Understanding Performax Gold

Understanding Performax Gold

With you. Your whole life. Performax Gold is whole life insurance that gives you permanent, lifetime protection with Guaranteed Cash Values. The unique product features help you increase the value of your plan and maximize your wealth on a tax-deferred basis. As you will discover, it s much more than life insurance it s a powerful tool that can help you reach your long-term financial goals. With Performax Gold, flexibility is key. That s because it s easy to update your coverage as your lifestyle or business needs change. (All coverage changes are subject to underwriting approval.) Performax Gold lets you: Insure up to 20 people on one policy Combine both single and joint coverages in one policy Increase or decrease existing coverage or even add new coverage Make additional payments This guide gives you a quick overview of how Performax Gold works and how it helps you reach your financial goals. Your advisor can answer any further questions about Performax Gold. 2

Insurance coverage Every Performax Gold policy starts with insurance coverage that stays with you throughout your lifetime. This amount is guaranteed never to change. You can choose from three different types of insurance coverage: single life (insures one person) joint first-to-die (insures two or more people under the same coverage; we pay the death benefit when the first person dies) joint last-to-die, costs to last death (insures two or more people under the same coverage; we pay the death benefit when the last person dies and the insurance costs continue until the last death) What s unique about Performax Gold is that it allows you to have several insurance coverages under one policy, each insuring one person on a single-life coverage or two or more people on a joint coverage. You can also have a combination of two or more types of insurance coverage within the same policy. 3

Paying for your policy All insurance costs are based on the insured s age when the coverage is issued and the amounts are guaranteed never to increase for as long as the coverage remains in effect. You can decide to pay for your insurance coverage until age 100 or for only 15 years. It s your choice. What you pay for your policy includes the insurance coverage(s), any rider costs and the policy fee. The policy fee is the amount we charge to administer the policy. This fee is guaranteed and it s only payable for the first 15 years that you own the policy, no matter which cost duration you have selected for your insurance coverages. Additional payments If you want to increase the value within your policy you can choose to make additional payments. You can do this by putting extra money into the Accumulation Account (see page 5 for details on this account) or by purchasing Deposit Option Insurance. We will deduct a percentage from all additional payments. This is called a Load on Additional Payments and the contract guarantees that percentage amount won t increase for as long as you own the policy. Deposit Option payments Deposit Option Insurance is extra insurance coverage on your policy. Deposit Option payments are subject to annual and lifetime limits. You select these limits when we issue your policy and we will underwrite based on the amount you request. (Deposit Option payments are also subject to maximums for tax and administrative reasons.) The contract outlines both limits for your policy: the annual limit is updated on the anniversary statement since it changes every year based on the amount you paid in the previous policy year. If the amount you pay in any policy year to purchase Deposit Option Insurance is less than the limit for that year, it can impact the annual limit in future years. Also, if your deposits go over either the annual or lifetime limit, we will put any excess money into the Accumulation Account or into the Side Account, if the tax limits are exceeded. Payment Offset Plan One benefit of building the value within your policy is that you can use the value to pay your policy costs. This feature is called Payment Offset. Your ability to use Payment Offset is based on the value of your policy. If you make changes to your policy, withdraw money, or if the Performance Credit Rate changes, the values in your policy could change and you may not be able to remain on Payment Offset. 4

Performance Credit The Performance Credit is an amount your policy earns each year that helps increase your policy s cash value. The amount of the Performance Credit varies based on the amount and type of coverage you ve chosen and the performance of the Performax Gold Investment Fund. This Fund is a diversified portfolio of assets managed by Manulife s investment professionals. The Fund s yield is determined by the performance of the assets in the portfolio. The yield is smoothed to reduce volatility which, in turn, helps reduce the volatility of the Performance Credit. All insurance coverages and any Paid-up and/or Deposit Option Insurance you purchased will earn a Performance Credit if they re in effect on the policy anniversary. How the options work You can choose a different Performance Credit option for each insurance coverage and, subject to our administrative rules, you can change the option after the policy is issued. Paid-up Insurance: If you choose Paid-up Insurance, your Performance Credit earned on the insurance and Paid-up Insurance coverage is used to purchase more insurance that is paid up. That means there are no additional costs, since the Performance Credit covers the payment for this coverage. This Paid-up Insurance will also earn a Performance Credit, which is one more way Performax Gold helps you accumulate value in your policy. If you choose this Performance Credit Option, any Performance Credit earned on Deposit Option Insurance will be used to purchase additional Deposit Option Insurance. Term Option: This Performance Credit Option pays for a mix of Yearly Term Insurance, Paid-up Insurance and/or Deposit Option Insurance (if you have Deposit Option coverage). Based on the amount of Term Option coverage selected, Term Option can be eligible for either a 10-year guarantee or a lifetime guarantee. However, any substandard ratings on the coverage need to be within the limits outlined in the administrative guide. Accumulation Account: The Accumulation Account is an investment account within the policy that earns daily compounded interest. This interest is linked to the Fund s yield, which is also used to calculate the Performance Credit. You can choose to have your Performance Credit applied to this account. You can also withdraw money from your Accumulation Account, as long as your policy is not in the grace period (there may be tax implications). 5

About the Death Benefit Your death benefit is the total insurance coverage your policy provides, reduced by any amount you owe us on the date of death. It is the sum of your policy s insurance coverage, plus any Paid-up Insurance, plus any Deposit Option Insurance, plus any Yearly Term Insurance, reduced by any outstanding amount if the policy is in grace and any allocated policy loan amount. When the last insured dies, the death benefit will also include the balance of the Accumulation Account, reduced by any policy loan amount allocated to that account. (Your contract provides a full description of the death benefit.) Policy loans After the first policy year, you can request a cash loan based on the value in your Performax Gold policy (as long as the policy is not in the grace period). The maximum amount you can borrow is 90% of the Total Policy Value, minus any existing policy loans. The policy is the only security for the loan and we may ask you to complete a loan agreement. Note: If the loan is outstanding when the insured dies, we will reduce the death benefit by the amount of the loan allocated to that insured s coverages. If your circumstances change and you need to stop making policy payments for a short period of time, you can take a policy continuation loan (as long you are not on the Payment Offset Plan). If you do this, we will cover your policy payments using a loan against the value of your policy. You will be charged interest on the loan and any death benefit payable will be reduced by the amount of the loan. 6

Making changes to your policy There s no question that your life insurance needs will change throughout your lifetime. One of the best features of Performax Gold is that you can adapt your policy to reflect those changes. You can increase or decrease your benefit amount and even add extra coverage to meet your specific needs. Increasing or decreasing coverage If you want to increase your coverage, you will need to provide evidence of insurability for any insured(s) covered by the increase. Any increase in the amount of insurance is added to the policy as a separate insurance coverage. This new coverage will have its own coverage date and personal information, such as Healthstyle and insurance rating. You can select a new Performance Credit Option for this new insurance coverage. If you want to decrease your coverage, the decrease is subject to our administrative rules regarding minimum decreases and minimum amounts of insurance coverage. Decreases in coverage can also affect the Guaranteed Cash Value. Any Guaranteed Cash Value released as the result of a decrease will be placed in the Accumulation Account. Changing cost duration You also have the option to change the cost duration for your insurance coverage to a longer duration. Keep in mind that changing the cost duration will change your policy costs. Adding a Deposit Option Insurance coverage You can add Deposit Option Insurance coverage to any existing insurance coverage. We require evidence of your continued good health. 7

Customizing Performax Gold There is no one-size-fits-all solution when it comes to meeting everyone s life insurance needs. That s why we encourage you to customize your Performax Gold policy to suit your specific situation. You can do this by adding any of the following riders: Term Insurance Rider (TIR) This rider provides additional temporary insurance coverage. The person insured under the Term Insurance Rider does not need to have permanent coverage on the policy. While this coverage is temporary, it can be converted to a permanent coverage on this policy, or to any other permanent plan we offer, up to age 75 without evidence of insurability. Term riders are available either on a 10-year renewable or 20-year renewable basis and on a single or combined life basis. Early Cash Value Enhancer Rider This rider gives you the option to increase your short term guaranteed cash value. By adding the Early Cash Value Enhancer (ECVE) rider to a new Performax Gold coverage, you can boost your guaranteed cash values in the first 20 years of your coverage without giving up the high long-term guaranteed cash values or death benefit that Performax Gold provides. Total Disability Waiver Rider (TDW) If a person insured under this rider becomes totally disabled for a period of at least six months, we will waive the costs for this policy during the period of disability. If total disability occurs before age 60 and continues for at least six months, all policy costs will be waived for as long as the disability continues. If total disability occurs after age 60, policy costs are waived until age 65. This rider is available to any life insured under the policy or to the payor of the policy. 8

Accidental Death Benefit (ADB) This rider provides an additional benefit in case of accidental death. Guaranteed Insurability Option (GIO) This rider gives you the option to purchase additional insurance coverage on the life insured without evidence of insurability. The new coverage can be added to this policy or it can be a new policy. You can exercise this option at specified option dates as outlined in the policy contract. You can also exercise this option on specific life events including marriage and the birth or adoption of a child. There are two GIO options to choose from: the GIO Regular and the GIO Special. Business Value Protector Rider (BVP) This rider provides the business owner with the option to purchase new insurance, without having to submit evidence of continued good health, based on the increased value of the business. You can buy the new insurance on specified option dates, which are the 1st to 10th policy anniversaries following the BVP coverage date. Child Protection Rider (CPR) Our Child Protection Rider provides $10,000 of life insurance coverage for your child. With this rider, your child also has the option to purchase up to $250,000 of new life insurance coverage at age 25 (or at specified option dates) with no medical evidence. Up to $100,000 of that amount can be for critical illness insurance. To qualify for the critical illness insurance, we just ask a simple question to confirm the insured does not have one of the covered conditions. 9

Other policy features If you re in excellent health, we have good news Performax Gold offers Healthstyles Underwriting which rewards you for your excellent health and lifestyle with lower insurance costs. As part of our Healthstyles program, you can receive a Healthstyles Report (if you re underwritten as standard and take the requested blood tests). This unique, personalized report provides you with the results of some of your medical tests. To make sure the information is meaningful to you, the Report explains what the test measures and how to interpret the results. It also gives you health tips and advice on how to stay healthy longer. Disability Benefit We hope you never require it, but if you become disabled and need some financial assistance, Performax Gold offers a Disability Benefit payment during any 12-month period. We deduct the Disability Benefit payment from the Accumulation Account within your policy and it s tax free. Based on current tax legislation, a payment under a policy as a disability benefit is not a disposition of the policy (September 2007). Total Disability: Inability, due to injury or sickness, to perform the substantial duties of your regular occupation. If not employed, inability due to injury or sickness, to perform the regular substantial activities you were engaged in prior to the onset of injury or sickness. Catastrophic Disability one of the following must be satisfied: Assumed disability: loss of sight, hearing, speech, use of two hands, two feet, or a hand and a foot. Loss of independence: unable to do one Activity of Daily Living. Cognitive loss: requires substantial supervision because of a severe loss of cognitive functioning. Terminal illness life expectancy of less than one year. To qualify, you must provide evidence of total or catastrophic disability within a year of the onset of the disability. 10

When you choose Manulife, you're choosing a strong, reliable and trustworthy company that's been providing forward-thinking financial solutions for Canadians for more than 100 years. You can rest assured that we're here for you today... and for your future.

Performax Gold is sold by, and is a registered trademark of,manulife Financial (The Manufacturers Life Insurance Company).This document is protected by copyright. Reproduction is prohibited without Manulife s written permission. Manulife, Manulife Financial, Manulife Financial For Your Future logo and the block design are service marks and trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates under license. MK2093E 03/2011