Manulife PAR – What we know

PRODUCT OVERVIEW What we know (or don’t know) from Manulife’s Par Live Webcast – June 13, 2018 Key product features Manulife – new par, eff. June 23, 2018 Comments / Questions Product name Manulife Par Coverage types Single life Joint last-to-die (JLTD), premiums to last death We offer more options (JFTD and JLTD premiums to first) Multiple coverage options? No – “only one coverage per policy” Premium payment periods Pay for 20 years Pay for 10 years Lifetime payment option not offered Issue limits Minimum amount of insurance: $100,000 Maximum amount of insurance: ? Dividend Options Paid-up insurance (PUI) Cash No enhancement/ECO type div option available Term riders will be available Premium Offset Yes Dividend Interest Rate (DIR) From June 23, 2018 until Sept. 1, 2019, the DIR for Manulife Par will be 6.25% Each year, the DIR is announced in July – effective Sept. 1 to Aug. 31 This matches Sun Life’s current DSIR. Our DSIRs eff. July 1, 2018: CL: 5.5%, GWL: 5.6%, LL: 5.0%

PRODUCT OVERVIEW Key product features Manulife – new par, eff. June 23, 2018 Comments / Questions Dividend Interest Rate (DIR) From June 23, 2018 until Sept. 1, 2019, the DIR for Manulife Par will be 6.25% Each year, the DIR is announced in July – effective Sept. 1 to Aug. 31 6.25% matches Sun Life’s current DSIR. Our DSIRs eff. July 1, 2018: CL: 5.5%, GWL: 5.6%, LL: 5.0% This is just for new policies! Sales are added to the existing open PAR account. Why two DSIR’s in one PAR Account? According to Steve Krupicz: “The 6.25% is a forward looking rate, since these are new policies. If we (Manu) is right in our assumptions that interest rates will rise, we expect to keep the 6.25% rate and increase the rates for Pgold and other PAR blocks. If we’re wrong, the 6.25% will likely decrease, but the rates for Pgold and other PAR blocks will remain the same. Additional Deposits Yes, Deposit Option payments: Pre-approved lifetime deposit option limit by default Available on New Business and Term conversions (no additional underwriting on term conversions) No expiry date “No extra underwriting required” for ADO and has very generous deferral and start and stop privileges and allowed without underwriting on term conversions ADO compensation is 5%. Their load on ADO is 7% More info on following slides Additional details on Deposit Option Will have a lifetime (and annual) deposit option limit No extra underwriting required Even if no deposit option payments were illustrated or request on the application The lifetime deposit option limit does not expire Years can be skipped without having to keep count First deposit option payment can be made whenever (year 10, 20, 30…it doesn’t matter!) Deposit option payments can be made after the end of the premium duration. Term conversions also get a default lifetime deposit option limit that doesn’t require any underwriting. Every year, the maximum Deposit Option payment allowed is determined by the lesser of: Previous year’s payment + $100K Available MTAR room for the year Remaining lifetime deposit option limit Once the lifetime limit is reached, new underwriting information is required to obtain a new limit and continue making deposit option payments.

PRODUCT OVERVIEW Key product features Manulife – new par, eff. June 23, 2018 Comments / Questions Rating reduction Program No official program mentioned Ratings applied to only a portion of the base premium Paid-up insurance (PUI) and Deposit option insurance aren’t rated Q: PUI and Deposit Option (ADO) “not rated”: Does this mean they are not available to rated clients, or does it mean that all clients pay the same price for the PUA regardless of rating? Underwriting classes Non-smoker Smoker Juveniles will be issued with Non-Smoker rates Manulife offered preferred risk u/w (“Healthstyles”) on its non-par PGold (for coverage amounts of $100K and up) Q: Pref available on Term riders? Issue ages 0-80 Single Life 25 – 90 Joint (joint age between 16 and 80 Riders Term 10 (with YRT renewal rate structure) Term 20 Child protection Guaranteed insurability Total disability waiver (insured and payor) Similar riders to what Manu offers on PGold, except the T10 (since the YRT renewal structure is fairly new) Other features Disability benefit Withdrawals and policy loans (cash and policy continuation) Cash Values and Death Benefit “Attractive cash values” “Competitive Death Benefit compared to estate value products” Guaranteed cash value begins at year 1 Manu’s sample comparison provided is versus other guaranteed 20-pay products Shown on following slides

Manulife’s CSV comparison

Manulife’s DB comparison

PRODUCT OVERVIEW Competitive advisor compensation: Manulife Par commission rates: Premium duration First year Year 2 3 Years 4 – 10 11 – 20 21+ Pay for 10 years 35% 10% 2% N/A Pay for 20 years 50% Deposit Option payment commission rate: 5% FYC rates match Sun Life’s 10-pay and 20-pay options; however, Sun’s Year 2 & Year 3 rates are only 5%, to Manu’s 10%. Also, Sun pays 4% comp on ADO

Observations from illustrations we’ve seen Summary: Manulife offers higher guaranteed values, but the client has to pay a significant extra basic premium to get them.  Long-term, the extra guaranteed CSV isn’t worth the extra cost.  The higher guaranteed CSVs translate into higher total CSVs.  GWLifeCo products are more front-end skewed with respect to illustrated dividend CSV and total death benefit. Manulife’s basic premium is higher than ours Manulife illustrates higher total CSVs than any of the GWLifeCo products at all durations Largely a result of higher guaranteed CSVs, which offset whatever additional CSV is provided by the extra ADO deposits from the GWLifeCo products Only the cases involving a higher basic coverage amount do we have durations at which guaranteed CSVs are better than Manu – and these are at the longer durations Guaranteed CSVs from Manulife are higher. After year 20, this is completely a result of the higher basic premiums paid by the policyowner i.e. after year 15-20, the extra guaranteed CSV being provided by Manulife is more than offset by the additional cumulative basic premium paid. Long term, the higher guaranteed CSVs are a result of the higher basic premiums being paid by the Manulife policyowner Dividend CSVs are illustrating better for the GWLifeCo products in the first 15 years GWLifeCo products may have less offset sensitivity to dividend scale changes because their products have built up more dividend CSV by the time offset would be attempted. Long-term illustrated dividends also play a role as well Total death benefits are better for the GWLifeCo products for the early policy durations (years prior to durations 15-20) LL’s Wealth Generator 20 Pay is the product that comes the closest to matching Manulife early-duration guaranteed CSVs. It’s the only GWLifeCo product to offer higher early-duration total CSVs under any of the illustrated dividend scales than Manulife’s product If we expect the policyowner will be focused on early values for this product, the GWLifeCo products are competitive for the early duration dividend CSVs and death benefits.  The higher guaranteed CSVs, funded by the higher basic premiums, result in the total CSVs being higher for Manulife in the early durations when compared to Canada Life and GWL Based on current Manulife DIR and Lifeco’s 2017 dividend scale

Additional comparisons that we’ve seen 10 Pay JLTD M46 F49 $1M DB

Additional comparisons that we’ve seen 10 Pay JLTD M48 F47 $10M DB

Additional comparisons that we’ve seen 20 Pay JLTD M48 F47 $10M DB