Leveraging SharedCare and FamilyCare LTC Insurance Sales Concept of the Month John Hancock Long-Term Care Insurance A New Age in LTC Leveraging SharedCare and FamilyCare For Agent Training Only. Not for Use With the Public. Long-Term Care Insurance is Underwritten by John Hancock Life Insurance Company Boston, MA 02117 LTC-VC3 03/04

SharedCare Introduced in 1994 SharedCare has been a hit with married/partnered couples 20% of John Hancock’s Custom Care sales for 2003 and 14.8% of Essential Care sales for 2003 include the rider Cost is 5%-26% of the base premium, a good value Expanded to 10 year BP with Custom Care II

SharedCare SharedCare 60 Day offer of a 2-year benefit plan for policyholder whose benefits are exhausted by partner Not subject to underwriting, at attained age, prior to age 91 Available to policyholders with no claims in prior two years

SharedCare Allows partners to access the benefits under the other’s policy once their own is exhausted If either partner dies, survivors policy is automatically increased by remainder of deceased policy limit Both partners must have rider and identical benefit options

Market for SharedCare Younger Partners Competing financial demands Unable to afford individual plans that provide adequate coverage Have looked in t LTCI and determined they can not afford it

SharedCare By joining policies, a couple can pool resources Enhance their families overall level of protection Removes “stress” from the sales process by providing more affordable, but adequate options

SharedCare – Case Study* The Roberts - Couple age 55 and 53 Want a comprehensive plan of coverage The average cost in their area is $140/day Also concerned with continuing to save for retirement and pay college expenses for children Have already looked into LTCI and feel they can not afford it. * Hypothetical Example. Rates, options and availability vary by state.

Traditional Option A 2 individual policies $140/day, Lifetime, 90-day EP with 5/5% Compounding Total Premium = $5002 * Hypothetical Example. Rates, options and availability vary by state.

Questions you should ask Is $140 adequate, or should I recommend more? Are premium dollars being allocated correctly? Would they be better of with a different plan…higher daily benefits, lower benefit period? What about SharedCare? * Hypothetical Example. Rates, options and availability vary by state.

SharedCare – New Thinking Option B 2 individual policies with SharedCare rider $200/day, 10-Year, 90-day EP with 5/3% Compounding Total Premium = $4,477 (annual savings of $525 over the Traditional Option A) * Hypothetical Example. Rates, options and availability vary by state.

Annual Premium Savings = $525 What the client gains Day 1 Coverage $200/day vs $140 Combined pool of $1,460,000 Double coverage (up to $400/day) if care needed immediately due to accident Year 20 Coverage $507/day Combined pool of $2,560,000 Annual Premium Savings = $525 * Hypothetical Example. Rates, options and availability vary by state.

SharedCare – New Thinking Option C 2 individual policies with SharedCare rider $220/day, 5-Year, 90-day EP with 5/3% Compounding Total Premium = $4,013 (annual savings of $990 over the Traditional Option A) * Hypothetical Example. Rates, options and availability vary by state.

Annual Premium Savings = $990 What the client gains Day 1 Coverage $220/day vs $140 Combined pool of $803,000 Double coverage (up to $440/day) if care needed immediately due to accident Year 20 Coverage $558/day Combined pool of $1.4M Annual Premium Savings = $990 * Hypothetical Example. Rates, options and availability vary by state.

Option B vs. Option C Option B $200/day 10 year Benefit Period 90 day Elimination Period 5/3% Compounding Total combined pool of $1.46M Premium=$4,477 Option C $220/day 5 year Benefit Period 90 day Elimination Period 5/3% Compounding Total combined pool of $803,000 Premium=$4,013 * Hypothetical Example. Rates, options and availability vary by state.

Ask Yourself Which option is best for my clients? Which plan helps them meet their overall financial goals while providing their family with an adequate level of protection?

Factors Determining Recomendation Personal experience with a long term claim Personal experience with extensive out of pocket due to fluctuations in the cost of care Premium Savings

FamilyCare Benefit Up to four family members can be covered under one LTC insurance policy. This multi-generational policy is available with the Custom Care Policy This benefit gives the insured affordable coverage for themselves, their immediate family and extended family at the same time The FamilyCare Benefit is not available in all states

FamilyCare Benefit Market Partners Highly price sensitive Boomers concerned with Impact o their parents care Mature prospects with concern for the “use it or loose it” aspect Business owners

FamilyCare Benefit Affordable way to pool coverage and protect multiple family members Benefit bequethment feature Helps younger partners get started on LTCI coverage

The Clarks Ages 53 and 50 Getting started on LTC planning and understand the value of LTCI Have heard about the SharedCare option and like the idea of sharing coverage to save money Would rather put their money towards additional retirement savings, so are looking to spend as little as possible, but still have a degree coverage Costs in their area average $120/day * Hypothetical Example. Rates, options and availability vary by state.

Individual Policy, SharedCare & FamilyCare Rate Comparisons One couple: Ages 53 and 50 90 Day Elimination Period, 5% Simple Inflation, $4,500 LTC Monthly Benefit, Standard Rates, Applicable Discounts Individual Policies 2X: Six year individual policies $1,260, $1,102 Total for all policies with discounts: $2,362 * Hypothetical Example. Rates, options and availability vary by state.

Individual Policy, SharedCare & FamilyCare Rate Comparisons One couple: Ages 53 and 50 90 Day Elimination Period, 5% Simple Inflation, $4,500 LTC Monthly Benefit, Standard Rates, Applicable Discounts SharedCare on both Two 3 year individual policies with SharedCare Riders $1,060, $950 Total for all policies with discounts: $2,010 Premiums reduced and unused benefits transferred to surviving partner upon death * Hypothetical Example. Rates, options and availability vary by state.

Individual Policy, SharedCare & FamilyCare Rate Comparisons One couple: Ages 53 and 50 90 Day Elimination Period, 5% Simple Inflation, $6,000 LTC Monthly Benefit, Standard Rates, Applicable Discounts FamilyCare Benefit One policyholder with one additional applicant w/ 5 year benefit Premium: $1,890 Premiums reduced and unused benefits transferred to surviving insured upon death * Hypothetical Example. Rates, options and availability vary by state.

Leveraging SharedCare and FamilyCare LTC Insurance Sales Concept of the Month John Hancock Long-Term Care Insurance A New Age in LTC Leveraging SharedCare and FamilyCare For Agent Training Only. Not for Use With the Public. Long-Term Care Insurance is Underwritten by John Hancock Life Insurance Company Boston, MA 02117