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Custom Care III featuring Benefit Builder

Custom Care III featuring Benefit Builder. Meeting the needs of a wider array of clients. Presented by:.

edward-sargent
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Custom Care III featuring Benefit Builder

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  1. Custom Care III featuringBenefit Builder Meeting the needs of a wider array of clients Presented by: Long-term care insurance is underwritten by John Hancock Life Insurance Company (U.S.A.), Boston, MA 02117 (not licensed in New York) and in New York by John Hancock Life & Health Insurance, Boston, MA 02117. LTC-8530 8/2/12 Rev. 8/13 For financial professional use only. Not for use with the public.

  2. Agenda • Industry overview • Consumer trends • Introduction to Custom Care III featuringBenefit Builder • Summary of changes from Custom Care III • Competitive niche and pricing • Why John Hancock • Conclusion

  3. Industry overview • Low interest rates impact insurance pricing • All time historic lows for a prolonged period of time • In our current environment, 1% interest rate decrease equates to a 10%-15% premium increase¹ 1. Quote from Jessie Slome, Executive Director, American Association of Long Term Care Insurance, 2009.

  4. Industry overview • Higher premiums on long-term care (LTC) insurance reflect the new environment 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

  5. John Hancock claims experienceMore people reaching the age where claims occur $ 2 0 1 1 2 0 1 1 Average claim lasts 2.7 years2 We expect 21% of our claims to last longer than 5 years2 We pay out an average of $3,000 per monthto each claimant2 Home Health Care claims cost 70%of Nursing Home claims2 2. Based on John Hancock internal data as of 12/31/11. Total includes individual and group LTC insurance, and the Federal Long Term Care Insurance Program.

  6. John Hancock claims experience As a % of all JH LTC Claims3 Less than 10% of our claims are closed due to benefit exhaustion 66% of claimants who begin the Elimination Period end up as an active claim 36% 10% 8% 7% 6% Less than 5% of claims are closed due to recovery Dementia Nervous System Stroke Heart Disease Musculoskeletal & Connective Tissue 3. Based on John Hancock internal data as of 12/31/11. Total includes individual and group LTC insurance, and the Federal Long Term Care Insurance Program.

  7. LTC buyer trends – Consumer needs • Younger Baby Boomer purchasers – average age 58 • 7.6 million Americans age 55 and older had private long-term care insurance coverage, accounting for 10.7% of adults in this age group4 • AHIP 2010 LTC Buyer/Non-Buyer Study Conclusions: • Most non-buyers indicated that cost was the most significant barrier to purchase (consistent 20-year trend) 4. http://www.urban.org/ “Who Purchases Long-Term Care Insurance,” March 2011, estimates are from 2008 Health and Retirement Study (HRS), page 2.

  8. What is Benefit Builder? Allows a policyholder to potentially grow their benefits at a price about half of what traditional policies cost today It is positioned as a default feature on our new Custom Care III policy A truly innovative approach to providing LTC insurance for price sensitive consumers Comprehensive Coverage Low Price Point Potential for Automatic Benefit Growth Access to New Markets

  9. Why we developed Benefit Builder • The next step to our product portfolio approach in the market • In response to the prolonged low interest rate environment • Interest rates have required carriers to re-price product multiple times over the past few years • To help grow the industry 2002 industry sales of approximately $1 Billion, average premium $1,7605 2011 industry sales of approximately $545 Million, average premium $2,4005 Industry sales decreased by 45% − average premium increase 36% 5. LIMRA Individual Long-Term Care Insurance Sales 2002 and 2011.

  10. Who is the Target Market for Benefit Builder? PRICE SENSITIVE BUYER 40-60 YEAR OLDS • Competing priorities • Those who did not buy before due to price • Older healthy clients who otherwise could not afford the premiums and may be less concerned with inflation • Would benefit the most from the long-term growth of Benefit Builder RISK AVERSE • Those who want to co-insure part of the risk

  11. Product Features

  12. Changes from Custom Care III • Premiums • New business rates increase slightly for new interest rate assumptions • 9% average for CPI Compound • 15% average for 5% Compound • Hospice Care • End of life care, including support for the family, in home or facility • Accessible during the elimination period • Policy paid up at age 95 – Standard Pay • Limited Pay options removed • Bank Draft available for all modes • GPO inflation option removed • Addition of innovative Benefit Builder option POLICY BENEFITS MAY VARY BY STATE

  13. Custom Care III featuringBenefit Builder • Four Inflation Options • Benefit Builder • CPI Compound • CPI Compound to Age 756 • 5% Compound • Why Benefit Builder? • An affordable alternative to traditional inflation options • Enables coverage to increase gradually over time • Particularly advantageous to younger buyers ages 40 to 60 • Has both a Voluntary feature and an Automatic feature 6. Not available in AZ and DE. POLICY BENEFITS MAY VARY BY STATE

  14. Benefit Builder Voluntary feature • Voluntary – Additional Premium • Buy-ups similar to GPO are offered every three years to age 757 • Option to increase benefits by 10% • Increases are at attained age rates without evidence of insurability • Issue age 64 and under may decline one offer and receive future offers. Issue age 65+ must accept all offers or the offers cease8 • Offers can be resumed with evidence of insurability six months before the policyholder's originally scheduled next "buy-up" offer date. • Offers will no longer be available if: • benefits have ever been paid; • policyholder was Chronically Ill during the two year period prior9 to the option date; or • policy has Survivorship and Waiver of Premium Benefit No age requirement in AZ and DE. In AZ, if any buy-up option is declined, no further offers. In DE, only 1 refusal is allowed. Can be on claim in the past 2 years in AZ and DE. POLICY BENEFITS MAY VARY BY STATE

  15. Benefit Builder Automatic feature • Automatically – Premium does not change • Concept is similar to participating whole life insurance policies • Allows the policy benefits to grow gradually over time with no corresponding increase in premium • When the cumulative Portfolio Rate of Return on the Benefit Builder Portfolio exceeds 3%, the unique crediting feature automatically increases the daily/monthly benefit10 • Automatic crediting will continue if on claim 10. Automatic crediting may not keep up with inflation. An excess earnings credit is determined based on our calculation of the portfolio rate of return in effect as of the policy anniversary, minus 3%, multiplied by the portion of assets attributed to your client’s policy in the portfolio, minus any adjustment for negative Excess Earnings Credits in prior years. Our calculation of the portfolio rate of return will be made according to the process that we have filed with the applicable insurance regulator. The excess earnings credit is divided by the single premium rate then in effect to determine the amount of the benefit increase. Portfolio returns are not guaranteed and will vary from year to year. The portion of the assets attributed to the policy in the portfolio will grow over time, therefore, there will be no benefit increases before the third policy anniversary, and in some cases, before the fourth policy anniversary. POLICY BENEFITS MAY VARY BY STATE

  16. Benefit Builder Unique crediting feature ( ) ANNUAL BENEFIT INCREASE AMOUNT Portfolio Rate of Return 3% Allocated Reserve Value Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits Single Premium Rate (Per $1 of coverage) POLICY BENEFITS MAY VARY BY STATE

  17. Benefit Builder Unique crediting feature • Portfolio is the subset of our general account that contains the assets which support the benefits for policies with Benefit Builder ( ) ANNUAL BENEFIT INCREASE AMOUNT PortfolioRate of Return 3% Allocated Reserve Value Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits Single Premium Rate (Per $1 of coverage) POLICY BENEFITS MAY VARY BY STATE

  18. Benefit Builder Unique crediting feature • Portfolio Rate of Return11is the annual rate of return (net of investment expenses) earned on the assets in the Portfolio • When the general account funding the policy exceeds 3%, the unique crediting feature automatically increases the daily/monthly benefit • Returns are not guaranteed and will vary from year to year ( ) ANNUAL BENEFIT INCREASE AMOUNT Portfolio Rate of Return 3% Allocated Reserve Value Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits Single Premium Rate (Per $1 of coverage) 11. Our calculation of the Portfolio Rate of Return will be made according to the process that we have filed with the applicable insurance regulators. POLICY BENEFITS MAY VARY BY STATE

  19. Benefit Builder Unique crediting feature • Allocated Reserve Value12is the portion of the assets in the Portfolio attributed to the individual policyholder • Premiums paid in plus investment earnings less expense and past expected claims • Re-determined each anniversary based on benefit changes • Will not change in the event of an inforce rate increase ( ) ANNUAL BENEFIT INCREASE AMOUNT Portfolio Rate of Return 3% Allocated Reserve Value Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits Single Premium Rate (Per $1 of coverage) 12. Due to the time needed to build up the Allocated Reserve Values, no excess earning credits will be applied before the third policy anniversary, an in some cases before the fourth policy anniversary. POLICY BENEFITS MAY VARY BY STATE

  20. Benefit Builder Unique crediting feature • Excess Earnings Credits are determined on each Policy Anniversary ( ) ANNUAL BENEFIT INCREASE AMOUNT Portfolio Rate of Return 3% Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits Allocated Reserve Value Single Premium Rate (Per $1 of coverage) POLICY BENEFITS MAY VARY BY STATE

  21. Benefit Builder Unique crediting feature • Single Premium Rate13is the rate for $1 of LTC insurance coverage based on attained age ( ) ANNUAL BENEFIT INCREASE AMOUNT Portfolio Rate of Return 3% Single Premium Rate (Per $1 of coverage) Allocated Reserve Value Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits 13. In the event of an inforce rate increase on the Custom Care III featuring Benefit Builder policy, the single premium rate applied to new excess earning credits will be revised to reflect updated assumptions, subject to regulatory approval. As a result, any future Excess Earning Credits will purchase a lower amount of benefit increases. POLICY BENEFITS MAY VARY BY STATE

  22. Benefit Builder Unique crediting feature • Annual Benefit Increase Amountis the Excess Earning Credit/single premium rate • In a year or years when the Portfolio Rate of Return is 3% or less, your benefits will remain the same • Any future benefit increases will be offset to make up for any prior returns below 3% ( ) ANNUAL BENEFIT INCREASE AMOUNT Portfolio Rate of Return 3% Allocated Reserve Value Any adjustments for negative excess earnings credits occurring in prior years ExcessEarnings Credits Single Premium Rate (Per $1 of coverage) POLICY BENEFITS MAY VARY BY STATE

  23. Benefit Builder Automatic benefit increase example Male, Issue Age 50, Married, Preferred, $200 Daily Benefit, 90-Day Elimination Period, 3-Year Benefit Period, $219,000 Starting Policy Limit Assumes consistent hypothetical 6% Portfolio Rate of Return = New Daily Benefit Age Allocated Reserve Value X ( Portfolio Return - 3.0% ) + Prior Negative Credits = Excess Earnings Credit / Single Premium (per $1) = Automatic Benefit Increase + Buy-Up + Prior Daily Benefit = $292.77 80 $27,802 X ( 6.0% - 3.0% ) + $0 = $834 / $126 = $6.62 + $0 + $286.15 = $299.65 81 $29,557 X ( 6.0% - 3.0% ) + $0 = $887 / $129 = $6.88 + $0 + $292.77 POLICY BENEFITS MAY VARY BY STATE

  24. Benefit Builder Sample illustration14 Male, Issue Age 50, Married, Preferred, $200 Daily Benefit, 90-Day Elimination Period, 3-Year Benefit Period 3.0% 5.0% 6.0% 7.0% AGE PREMIUM LTC BENEFIT POLICY LIMIT LTC BENEFIT POLICY LIMIT LTC BENEFIT POLICY LIMIT LTC BENEFIT POLICY LIMIT 50 $689.00 $200.00 $219,000 $200.00 $219,000 $200.00 $219,000 $200.00 $219,000 51 $689.00 $200.00 $219,000 $200.00 $219,000 $200.00 $219,000 $200.00 $219,000 52 $689.00 $200.00 $219,000 $200.00 $219,000 $200.00 $219,000 $200.00 $219,000 53 $68900 $200.00 $219,000 $200.05 $219,055 $200.07 $219,077 $200.09 $219,099 54 $689.00 $200.00 $219,000 $200.26 $219,285 $200.38 $219,416 $200.50 $219,548 55 $689.00 $200.00 $219,000 $200.63 $219,690 $200.94 $220,029 $201.25 $220,369 56 $689.00 $200.00 $219,000 $201.16 $220,270 $201.74 $220,905 $202.33 $221,551 57 $689.00 $200.00 $219,000 $201.85 $221,026 $202.79 $222,055 $203.75 $223,106 58 $689.00 $200.00 $219,000 $202.69 $221,946 $204.08 $223,468 $205.50 $225,023 59 $689.00 $200.00 $219,000 $203.68 $223,030 $205.60 $225,132 $207.58 $227,300 60 $689.00 $200.00 $219,000 $204.82 $224,278 $207.36 $227,059 $209.99 $229,939 61 $689.00 $200.00 $219,000 $206.11 $225,690 $209.36 $229,249 $212.74 $232,950 62 $689.00 $200.00 $219,000 $207.55 $227,267 $211.60 $231,702 $215.84 $236,345 63 $689.00 $200.00 $219,000 $209.13 $228,997 $214.07 $234,407 $219.28 $240,112 64 $689.00 $200.00 $219,000 $210.84 $230,870 $216.77 $237,363 $223.05 $244,240 65 $689.00 $200.00 $219,000 $212.68 $232,885 $219.68 $240,550 $227.15 $248,729 66 $689.00 $200.00 $219,000 $214.66 $235,053 $222.83 $243,999 $231.61 $253,613 67 $689.00 $200.00 $219,000 $216.78 $237,374 $226.23 $247,722 $236.44 $258,902 68 $689.00 $200.00 $219,000 $219.04 $239,849 $229.87 $251,708 $241.64 $264,596 69 $689.00 $200.00 $219,000 $221.44 $242,477 $233.75 $255,956 $247.22 $270,706 70 $689.00 $200.00 $219,000 $223.98 $245,258 $237.88 $260,479 $253.19 $277,243 14. Actual Portfolio Rates of Return vary from year to year. Daily Benefit and Total Pool of Money will not increase exactly as illustrated. Returns are not guaranteed. POLICY BENEFITS MAY VARY BY STATE

  25. Benefit BuilderHypothetical Illustration at 6%15 6.0% LTC BENEFIT POLICY LIMIT AGE 50 $200.00 $219,000 • Age 50 male applicant • No Voluntary Buy Ups – only Automatic Crediting • Years 1 through 10 with 6% general account hypothetical rate of return • First 5 to 8 years with minimal growth to the Daily Benefit and Policy Limit 51 $200.00 $219,000 52 $200.00 $219,000 53 $200.07 $219,077 54 $200.38 $219,416 55 $200.94 $220,029 56 $201.74 $220,905 57 $202.79 $222,055 58 $204.08 $223,468 59 $205.60 $225,132 80 $292.77 $320,583 • Age 50 applicant is now age 80 • Showing through age 85 • The Policy Limit has grown more than 50% 81 $299.65 $328,117 82 $306.79 $335,935 83 $314.20 $344,049 84 $321.88 $352,459 85 $329.84 $361,175 15. Actual Portfolio Rates of Return vary from year to year. Daily Benefit and Total Pool of Money will not increase exactly as illustrated. Returns are not guaranteed. POLICY BENEFITS MAY VARY BY STATE

  26. Benefit Builder Historical perspectives • The 5%, 6% & 7% Portfolio Rates of Return are hypothetical for illustration purposes only • The investment mix of the Portfolio may change over the life of the policy • We currently expect to invest approximately 80 percent of the Portfolio in fixed income investments, with a smaller portion in equities PERIOD Fixed Income* S&P 500 EQUITIES*** 1 year 4.5% 2.1% 3 years 5.2% 13.6% 5 years 5.7% 0.1% 10 years 5.7% 3.0% 20 years 6.5% 7.7% 30 years 7.9% 10.6% NOTESHistorical annualized returns on investments for similar asset classes may be shown by reference to the above benchmark indices for various periods ending on December 30, 2011. *Based on weighted average yields on Barclays Intermediate Corporate, A Corporate, US Corporate 7-10 years and Long US Corporate indices. Weights reflect current fixed income investment strategy and data availability. **Based on S&P 500 index and S&P 500 dividend yields. POLICY BENEFITS MAY VARY BY STATE

  27. Benefit Builder summary POTENTIAL FOR GROWTH INCREASED BENEFITS PROTECTION AGAINST RATES Benefit Builder provides the potential for automatic benefit growth, along with buy-up options for added inflation protection all at an affordable price point. Benefit Builder passes on increased benefits to the policyholder over time as interest rates rise and associated earnings grow. This is the only product on the market designed to benefit consumers in a rising interest rate environment. If interests rates rise, there’s no future benefit to the consumer under a traditional non-participating policy.

  28. Competitive Niche

  29. Changes among top carriers • Withdrawal from individual market • Withdrawal from California • New business rate increases from 9%-55% • Reduction in current discounts • Removal of riders and options for some carriers • Removal of indemnity riders • Removal of 10-year and Lifetime Benefit Periods • Removal of SharedCare option on some plans • Removal of Limited-Pay Options • Removal of preferred ratings • Adjustments to producer compensation • Tightening of underwriting requirements • Move to gender distinct pricing

  30. Benefit Builder premiumsBenefit Builder vs. No Inflation/GPO Male and Female, Issue Age 50, Married, Standard, $4,500 Monthly Benefit, 90-Day Elimination Period, 3-Year Benefit Period New York Life NYL Select Premier 5.5 $150 Daily Benefit $1,698 COMPANY NAME PRODUCT NAME PRODUCT NOTES PREMIUM Transamerica Married Discount 30% to 20% TransCare II 2012 $1,458 Mutual of Omaha Mutual Care Plus 2012 GPO; Policy Type = MutCare MyWay $1,090 Genworth Privileged Choice Flex 2 Gender Select Underwriting with Couples Discount $1,676 UW Class = Select/Preferred United of Omaha Cash-First 2012 40% Cash Benefit, GPO, BP Years = 3.2 $1,233 Northwestern Mutual QuietCare $150 Daily Benefit, EP=12 weeks $1,241 John Hancock $1,404 CCIII w/Benefit Builder 2013 Gender Mass Mutual MM-500 2013 $1,405 Competitive information is accurate to best of knowledge as of April 2013.

  31. Benefit Builder Sales Ideas:Benefit Builder versus No Inflation16/GPO $7,000 Benefit Builder (Assuming Constant 6% annual hypothetical portfolio rate of return) Monthly Benefit of each policy $6,587 Total Combined Premium of $42,120 $6,000 $5,000 $4,000 Competitor with no inflation17 Monthly Benefit of each policy $4,500 Total Combined Premium of $42,000 MONTHLY BENEFIT $3,000 $2,000 $1,000 $0 1 5 10 15 20 25 30 YEAR Year 16. Assumes no Buy-Up Options under the Benefit Builder feature or GPO options under competitor products where available were taken. Actual Portfolio Rates of Return vary from year to year. Monthly Benefit and Total Pool of Money will not increase exactly as illustrated. Returns are not guaranteed. Premiums are not guaranteed. 17. Average premium for No Inflation Genworth 2013, Transamerica, Mass Mutual-500, Mutual of Omaha, NY Life, and Northwestern Mutual as of 4/2013.

  32. Benefit Builder sales ideasPay Less Premium • Age 50; 3-Year BP; 90 EP;Male & Female Married Standard Rates • Competitors:18 • $4,500 Month initial benefit • 3% Compound • Average premium $2,852 • CCIII featuring Benefit Builder • John Hancock Monthly initial benefit $4,500 Month • Annual Premium = $1,404 • Summary • Benefit amount grows 46% • 103% premium savings of $1,448 per year $12,000 Competitor 3% Compound18 Monthly Benefit of each policy $10,932 Total Combined Premium of $85,560 $10,000 $8,000 MONTHLY BENEFIT $6,000 $4,000 Benefit Builder19 (Assuming Constant 6% annual hypothetical portfolio rate of return) Monthly Benefit of each policy $6,587 Total Combined Premium of $42,120 $2,000 $0 1 5 10 15 20 25 30 YEAR 18. Average premium for 3% Compound Genworth 2013 Transamerica, Mass Mutual-500, Mutual of Omaha, NY Life, and Northwestern Mutual as of 4/2013. 19. Actual Portfolio Rates of Return vary from year to year. Monthly Benefit and Total Pool of Money will not increase exactly as illustrated. Returns are not guaranteed. Premiums are not guaranteed.

  33. Benefit Builder sales ideasTaking buy-ups • Age 50; 3-Year BP; 90 EP;Male & Female Married Standard Rates • Competitors:20 • $4,500 Month initial benefit • 3% Compound • Average premium $2,852 • CCIII featuring Benefit Builder21 • John Hancock Monthly initial benefit $4,500 Month • Annual Premium = $1,404 • Buy-ups every three years to age 62: • Summary • Slightly less growth, but lower premium, especially in the first 10 years • Total cost over 30 years is $21,465 less $12,000 Competitor 3% Compound20 Monthly Benefit of each policy $10,932 Total Combined Premium of $85,560 $10,000 $8,000 MONTHLY BENEFIT $6,000 Benefit Builder21 (Assuming Constant 6% annual hypothetical portfolio rate of return and 5 buy-ups) Monthly Benefit of each policy $9,215 Total Combined Premium of $64,095 $4,000 $2,000 $0 1 5 10 15 20 25 30 YEAR 20. Average premium for 3% Compound Genworth 2013, Transamerica 2012, Mass Mutual-500, Mutual of Omaha, NY Life and Northwestern Mutual as of 4/2013. 21. Assumes no Buy-Up Options under the Benefit Builder were taken. Actual Portfolio Rates of Return vary from year to year. Monthly Benefit and Total Pool of Money will not increase exactly as illustrated. Returns are not guaranteed. Premiums are not guaranteed.

  34. Benefit Builder sales ideasMore benefit upfront Benefit Builder22 (Assuming Constant 6% annual hypothetical portfolio rate of return) Monthly Benefit of each policy $10,978 Total Combined Premium of $70,170 • Age 50; 3-Year BP; 90 EP;Male & Female Married Standard Rates • Competitors:23 • $4,500 Month initial benefit • 3% Compound • Average premium $2,852 • CCIII featuring Benefit Builder22 • John Hancock Monthly initial benefit $7,500 Month • Annual Premium $2,339 • Summary • More Monthly Benefit throughout the life of the policy • Premium savings of $513/year • Added protection of the Double Coverage for Accident Benefit $12,000 $10,000 $8,000 MONTHLY BENEFIT $6,000 Competitor 3% Compound23 Monthly Benefit of each policy $10,932 Total Combined Premium of $85,560 $4,000 $2,000 $0 1 5 10 15 20 25 30 YEAR 22. Assumes no Buy-Up Options under the Benefit Builder were taken. Actual Portfolio Rates of Return vary from year to year. Monthly Benefit and Total Pool of Money will not increase exactly as illustrated. Returns are not guaranteed. Premiums are not guaranteed. 23. Average premium for 3% Compound Genworth 2013, Transamerica 2012, Mass Mutual-500, Mutual of Omaha, NY Life, and Northwestern Mutual as of 4/2013.

  35. Competitive differentiators • Double Coverage for Accident Benefit Under Age 65 • Return of Premium Under Age 65 • Caregiver Support Services • Claimant information resources and rate negotiation services • Care Advisory Services • Yearly benefit 10x daily for independent assessment • Additional Stay at Home Benefit • 30x Daily Benefit to modify home Policy benefits may vary by state POLICY BENEFITS MAY VARY BY STATE

  36. Competitive differentiators • Unlimited CPI Compound Inflation • Provides meaningful, appropriate and affordable inflation protection • Annual Compound increases based on the Consumer Price Index (CPI) • Urban CPI matches long-term care inflation • No limit to the CPI increase • Safety: Whenever the CPI index changes, policy benefits and John Hancock’s investment earnings on underlying assets are synchronized • 50 year average CPI return of 4.1% • $288,000 Compounded @ 3% for 25 Years = $603,008 • $288,000 Compounded @ 4.1 for 25 Years = $786,431 POLICY BENEFITS MAY VARY BY STATE

  37. Premium rank among peer companies John Hancock CPI vs. 3% Compound Male and Female, Issue Age 50, Married, Standard, $4,500 Monthly, 90-Day EP, 3 Year BP COMPANY NAME PRODUCT NAME PRODUCT NOTES PREMIUM $2,129 Mutual Care Plus 2012 Policy Type = MutCare MyWay Mutual of Omaha Privilege Choice Flex 2 Gender Select underwriting with couples discount $2,232 Genworth 40% Cash Benefit; BP Years = 3.2 $2,513 United of Omaha Cash-First 2012 John Hancock CCIII w/Benefit Builder 2012 CPI $2,793 Married Discount 30% to 20% Transamerica TransCare II 2012 $2,873 MM-500 2013 MassMutual Underwriting Class = Select Preferred $3,057 Northwestern Mutual QuietCare $150 Daily Benefit $3,210 New York Life Select Premier 5.5 $150 Daily Benefit; CPI Auto $3,952 Competitive information is accurate to best of knowledge as of July 2012.

  38. Why John Hancock • John Hancock leading brand with 94% overall consumer awareness24 • And 98% among the affluent • LTC insurance experience25 • Over 25 years of LTC industry experience • Over 1.3 million LTC insurance policyholders • Over $4.7 billion in LTC claims paid • Over $2 million paid out every day • Over 700 employees dedicated to LTC 24. Chadwick Martin Bailey 2007. 25. John Hancock Internal Claims Data 12/31/12.

  39. Strength & stabilityFinancial ratings among the highest in the insurance industry26 John Hancock Life Insurance Company (U.S.A.) A.M. Best A+ (2nd of 15 ratings) Superior ability to meet ongoing obligations. Fitch Ratings AA- (4th of 19 ratings) Very strong capacity to meet policyholder and contract obligations. Standard & Poor’s AA- (4th of 21 ratings) Very strong financial security characteristics. Moody’s A1 (5th of 21 ratings) Good financial security. 93 Comdex Rating 26. Financial strength ratings, which are current as of December 31, 2012, 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. The Comdex, which is current as of August 31, 2011, is a composite of financial strength ratings as judged by Standard and Poor’s, Moody’s, A.M. Best and Fitch Ratings. It gives the average percentile ranking in relation to all other companies that have been rated by the rating services. For more information go to www.vitalsalessuite.com (VitalSigns).

  40. Conclusion • John Hancock remains a committed LTC insurance leader • In a price sensitive market, John Hancock offers two solutions that respond to the economic environment • Benefit Builder and CPI Inflation • Custom Care III featuringBenefit Builder is a benefit-rich policy • Competitively priced • Incorporating the most recent claimant data • Reflects the most current interest rates and economic assumptions • There has never been a better time to leverage current market conditions and purchase LTC insurance

  41. Benefit Builder illustration disclaimers • The returns shown on these indices may not be representative of the Portfolio Rate of Return that we would calculate for a number of reasons, including the following: • Historical returns are not indicative of future results. • The returns on the fixed income indices do not show the effects of capital gains and losses, which would be included in calculating the Portfolio Rate of Return. • Our calculation of the Portfolio Rate of Return will reflect the effects of weighting on the Portfolio that will result from inflows and outflows over periods of varying investment returns. The returns on the subject indices do not reflect any effect of weighting. • The returns shown do not account for investment expenses. We currently expect to charge investment expenses of 0.17%, but this percentage may change. Accounting for these investment expenses will reduce the Portfolio Rate of Return • The calculation of the excess earnings credit for the Benefit Builder feature for any year allows us to net past shortfalls from prior years where the Portfolio Rate of Return (net of investment expenses) was below 3%, until the aggregate excess earnings credit is greater than zero. This netting concept may result in no increase in benefits under the Benefit Builder feature even where the Portfolio Rate of Return for a given year exceeds 3%. • We have the absolute right to and may vary the investment mix of the Portfolio.

  42. Custom Care III featuring Benefit BuilderAn affordable alternative to traditional inflation options Long-term care insurance is underwritten by John Hancock Life Insurance Company (U.S.A.), Boston, MA 02117 (not licensed in New York) and in New York by John Hancock Life & Health Insurance, Boston, MA 02117. LTC-8530 8/2/12 Rev. 8/13

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