Box 9506, Portsmouth, NH : IA0003 MLINY Policy Form Series: 07IFA