Manulife Segregated Fund Education Savings Plan Hello and welcome to this session about the Manulife Segregated Fund RESP

Manulife Segregated Fund RESP An investment option to help your clients prepare for their children’s post-secondary education and achieve their financial goals No additional licensing will be required if already life licensed A new means of appealing to a broader market, including younger clients Manulife Segregated Fund RESP is an investment option to help your clients prepare for their children’s post-secondary education and achieve their financial goals No additional licensing will be required – if you are contracted to sell life insurance, you can now enter the segregated fund RESP market and It is a new means of appealing to a broader market, including younger clients, that can provide you with ongoing opportunities to grow your total book of business

Learning objectives By the end of this module you will: Understand what an RESP is as well as the associated benefits Comprehend the market opportunity for RESP’s Learn about the Manulife Segregated Fund RESP Know where to find new materials, administration and additional resources

Registered Education Savings Plan (RESP) Now let’s look at the features and benefits of RESPs

What is an RESP? An RESP is a specific type of plan designed to help save for a child’s post-secondary education It is registered with the Canada Revenue Agency (CRA) Government grants and incentives may be available to qualifying beneficiaries making RESPs an attractive education savings vehicle An RESP is a great way to begin to save for a child’s post-secondary education. It is a specific type of savings vehicle that allows parents, relatives and friends to contribute. RESP’s are registered with the Canada Revenue Agency Because government grant and incentives are available, RESP’s are an attractive education savings vehicle.

What are the unique benefits of RESPs? Allows savings to grow on a tax deferred basis as long as savings remain in the plan Government provides incentive in the form of the Basic Canada Education Savings Grant (CESG) 20% annually, up to age 17, on the first $2,500 contributed; up to a lifetime maximum of $7,200 per beneficiary CESG contribution room is carried forward (up to $1,000 per year) Additional CESG: 20% on the first $500 per year if family income of primary caregiver is less than $43,516 annually 10% on the first $500 per year if family income of primary caregiver is greater than $43,516 and less than $87,123 annually There are some unique benefits of RESPs that you should be aware of: The structure of an RESP allows savings to grow tax deferred. Contributions are not tax deductible, but any growth within the plan is not taxable until withdrawn. Also, one of the greatest benefits of an RESP is the government assistance they can provide. A Canada Education Saving Grant, or CESG, is available on the first $2,500 contributed every year, up to December 31st of the year the child turns age 17, and up to a lifetime maximum of $7,200. The maximum CESG per year is 20%, or $500. An additional CESG is available where the annual income of the child's family or primary caregiver is below $87,123 as shown on the slide.

Other government grants and incentives Low income families may also qualify for the Canada Learning Bond (CLB) $500 initially provided, then $100 annually up to $2,000 lifetime max Provincial grants and incentives may also be available In addition to the CESG, a Canada Learning Bond (CLB) may be available for low income families. The CLB provides $500 initially and then $100 annually up to a $2000 lifetime maximum and Provincial grants and incentives are also available in some cases.

Additional details about RESPs No annual maximum contribution; lifetime maximum per student beneficiary = $50,000 The plan must be fully terminated no later than 35 years after the RESP inception date (or by the 40th year for a Specified Plan) There are a few other details about RESPs that you should know: There is no annual deposit maximum per beneficiary, but there is a lifetime maximum of $50,000 and The RESP must be fully terminated by the end of 35 years (or 40 years for a Specified Plan)

Structure of an RESP Subscriber Student(s) Promoter (person who opens up the plan and contributes) Student(s) (the Beneficiary) Promoter (Company offering the product) There are 3 parties involved when setting up an RESP: First, there is the subscriber, who typically opens up the plan and makes the contributions to the RESP. This is often the parent or grandparent. Next, there is the beneficiary, or beneficiaries in the case of a family plan. They are named by the Subscriber to receive Educational Assistance payments from the plan and will ultimately be the ones receiving the funds to be used for their post-secondary education. They must be a resident of Canada and less than 21 years of age. A Social Insurance Number must be provided in order to obtain a Canadian Education Savings Grant. The third party is the promoter, or the company offering the product (such as Manulife Financial).

Types of withdrawals for educational purposes Made up of grant(s) and any accumulated earnings on the plan Taxable to the Beneficiary EAP Educational Assistance Payment Withdrawals for post-secondary education purposes PSE Post-secondary education contribution withdrawal Withdrawals of contributions No taxable implications When making a withdrawal from an RESP for education purposes, there are 2 types of withdrawals: The first is an Educational Assistance Payment, or EAP, which generally includes a combination of grant money received, and any of the RESP's accumulated investment earnings. These are taxable to the student beneficiary in the year of the withdrawal. The second is a Post Secondary Education Payment, or PSE, which are the withdrawals of your own contributions. There are no taxable implications on this type of withdrawal. The Beneficiary or student, must be enrolled in a qualified educational institution in order to receive EAP. Qualified educational institutions are approved by Employment and Social Development Canada. Beneficiary must be enrolled in a qualifying post-secondary education program

Withdrawals for non-educational purposes Grants and incentives may need to be returned to the government Refund of contributions to Subscriber permitted No tax implications RESP Withdrawal of the contributions by the subscriber is permitted, with no tax implications. However, the Grants associated with those contributions may need to be returned to the government.

Market opportunity Now let’s look at the market opportunity for RESPS

What is the opportunity for a Segregated Fund RESP? Tuition fees for post-secondary education continue to climb, placing increased importance on educational saving vehicles and programs Average four-year program costs $66,0001 Over the next 15 years that number is expected to reach $117,0001 Segregated Fund RESP options are uncommon in Canada (currently only 3% of total market2) Manulife strives to meet the investment needs of all Canadians by offering a broad product suite The reality is that tuition fees for post secondary education continue to rise and the average 4 year program now costs about $66,000, including tuition, accommodations, transportation and student fees. This number is expected to increase even more. Estimates suggest that in 15 years, that number will reach $117,000. Segregated Fund RESP options are uncommon in Canada, currently only representing about 3% of total market share. Manulife strives to meet the investment needs of Canadians by offering a broad product suite, so the addition of a RESP continues to add to our to the breadth of our product shelf. O’Hara, Claire. Investment Executive, July 11, 2012. Grappling with the growing cost of education. HRSDC - Canada Education Savings Program – Annual Statistical Review 2011 (Page 8)

Annual contributions 7.1% average annual increase Billions As mentioned, and as I’m sure you’re aware, tuition fees for post-secondary education are increasing. This means that the market for RESPs is really growing as well. As you can see in this graph, annual contributions have been rising consistently since 1998, at an average annual increase of about 7%. Deposits into RESPs in 2011 were well over $3 Billion. Average annual contributions per account in 2011 were approximately $1,400. This presents a distinct opportunity for you as an excellent compliment to our other product offerings. Source: ESDC. Canada Education Savings Program – Annual Statistical Review 2011 (Page 10)

Profile of RESP investors in Canada Average age = 45 years Average investable assets = $223,675 Average household income = $101,051 English speakers slightly more likely than French speakers to have RESP More likely to be married/common-law More likely to have children under 18 years of age living in household (1 child - 38%; 2 children - 40%; 3 children- 51%; 4 children - 21%) Some details about the demographics of the average RESP investor are listed here. Average age is 45 years Average investable assets are $223,675 Average household income is $101,051 English speakers are slightly more likely than French speakers to have an RESP (18% vs. 14%) More likely to be married/common-law (18%) and More likely to have children under 18 years of age living in household (1 child - 38%; 2 children - 40%; 3 children- 51%; 4 children - 21%) Source: Manulife Brand Tracking survey conducted between Nov 29 - Dec 7, 2012 by Environics Research. Respondents were 2,001 Canadians aged 25 years and older, with $50k in household income, and primary or shared financial decision-making responsibility in their household

Manulife Segregated Fund RESP details Now let’s look at the specific features of the new Manulife Segregated fund RESP product

Manulife Segregated Fund RESP – Product features Selection of 8 segregated funds invested in underlying Manulife Mutual Funds 75% Death Benefit Guarantee* 75% Maturity Guarantee* Contract Maturity Date is Dec 31st of the 35th year (40th year for a Specified Plan) after the RESP Inception Date Individual or Family Plan Client name only Life license is the only requirement to sell the product It will offer a selection of 8 segregated funds invested in underlying Manulife Mutual Funds It will have a 75% Death Benefit and 75% Maturity Guarantee The maturity date will be 35 years after the RESP inception date These plans can be set up as individual or family plans This product will only be offered in Client name at launch, nominee name is not available And only a life insurance license is required for advisors to offer the product *Reduced proportionally by withdrawals

Contract & deposit minimums and maximums No deposit is required if applying for the Canada Learning Bond and Fund minimum = $100 per fund, per sales charge option Pre-authorized Credit (PAC) deposit minimum = $25/month, per fund Latest age to deposit: Age 75 of the Subscriber and 31st year after RESP Inception Date (35th year for a Specified Plan) and before the Student Beneficiary's 31st birthday for a Family Plan* No minimum deposit is required if one is applying for the Canada Learning Bond. The fund minimum is $100, but a PAC can be set up with a minimum of $25 per month. The latest age to deposit is age 75 of the subscriber or the 31st year after inception of the plan and before the Student Beneficiary's 31st birthday (or 35th year for a Specified Plan) for a Family Plan. * or latest age to own under the Income Tax Act (Canada)

Investment options Fund Name Fund MER Manulife High Interest Savings Seg RESP 0% Manulife Short-Term Bond Seg RESP 1.98% Manulife Corporate Bond Seg RESP 2.23% Manulife Strategic Income Seg RESP 2.26% Manulife Monthly High Income Seg RESP 2.66% Manulife Strategic Balanced Yield Seg RESP 2.76% Manulife Dividend Income Seg RESP 2.85% Manulife U.S. Monthly High Income Seg RESP 2.64% There will be 8 investment options available. All will be underlying Manulife Mutual funds as listed on this slide. Further details will also be available in the Product and Funds at a glance and the Fund Facts.

Commission, Sales Charge Options, DSC scale Up-front commission Trailers DSC scale Back-end Money Market = 1% Money Market (MM) = 0.15% 7 yrs Fixed Income = 2.50% Fixed Income = 0.25% All Others = 5% All Others = 0.50% Low-load MM = 0.50% MM = 0.15% (0.25% after 3 yrs) 3 yrs Fixed Income = 1% Fixed Income = 0.25% (0.50% after 3 yrs) All Others = 2% All Others = 0.50% (1% after 3 yrs) Front-end 0 - 5% MM = 0.25% n/a Fixed Income = 0.50% All Others = 1% This slide shows the commission rates, sales charge options and DSC scale Essentially, these details are identical to our InvestmentPlus product We will be offering back-end, low-load and front-end options Up-front back-end commission is 5% for most funds, 2.5% for fixed income funds and 1% for the money market fund

A note on Creditor Protection and Probate Creditor protection is not available for any RESP segregated fund contracts in Canada Options to bypass the estate are available to all RESPs We also want to draw your attention to creditor protection for this product since it is typically available for segregated fund contracts. That is not the case with RESPs as creditor protection that is available under provincial insurance legislation doesn't appear to be available. The reason is because the Income Tax Act requires that the RESP Trust be the contract beneficiary. The trust doesn't qualify as a family class beneficiary as required for creditor protection under the provincial insurance legislation There are some potential arguments in favour; however, they are untested in the courts and there are equally valid arguments against. Options to bypass the estate are available in all RESP products, so while this is available for this product, it is not unique to Segregated Fund RESPs.

Materials, administration & resources Now let’s look at the new materials as well as some administrative highlights and additional resources

Point of Sale (POS) materials and administration New POS materials and forms: Information Folder and Contract, Terms and Conditions and Fund Facts Application Form RESP Withdrawal forms and other supplemental forms (Non-financial change, RESP TIK form) ESDC incentive application forms for CESG grant and CLB New contracts can be set-up through Online Transactions, FundSERV or to Manulife Head Office Transfer fee reimbursement program is available from Manulife Seg/GICs There will be new Point of Sale materials for the product, including an Information Folder, Contract, Terms and Conditions, and Fund Facts, Application Form, Withdrawal forms and other supplemental forms. Applications are also required for the CESG and ACES. These can be completed through Online Transactions, or paper versions can be found on the ESDC website. Electronic processing will be available through Online Transactions (only new plan set-ups at launch) and FundSERV We will also be offering transfer fee reimbursement from Manulife Seg Fund products and GICs. An administrative module is also available on the CE centre that provides more details on processing your business

New marketing materials The new marketing materials are available on Repsource and for ordering. They include: Advisor guide Product and Funds at a glance Client brochure Prospecting letter We will also be producing a Marketing Kit that will contain all of these pieces There will also be a new sales concept

Additional resources Your Manulife Investments Sales teams Repsource Manulife.ca Canada Revenue Agency website -> www.cra.gc.ca Government of Canada website -> www.canlearn.ca Employment and Social Development Canada (ESDC) website -> www.esdc.gc.ca This slide provides links to some additional resources Repsource and Manulife.ca will have pages for the new product as of April 29th Other excellent resources include the government sites shown on this slide

Best in class product suite In closing, our product suite is now more comprehensive than ever with the addition of the Segregated Fund RESP, with a solution to meet your clients investment needs throughout their lifetime. Thank you. GIC refers to Guaranteed Interest Contract.

Important information FOR ADVISOR USE ONLY The information provided in this presentation is for advisor use only and is not intended for the general public. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value. The Manufacturers Life Insurance Company is the issuer of the Manulife Segregated Fund Education Savings Plan insurance contract, Manulife Investments Guaranteed Interest Contract, all Manulife Investments Annuities, Manulife GIF Select insurance contract which offers the InvestmentPlus, IncomePlus and EstatePlus Series and the Manulife PensionBuilder insurance contract and the guarantor of any guarantee provisions therein.   Manulife, Manulife Investments, the Manulife Investments For Your Future logo, the Block Design, the Four Cube Design, Strong Reliable Trustworthy Forward-thinking, Manulife Principal Protected Annuity, InvestmentPlus, IncomePlus, EstatePlus and Manulife PensionBuilder are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under licence.

Thank you