SELLER S GUIDE PROTECTION Everything you need to sell Protection UL & Protection SUL LIFE-5256 8/16 THIS MATERIAL IS FOR AGENT USE ONLY. NOT FOR DISTRIBUTION OR USE WITH THE PUBLIC.
Table of Contents Meet Our Top Performers... Page 1 The Price is Right... Page 2 For an Uncertain Future... Page 3 Delivering Performance and Value... Page 4 Understanding the Crediting Rate... Page 5 Cash Value for Greater Flexibility and Protection... Page 6 A Stable Product in Challenging Times... Page 7 Live A Healthy Life and Save... Page 8
Meet Our Top Performers John Hancock s Protection UL and Protection SUL minimize cost, maximize value, and offer some of the most affordable premiums in the industry. What do Protection UL and Protection SUL offer? Often the lowest premiums on the market: This can translate to a higher internal rate of return, 1 which means clients get the most death benefit value for their premium dollars. Funding flexibility: Protection UL is competitive in a wide variety of funding scenarios. After issue, the premium pattern can be altered to fit changing client needs and economic conditions if the crediting rate goes up, a lower premium may achieve the same result. Higher cash value accumulation potential than guaranteed UL (GUL). Less cash value volatility than typical indexed UL and variable UL (IUL and VUL) products. PROVISIONS GUARANTEED UL PROTECTION UL Lower premiums based on guaranteed assumptions 3 Lower premiums based on current assumptions 3 Better cash value performance 3 More flexibility to change funding after issue 3 Opportunity for lower premiums if crediting rates increase 3 This is a comparison of different products which vary in premiums, rates, fees, expenses, features and benefits. It cannot be used with the public and complete personalized policy illustrations for each representative company must be presented or discussed with your clients. Please have your clients consult their professional advisors to find out which type of life insurance is most suitable. Pay less, get more with Protection UL! 1
The Price is Right How do Protection UL s premiums compare to leading competitors? Protection UL offers very competitive premiums regardless of funding design. There is often a 10% or more price differential compared to leading competitors GUL and current assumption products. Take a look at the price differential between Protection UL and some leading GUL competitors: Single-Pays CARRIER AGE 50 AGE 60 AGE 70 Lincoln +117% +86% +71% Prudential +47% +30% +38% Nationwide +61% +57% +44% Ten-Pays CARRIER AGE 50 AGE 60 AGE 70 Lincoln +96% +53% +44% Prudential +29% +26% +22% Nationwide +38% +34% +25% Full-Pays CARRIER AGE 50 AGE 60 AGE 70 Lincoln +52% +19% +23% Prudential +23% +18% +14% Nationwide +10% +8% +10% Premium differentials are based on a Male, Best, Non Smoker, and a $1,000,000 Face Amount. The guarantee durations for each example are as follows: Age 50: Single-pay age 75, 10-Pay, age 76, level-pay, Age 79. Age 60: single-pay, age 79, 10-Pay, age 80, level-pay,age 81 Age 70: single-pay, age 87, 10-Pay, age 88, level-pay, age 88. The comparisons show competitors lifetime no-lapse guarantee premium to Protection UL s premium for $1 at maturity, based on current assumptions. Competitor information is current and accurate to the best of our knowledge as of September 2016. The data shown is taken from various company illustrations. Current interest rates may be different for each company and may not be guaranteed. The comparisons in this communication are of different products which vary in premiums, rates, fees, expenses, features and benefits. These comparisons cannot be used with the public and complete personalized policy illustrations for each representative company must be presented or discussed with your clients. Please have your clients consult their professional advisors to find out which type of life insurance is most suitable. If you re not showing the lowest premium in the market, someone else will! 2
For an Uncertain Future Which policy is better prepared for an uncertain future Guaranteed UL or Protection UL? A Protection UL policy offers: Lower premiums based on current assumptions Lengthy NLG periods that protect coverage in the event of declining crediting rates Premium flexibility to help clients prepare for an uncertain future Our LifeTrack policy management service A Guaranteed UL policy has: No exit options Premiums that would not decrease if crediting rates increased Inflexibility that can result in costly catch-up premiums or lapse What is LifeTrack? LifeTrack is a first-of-its kind policy management service from John Hancock that helps keep clients on track to meet their insurance goals. LifeTrack is: Dynamic LifeTrack Premiums change as policy experience unfolds Optional Owners may add or remove it from available products at any time Free of charge No cost to add this innovative tool An Easier Way to manage policies for you and your clients How can a Protection UL with LifeTrack give clients more peace of mind than a GUL? With traditional billing, it is the client s responsibility to adjust planned premiums as things change over time. If this responsibility is overlooked, last-minute premium adjustments can be much more costly than one might assume. Consider a client who pays the billed premium in all years but policy Year 11. He could buy a GUL with old fashioned billing, or he could buy a Protection UL with LifeTrack. YEAR AGE GUARANTEED UL (TRADITIONAL BILLING) PROTECTION UL (LIFETRACK BILLING) WHAT THEY RE BILLED WHAT THEY PAY WHAT THEY RE BILLED WHAT THEY PAY 10 60 $15,054 $15,054 $10,000 $10,000 11 61 $15,054 $0 $10,000 $0 12 62 $15,054 $15,054 $10,886 $10,886 13 63 $15,054 $15,054 $10,886 $10,886 14 64 $15,054 $15,054 $10,886 $10,886 15 65 $15,054 $15,054 $10,886 $10,886 +28 +78 $15,054 $88,475 $10,886 $10,886 Male 50, Preferred, level-pay with death benefit of $1,204,646. Protection UL solving for $1 at 121. Lincoln Guaranteed UL solving for lifetime guarantee. This is a supplemental illustration. Not all benefits and values are guaranteed. The assumptions on which the non-guaranteed elements are based are subject to change by the insurer. Actual results may be more or less favorable. 3
Delivering Performance and Value How does Protection UL s performance compare to Guaranteed UL? In many scenarios, Protection UL is a better choice than GUL. There are three directions in which crediting rates can trend. They can go up, stay flat, or move down. And there are three ways policy owners or their beneficiaries can realize value from a UL policy. They can surrender the policy, die early, or live a long life. Crediting Rates Rise: A Protection UL policy owner can often surrender the policy for more value than a GUL or keep the coverage for a lower premium even lower than originally illustrated. Crediting Rates Stay Flat: The policy will behave similarly to the sales illustration. That means it will deliver higher surrender value and lower premiums than the typical GUL. Crediting Rates Fall: If crediting rates go down and stay down over the long term, it is likely that Protection UL would offer more surrender value than a GUL. If the client dies early, the death benefit is secured by Protection UL s no-lapse guarantee, and the premium outlay is likely to be much lower than that required for a GUL. If the client lives a very long time and crediting rates stay very low throughout that period, GUL might make sense. Even then, however, it depends on how long the client lives and how low rates fall. Protection UL has your clients covered! RATES RISE RATES STAY FLAT RATES FALL Surrender Policy Protection UL Protection UL Protection UL Die Early Protection UL Protection UL Protection UL Outlive NLG Protection UL Protection UL It Depends While GUL relies on them, Protection UL is designed to outperform its guarantees! 4
Understanding the Crediting Rate What happens to Protection UL if crediting rates increase? The policy will perform better than previously illustrated. Higher rates could allow for increased cash values and lower premiums. FEMALE, 60, PREFERRED NON SMOKER, $1,000,000 FACE AMOUNT CREDITING RATE SCENARIO GUARANTEED UL PREMIUM PROTECTION UL PREMIUM Premium based on current crediting rate Premium if crediting rate increased 200 basis points Continue to use our own GUL with same premium of 16,779 $16,779 $12,145 This is a supplemental illustration. Not all benefits and values are guaranteed. The assumptions on which the non-guaranteed elements are based are subject to change by the insurer. Actual results may be more or less favorable. John Hancock s Protection UL premium is based on current assumptions and is guaranteed to age 82 and Guaranteed UL is based on lifetime guarantee. John Hancock s Guaranteed UL is based on a lifetime guarantee. The comparisons in this communication are of different products which vary in premiums, rates, fees, expenses, features and benefits. These comparisons cannot be used with the public and complete personalized policy illustrations for each representative company must be presented or discussed with your clients. Please have your clients consult with their professional advisors to find out which type of life insurance is most suitable. What happens to Protection UL if crediting rates decrease? Some people are concerned that today s low interest rate environment may persist over the long-term. Consider a client who wants to pay a single premium and maximize his coverage. With this design, the leading GUL will buy $1,000,000 of coverage with a premium of $283,034. With the same premium, Protection UL buys $1,400,000 40% more! If the interest rate drops after 10 years and never increases, Protection UL s post-sale flexibility gives the client a number of options: Option 1: Maintain his higher death benefit of $1.4 million if he decides the coverage runs long enough. Option 2: Reduce his death benefit in year 11 to the competitor s original level of $1 million. MALE 60, BEST CLASS, PAYING LEADING COMPETITOR S SINGLE-PAY PREMIUM OF $283,034 CREDITING RATE REDUCTION IN YEAR 11 OPTION 1 MAINTAIN DB OF $1.4M ALL YEARS OPTION 2 REDUCE DB TO $1M IN YEAR 11-0.5% Lifetime Lifetime -1.0% 96 Lifetime -1.5% 93 Lifetime -2.0% 92 Lifetime Premiums based on competitor s lifetime guarantee solve. Protection UL guaranteed to age 81 and runs as shown above based on current charges. Leading GUL competitor is Prudential. Competitor information is current and accurate to the best of our knowledge as of August 2016. The data shown is taken from various company illustrations. Current interest rates may be different for each company and may not be guaranteed. The comparisons in this communication are of different products which vary in premiums, rates, fees, expenses, features and benefits. These comparisons cannot be used with the public and complete personalized policy illustrations for each representative company must be presented or discussed with your clients. Please have your clients consult with their professional advisors to find out which type of life insurance is most suitable. 5
Cash Value for Greater Flexibility and Protection What are the benefits of having cash value in a UL policy? It allows for greater premium funding flexibility. It provides an exit strategy should a client s needs change. More death benefit and cash value potential John Hancock s Protection UL Death Benefit: $1,190,000 Composite Average GUL: $1,000,000 John Hancock Advantage: 19% higher death benefit and more cash for flexibility CASH SURRENDER VALUE $300,000 $250,000 $200,000 $150,000 $100,000 SURRENDER VALUES: PROTECTION UL VS. GUARANTEED UL MALE, 50, BEST RISK CLASS, PAYING $8,749 IN ALL YEARS John Hancock s Protection UL ($1,190,000 Death Benefit) Composite Guaranteed UL ($1,000,000 Death Benefit) $232,000 $50,000 $0 0 5 10 15 20 25 30 POLICY YEAR Protection UL premium is based on current assumptions and is guaranteed to age 81. Competitor premiums are guaranteed for lifetime. Competitor information is current and accurate to the best of our knowledge as of August 2016. The data shown is taken from various company illustrations. Current interest rates may be different for each company and may not be guaranteed. Underwriting class is based on Best Risk Class. Underwriting criteria will differ from company to company; we attempted to use comparable risk classes across all companies. The composite average is based on guaranteed UL policies currently marketed by leading providers of UL, excluding John Hancock, as indicated in the 2015 Q4 LIMRA International Universal Life Sales Summary. The comparisons in this communication are of different products which vary in premiums, rates, fees, expenses, features, and benefits. These comparisons cannot be used with the public and complete personalized policy illustrations for each representative company must be presented or discussed with your clients. Please have your clients consult their professional advisors to find out which type of life insurance is most suitable. The Guaranteed UL composite is based on Prudential, Lincoln, Nationwide, Midland, and Symetra. Policies and contracts on which the composite is based may not be available in all states. 35 Help your clients get the most out of their premiums! 6
A Stable Product in Challenging Times Protection UL looks unlike any other product on the market and we re quite proud of that. Prior to its launch in 2011, John Hancock recognized that customers could benefit from a new approach to Universal Life. Through sophisticated product engineering, customers are able to benefit from John Hancock s institutional investment expertise in both fixed income and alternative long-duration assets. As a result, Protection UL has been able to deliver consistent customer value even in a challenging economic environment. Take a look below to see how Protection UL s crediting rate has remained higher and more stable than those of its competitors. THEN AND NOW CURRENT ASSUMPTION UL CREDITING RATES IN 2011 AND 2016 PRODUCT 2011 2016 CHANGE Protection UL 5.20% 5.05% -0.15% Competitor A 3.75% 3.00% -0.75% Competitor B 5.20% 4.25% -0.95% Competitor C 5.15% 4.15% -1.00% Competitor D 4.25% 3.00% -1.25% Competitor E 4.25% 3.00% -1.25% Competitor F 4.65% 3.00% -1.65% Competitor G 4.90% 3.20% -1.70% Competitor H 5.40% 3.30% -2.10% Rates shown in gray are equal to the Guaranteed Minimum Rate for the given product. Competitor information is current and accurate to the best of our knowledge as of August 2016. Competitor products shown in order of chart: AIG Elite UL, Principal UL Accumulation II, Pacific Life Versa Flex Pro II - DB, AXA Athena UL, Nationwide YourLife Current Assumption UL, Lincoln LifeCurrent UL, Prudential UL Plus, and Protective ProClassic UL. Based on analysis of LIMRA International annualized premium with excess in all channels, Protection UL was the top-selling current assumption UL year end 2012, 2013, 2014 and 2015, and year to date 2016. Past performance is not a guarantee of future results. Protection UL represents the next generation of policy design 7
Live a Healthy Life and Save! John Hancock s Protection UL is the lowest-cost permanent life insurance policy in our portfolio; in many cases, it s the most affordable UL product in the industry. And now it s even better! Protection UL with Vitality rewards the everyday steps your clients take to stay healthy and inspires them to do even more. The healthier your clients are, the more they can save. MALE, 55, SUPER PREFERRED, $1,000,000 FACE AMOUNT, 10-PAY COMPANY PREMIUM DIFFERENCE John Hancock's Protection UL with Vitality $16,702 John Hancock s Protection UL (without Vitality) $18,456 11% Prudential $23,313 40% AIG $24,715 48% Nationwide $24,813 49% Principal $26,509 59% Lincoln $30,840 85% Protection UL premium is based on current assumptions, Gold Vitality Status being achieved every year, solving to endow at age 121 and is guaranteed for 23 years. Competitors premiums are based on lifetime guarantee. Competitor information is current and accurate to the best of our knowledge as of September 2016. The data shown is taken from various company illustrations. Current interest rates may be different for each company and may not be guaranteed. The comparisons in this communication are of different products which vary in premiums, rates, fees, expenses, features and benefits. These comparisons cannot be used with the public and complete personalized policy illustrations for each representative company must be presented or discussed with your clients. Please have your clients consult their professional advisors to find out which type of life insurance is most suitable. The John Hancock Vitality Program provides: The opportunity to significantly lower premiums 2 by living a healthy life A Vitality HealthyFood TM benefit with up to $600 in annual savings on healthy food purchases at thousands of stores nationwide 3 A free Fitbit device to track progress toward a healthy lifestyle Entertainment, shopping, gym, and travel rewards and discounts. Now, your clients can save money and earn valuable rewards by simply living a healthy life! 8
For more information, visit www.jhsalesnet.com 9
Strength. Stability. John Hancock. John Hancock s strong ratings, as judged by the major rating agencies, are a comprehensive measure of the company s financial strength and stability. This is important because these financial ratings reflect the life insurance company s ability to pay claims in the future. With over 150 years of experience, John Hancock offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents, and distribution partners. 1. The IRR 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. 2. Premium Savings will apply based on the Status attained by the life insured. Paying a premium that differs from an originally illustrated planned premium could reduce the duration of the policy s Death Benefit Protection feature or impact other features of the policy. 3. The HealthyFood benefit is available to your clients on qualifying purchases during their first Program Year regardless of their Vitality Status. In subsequent program years, the benefit will only be available to them if they achieved Gold or Platinum status. Vitality is the provider of the John Hancock Vitality Program in connection with your life insurance policy. John Hancock Vitality Program rewards are only available to the person insured under the eligible life insurance policy, are subject to change and are not guaranteed to remain the same for the life of the policy. Rewards and discounts are subject to change and are not guaranteed to remain the same for the life of the policy. Insurance policies and/or associated riders and features may not be available in all states. Some riders may have additional fees and expenses associated with them. Protection UL and SUL policies automatically include a no-lapse guarantee called Death Benefit Protection. This feature guarantees that the policy will not default, even if the cash surrender value falls to zero or below, provided that the Death Benefit Protection Value remains greater than zero and policy debt never exceeds the Policy Value. Once terminated, the Death Benefit Protection feature cannot be reinstated. See the product technical guide for additional details. For agent use only. Not for use with the public. Guaranteed product features are dependent upon minimum premium requirements and the claims-paying ability of the issuer. Insurance products are issued by John Hancock Life Insurance Company (U.S.A.), Boston, MA 02210 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. MLINY090816058