1. Manulife PAR – What we know

2. 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%

3. 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.

6. 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

7. Manulife’s CSV comparison

8. Manulife’s DB comparison

9. 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

10. 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

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

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

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