1. Performance LTC Long-term care insurance with a difference
Good morning/afternoon. My name is __________, from John Hancock insurance.
Today’s presentation will review our exciting new long-term care insurance policy, Performance LTC.
Long-term care insurance is underwritten by John Hancock Life Insurance Company (U.S.A.), Boston, MA (not licensed in New York) and in New York by John Hancock Life & Health Insurance, Boston, MA 02117
LTC /15
MLI

2. Agenda Industry Overview Introduction to Performance LTC
Competitive Pricing
Why John Hancock
Closing Thoughts
During today’s presentation we will cover the following.
Review agenda. Read bullet points.

3. Industry Overview
Higher premiums on long-term care (LTC) insurance reflect the new environmental paradigm
Fixed inflation options, such as 3% and 5% Compound, are offered at significantly higher premiums that have been rising rapidly with the continued low interest rate environment
Carriers are forced to adapt by
Updating pricing
Exiting the market
Developing innovative new inflation choices
Missing factor is claims experience (risk)
Significant impact on inforce rate increases
The long term care industry has faced many challenges over its short lifetime.
Not only have we been experiencing all time historic low interest rates, but this has been the case for a prolonged period of time resulting in higher new business rates among many of the top carriers.
Fixed inflation options, particularly 3% and 5% compound inflation, are the most impacted and we have seen significant premium increases to these inflation options.
Carriers have been and continue to be forced to either quickly adapt with new pricing, exit the market, or develop new inflation alternatives that can meet consumer’s needs for a lower priced product while also providing meaningful coverage.
The factor that continues to create challenges for carriers is the difficulty to predict claims experience. We have see the impact of this resulting in significant inforce rate increases across our industry.

4. Performance LTC Long-Term Care Insurance with a Difference
Breakthrough design
Benefits of traditional policy
More predictable premiums1/Less volatile
Lowest initial premiums1 for 3% Compound Inflation in the industry
As an industry leader, John Hancock is committed to creating innovative policy designs that help address these issues.
Performance LTC is a breakthrough design in LTC insurance that provides policyholders with the benefits of a traditional policy, but with a significantly more predictable premiums and less volatile experience.
It also offers the lowest initial premiums for 3% Compound Inflation coverage in the industry.
Policy premiums for Performance LTC will increase annually, through age 90, with the possibility of being partially or fully offset by Flex Credits

5. Long-Term Care Insurance The Old Way
Illustrate level premiums for life
Rates based on current and future assumptions
Adjust rates in the future based on actual experience
Rate increases can be high
Insured would be older
Income may be fixed
Policies not designed to automatically respond to actual experience
LTC the “Old” Way:
Illustrate level premiums for life with premium rates based on current and future assumptions.
But in reality policyholders have no sense of how actual experience is unfolding and how it will affect them, until they get a letter that their premiums are going up
These rate increases can be large, and they can happen at a bad time – when the insured is older, on a fixed income, and closer to needing care
Think about how many in-force rate increases have taken place in the market over these past few years. These rate increases were bigger than they needed to be due to the “Old Way” of designing long-term care insurance policies. If the PLTC design had been available back then, there still may have been inforce increases, due to claims experience being worse than expected, but they may not have been as significant.

6. Performance LTC The New Way
Premiums vary based on actual company experience
Less premium volatility over the long term
More manageable policy
Avoids unexpected “big jumps” in premiums
The “New” Way – Performance LTC:
Premiums are intended to vary slightly from year to year based on the insured’s age and actual company experience reflected through potential Flex Credits.
This year-to-year variability results in less volatility over the long term and ultimately a more manageable policy
Avoids the ‘big jump’ in premiums that has become common with older products throughout the industry
Instead: Performance LTC will offer a fair value in any market condition

7. Performance LTC Client Value
Affordability of the lowest initial premiums for 3% compound inflation
Flexibility to adjust premiums & benefits over time
Transparency in how insurance and investment results are reflected in policy performance and how they are expected to change in the future
This new design provides customers value
The policy offers Affordability with the lowest initial premiums on the market for a 3% compound inflation. Premiums would vary but under current assumptions the “average” net premium over time will actually be lower than the initial premium. Current assumptions are that the declared rate is 6% each year and that our Claims experience is 10% worse than expected.
Performance LTC offers Flexibility to adjust premiums and benefits over time, helping to ensure that the policy continues to suit the individual needs of the client.
It also offers Transparency in how both insurance and investment experience are reflected in the policy performance. This transparency will also be communicated in annual in-force illustrations that should provide the policyholder with an idea of what to expect in the future as experience unfolds over time

8. Performance LTC Product Highlights
Traditional LTC benefits at a great price
Features 3% compound inflation
Improved product design
Built to deal with uncertainty
Reduces risk of “rate shock” in future years
Modest annual premium increases
Transparency
Performance LTC Insurance offers a traditional 3% Compound Inflation at a great price.
Its improved product design is built to deal with the uncertainty of actual experience, reducing the risk of “rate shock” in future years.
Instead the policy adjusts to actual experience each year, which results in modest annual premium increases that may be offset by Flex Credits.

9. Performance LTC Product Highlights
New Flex Account Benefit, which can be used to:
Reduce premiums
Pay for services that allow you to stay at home
Reimburse LTC expenses during the Elimination Period
Reimburse LTC expenses in excess of the LTC benefit amount
Provide a refund of premium upon death or lapse, capped at total premiums paid
New tools for managing policies
The New Flex Account Benefit , a key differentiator, grows gradually over time and can be used in a variety of ways .
Client can option to use there Flex Account to reduce their premiums, pay for LTC services that allow you to receive care at home (Stay at Home Benefits), offset expenses during the Elimination Period and to increase their benefits in later years.
The Flex Account can also provide a refund upon death or lapse up to the total premiums paid. All of these options give your client more control over their policy.
John Hancock is also introducing new tools to help you and your client manage their policies on an ongoing basis.

10. Competitive Position 3% Compound Inflation
MARRIED COUPLE, COMBINED PREMIUM, 55 YEAR OLDS
COMPANY
PREMIUM
% DIFF
Performance LTC (Initial)
$2,706 -
Mutual of Omaha
$3,301
+22%
Genworth
$3,325
+23%
New York Life
$4,295
+59%
Northwestern Mutual
$4,411
+63%
So how competitive is the initial premium for Performance LTC?
For a married couple, age 55, buying a $4,500 Monthly Benefit with a 90-Day Elimination Period, the combined premium for Performance LTC is anywhere from 22-63% less than the leading LTC companies in 2014 sales.
Combined, Select or Standard premiums, Age 55, $4,500 Monthly Benefit, 3 Year Benefit Period, 90-day Elimination Period
Competitive information is current and accurate to the best of our knowledge as of February, The data shown is taken from various company proposals. Policy premiums for Performance LTC will increase annually, through age 90, with the possibility of being partially or fully reduced by future Flex Credit allocations to the Policy. Performance LTC policy premiums and Flex Credits are not guaranteed

11. Competitive Position 3% Compound Inflation
MARRIED COUPLE, COMBINED PREMIUM, 65 YEAR OLDS
COMPANY
PREMIUM
% DIFF
Performance LTC (Initial)
$4,330 -
Mutual of Omaha
$4,762
+10%
Genworth
$5,062
+17%
Northwestern Mutual
$5,914
+37%
New York Life
$5,991
+38%
When you look at the same companies for an issue age of 65, the first year premium savings is still significant ranging from 10 to 38%.
Combined, Select or Standard premiums, Age 65, $4,500 Monthly Benefit, 3 Year Benefit Period, 90-day Elimination Period
Competitive information is current and accurate to the best of our knowledge as of February, The data shown is taken from various company proposals. Policy premiums for Performance LTC will increase annually, through age 90, with the possibility of being partially or fully reduced by future Flex Credit allocations to the Policy. Performance LTC policy premiums and Flex Credits are not guaranteed

12. Performance LTC Flex Credits2
Policy Premium: The contractual premium for PLTC. Based on very conservative insurance and investment assumptions; may be offset by Flex Credits2
Flex Credits2: The results of a guaranteed method of passing back insurance and investment performance to the policy. Not a dividend
Net Premium: The amount of money one pays for Performance LTC out of pocket
Net Premiums = Policy Premium – Flex Credit
With Performance LTC it’s important to understand the difference between Policy Premium, Flex Credits and Net Premium.
Policy Premium is the contractual premium for Performance LTC and is based on a very conservative insurance (LTC claims experience of 65% worse than expected) and investment assumption (only earning the threshold rate resulting in no investment return).
Flex Credits, are the result of the guaranteed method for passing back insurance and investment performance to the policy and is set to default to use 100% of the credit to reduce premiums.
The Net Premium therefore is the amount of money the client pays out of pocket for Performance LTC.
Let’s look at a scenario where 100% of Flex Credits are applied to reduce premiums.
Flex Credits are not guaranteed

13. Premiums Over Time 100% of Flex Credits to Pay Premiums
Policy Premium – Flex Credit = Net Premium
AGE
POLICY PREMIUM 55
$1,104 56
$1,133 57
$1,163 58
$1,196 59
$1,231 60
$1,268 65
$1,497 70
$1,839 75
$2,373 80
$3,249 85
$4,721 90
$7,105 95
100 -
FLEX CREDIT $0 $1 $2
$38
$76
$118
$358
$710
$1,257
$2,190
$4,257
$8,207
$13,704
$20,569
NET PREMIUM
FLEX ACCOUNT
$1,104 $0
$1,132
$1,161
$1,158
$1,155
$1,150
$1,139
$1,129
$1,116
$1,059
$464
$2,401
$27,789
$95,528 =
While we can see the initial premium is less, you can see that based on the very conservative assumption, the Policy Premium will increase over time along with the inflation increase.
In this example, we are assuming that 100% of the Flex Credits are being applied to reduce the premiums. We are also assuming a declared rate of 6% each year for the life of the policy and that our LTC Claims experience is 10% worse than expected each year. These are comparable assumptions to the illustrated premiums that are shown in competitors products.
The net premium does go up slightly in the first few years, peaking by $57 dollars or approximately 5% in the third year.
But, once you move into year 4, you can see that the net premium actually starts to reduce and by age 80, the net premium is less than the initial premium.
By age 90 the net premium is $0 so the Flex Credits that are not needed to pay premiums accumulate with interest in the Flex Account.
Married, Standard, Male, Age 55, $4,500 Monthly Benefit, 3 Year BP, 90 Day EP, 6% Declared Rate, Claims 10% Above Expected
This example is not intended to predict actual performance. Amounts set forth in this example are not guaranteed.
The projection of benefits is hypothetical and for illustration purposes only

14. Premiums Over Time vs. Genworth Apply 100% of Flex Credits to Premium
Total Genworth Net age 80 = $86,450
Genworth
Performance LTC
Peak = ~5% from initial
Current Basis
Total Performance LTC Net age 80 =$72,507
Here is how premiums in this scenario compare to the current Genworth pricing over time.
You’ll notice that the Performance LTC premium starts lower and remains that way for the life of the policy in this example. Keep in mind that both policies would have the exact same 3% Compound Benefit Amount and Total Pool of Money.
If you look at the total premiums paid at age 80, the net premiums paid for Performance LTC would be $72,507 assuming a 6% declared rate and a 10% worse Claims result.
The net premiums paid for the Genworth policy at age 80 would be $88,450, a little more than $12,000 at this point with the difference getting larger each year if similar assumptions are achieved.
Married, Standard, Combined Premium, Ages 55, $4,500 Month, 3 Year BP, 90 Day EP, 6% Declared Rate, Claims 10% Above Expected
Competitive information is current and accurate to the best of our knowledge as of February, The data shown is taken from various company proposals. Policy premiums for Performance LTC will increase annually, through age 90, with the possibility of being partially or fully reduced by future Flex Credit allocations to the Policy. Performance LTC policy premiums and Flex Credits are not guaranteed

15. Premiums Over Time vs. Genworth Apply 50% of Flex Credits to Premium
AGE
FLEX ACCOUNT 60
$323 65
$2,196 70
$6,782 75
$16,084 80
$28,629 85
$27,591 90
$42,986 95
$120,263
100
$305,410
Total Genworth Net Premiums at age 80 = $86,450
Total Performance LTC Net Premiums at age 80 =$90,024
Perhaps your client would prefer to have some of their Flex Credits accumulating in their Flex Account. Let’s take a look at how premiums change over time when 50% of Flex Credits are allocated towards premiums and 50% are left to accumulate in the Flex Account with interest.
In this scenario, net premiums will go up to a point where they exceed the Genworth premium; however the client has also accumulated over $28,000 in their Flex Account by age 80, money they can use for all the other options we discussed earlier.
Net premiums paid at age 80 for Performance LTC = $90,024 (with a Flex Account balance of $28,000 +).
Net premiums paid at age 80 for Genworth = $86,450.
Married, Standard, Combined Premium, Age 55, $4,500 Month, 3 Year BP, 90 Day EP, 6% Declared Rate, Claims 10% Above Expected, Flex Credit Deferral to Age 80 and then Flex Account used to pay all future Net Premiums
Competitive information is current and accurate to the best of our knowledge as of February, The data shown is taken from various company proposals. Policy premiums for Performance LTC will increase annually, through age 90, with the possibility of being partially or fully reduced by future Flex Credit allocations to the Policy. Performance LTC policy premiums and Flex Credits are not guaranteed

16. More on Flex Credits Flex Credit = Interest Credit + Insurance Credit
Guaranteed method to pass back experience
Interest Credit
Calculated using declared rate (currently 6%)
Guaranteed to never be less than portfolio rate less 0.5%
Minimum rate is 1%
The Threshold Rate (or hurdle rate) is 1-3% (varies by issue age)
Insurance Credit
A policyholder’s portion of the total gain/loss from claims experience
All experience – upside and downside – is guaranteed to be passed back to policyholders (instead of just downside for traditional LTC)
So how are Flex Credits calculated?
Flex Credits are a combination of an Interest Credit and an Insurance Credit. The important part to remember is that John Hancock is guaranteed to pass back experience to the policyholder.
The Interest Credit is calculated based on a declared rate (currently 6%). The declared rate is guaranteed to never be less than the portfolio rate less 0.5%. And there is a hurdle rate or Threshold rate of 1-3% depending on issue age. The younger the issue age, the lower the Threshold rate that we have to reach for the policy to earn a positive interest credit. The Threshold rate is locked in at issue.
The Insurance Credit is the policyholders portion of the total gain or loss resulting from claims experience. All experience is guaranteed to be passed back to the policyholder instead of just the downside for traditional LTC policy designs historically passed back in the form of inforce rate increases. There has never been a policy before Performance LTC that returns positive Claims experience back to the policyholder in the form of a credit.

17. Policy Management Tools
In-force Illustrations
Provided with annual statement, gives indication of future expected Flex Credits and the resulting Net Premium
Flex Credit Deferrals
Defer 25%, 50%, 75% or 100% of Flex Credits (any time) for use in the future
Reduce Premium Increases
Option to decline discontinue the 3% Compound Inflation and reduce automatic future premium increases.
Benefit Reduction
Option to reduce the benefits thereby lowering premiums
To help you and your clients manage their Performance LTC policies, John Hancock has created several tools.
Inforce LTC illustrations will be provided with an annual statement and will have a hypothetical projection of future Flex Credits and new net premiums.
Clients can adjust their flex credit deferrals on an annual basis deferring 25%, 50%, 75% or 100% of Flex Credits to their Flex account with the remainder being automatically applied to reduce premiums.
Clients can lower their automatic premiums increases by dropping the 3% Compound Inflation at any time. Benefits and planned premiums will remain level from that point but Flex Credits will continue to be earned and applied to lower the net premiums due. Benefit increases will automatically begin again at age 91 with no corresponding increase in premium.
Benefits may also be reduced on an annual basis as another way of lowering future premiums. Performance LTC is designed to allow your client to have more control and flexibility with regards to their policy than ever before.

18. The Signature Page
Due to the nature of this new policy design, you and your client will be required to sign off on the LTC illustration.
Illustrations are based on assumptions and are not guaranteed so we need signoff that both you and your client are aware that future results will be dependent upon actual returns.
If during the underwriting process anything changes that would impact the premium, a new updated illustration would need to be signed and submitted.

19. Traditional Benefits3 Built-In Benefits Benefit Amount
Additional Accident
ROP prior to age 65
Care Support Services
Care Advisory Services
Bed Hold
International
Hospice
Benefit Eligibility
Optional Benefits
SharedCare
Waiver of HHC EP
Nonforfeiture
DRA Partnership
Benefit Amount
$50 - $400 daily
$1,500 - $12,000 monthly
Benefit Periods
2, 3, 4, 5, 6 years
Elimination Periods
30, 60, 90, 180, 365 service days
5% Compound Inflation
Ratings & Discounts
Payment Options
Consumer Protection Provisions
As mentioned in the beginning of this presentation, Performance LTC is a traditional long-term care insurance policy and to that end, continues to offer all of these benefits and features that you are familiar with.
Benefits may vary by state.

20. What’s Changing 3% Compound Inflation
Additional policy management tools
Minimum Issue Age 40
Additional Stay at Home from Flex Account
Paid-Up at 95 changed to Lifetime Payment
Independent Home Health Care providers no longer covered
Lapse Prevention Safeguard in lieu of Waiver of Premium
There are some features and benefits that are either new or changing with this new policy:
The addition of a 3% Compound Inflation option
Additional policy management tools will now be available
Minimum Issue Age has been raised to 40
Additional Stay at Home benefits are now available from the Flex Account
Lifetime premium payments, if a net premium is due
With Performance LTC, Independent Home Health Care providers will no longer be covered
A new Lapse Prevention Safeguard provision in lieu of a traditional Waiver of Premium benefit.

21. Traditional Waiver of Premium vs. Lapse Prevention Safeguard
Protects a policy from lapse
Premiums waived while insured is on claim
Any unpaid premium is covered first by Flex Account Balance, then withheld from benefit reimbursement
If insured comes off claim, premiums resume
Premium due resets each policy year
As you saw in the last bullet on the previous slide, Performance LTC has a new feature, Lapse Prevention Safeguard, that ensures the policy will not lapse while on claim.
When comparing this to a traditional Waiver of Premium you can see both features protect the policy from lapsing.
With the Lapse Prevention Safeguard, as long as there are credits in the Flex Account, premiums will be paid by the policy. If not, then premiums will be withheld from benefit reimbursement.
The amount of premiums due are reset each year on the Performance LTC.

22. Example of Lapse Prevention
100% of Flex Credits toward premiums
Age 80 premium $1,059 Annual Premium
$0 in Flex Account
$10,000 in eligible claims expenses
$9,001 claims reimbursed
50% of Flex Credits toward premiums
Age 80 premium $5,346
$28,629 in Flex Account
$10,000 claims reimbursed
Flex Credit Account reduced by $5,346 to pay annual premium
Let’s go back to our premium example where the client bought their policy at age 55. Now let’s assume that same client goes on claim at age 80 and has been allocating 100% of Flex Credits towards their premium. The assumed net premium for the year is $989 and there are no flex credits available in their Flex Account. Assuming they have $10,000 of qualified claims for the year, JH would reimburse $9,001 for the year.
In the example where the client allocated 50% of their Flex Credits towards reducing premiums, the assumed net premium would be $4,848. However since they had also accumulated credits in their flex account, the premiums would be paid by Flex Credits and they would be reimbursed for the full amount of eligible claim expenses.
This example is not intended to predict actual performance. Amounts set forth in this example are not guaranteed.
The projection of benefits is hypothetical and for illustration purposes only

23. Closing Thoughts
Sustainability: Performance LTC is built to handle uncertainty
Affordability: Lower premiums from John Hancock as competitors increase rates
Flexibility: Clients have more control over how much they pay & how they manage benefits
Transparency: Producers & clients can monitor policy performance
Guarantees: in growth of Benefit Amount and Pool of Money as well as in how John Hancock returns performance to policyholders
In closing, John Hancock’s revolutionary Performance LTC policy provides your clients with…
Sustainability: Performance LTC is built to handle future uncertainty
Affordability: Lower premiums from John Hancock as competitors increase rates
Flexibility: Clients have more control over how much they pay & how they manage their benefits
Transparency: You and your clients can monitor policy performance every year
Guarantees: in benefit growth and in how John Hancock returns performance to policyholders

24. Why John Hancock
John Hancock has been a leading long-term care insurance provider for more than 25 years4
Today, we pay approximately $2.8 million in long-term care claims per day4
John Hancock has paid more than $5.7 billion in total long-term care claims4
Over 1.3 million individuals have chosen us to meet their potential long-term care needs4
A big part of the long-term care insurance sale is the company you sell.
John Hancock has been a leading long-term care insurance provider for more than 25 years.
Today, we pay approximately $2.8 million in long-term care claims per day and we have paid more than $5.7 billion in total long-term care claims.
Over 1.3 million individuals have chosen us to meet their potential long-term care needs.
Based on John Hancock internal data from 1987 – July 4, Information is available upon request.

25. Financial Ratings5
As you can see from this chart, as of November 11, 2014, John Hancock’s financial ratings are among the highest in the industry.
Financial strength ratings, which are current as of November 11, 2014, and are subject to change, measure the Company’s ability to honor its financial commitments. The ratings are not an assessment or recommendation of specific policy provisions, premium rates, or practices of the insurance company.

26. Performance LTC Long-term care insurance with a difference
Thank you for your time today.
If you would like more information about our Performance LTC policy, please visit our producer website at
Long-term care insurance is underwritten by John Hancock Life Insurance Company (U.S.A.), Boston, MA (not licensed in New York) and in New York by John Hancock Life & Health Insurance, Boston, MA 02117
LTC /15
MLI