Custom Care II Essential Care II FamilyCare Benefit II

1. Custom Care IIEssential Care IIFamilyCare Benefit II Long-Term Care Insurance is underwritten by John Hancock Life Insurance Company, Boston, MA 02117 For professional use only. Not for use with consumers LTC-CCIIWEBTEL 10-03

2. Agenda • Background to New Products • Product Positioning • Product Introduction • Custom Care II • FamilyCare Benefit • Essential Care II • Marketing the New Products • Marketing Themes • Product Recommendations • Conclusion

3. The state of the LTCI industry • Low interest rate environment • Higher than expected persistency • For some, worse than expected morbidity and profitability • Regulatory impact • Recognizing industry and internal concerns with unlimited benefits and compound inflation

4. Hancock Product Evolution to Address: Market Conditions, Consumer Trends and Product Experience • Addressing current market conditions • Addressing consumer trends • Flight to quality and brand • Younger buyers • recognizing they have different needs • Addressing immediate needs and “today benefits” with appropriate benefits • Affordability

5. Hancock Product Evolution to Address: Market Conditions, Consumer Trends and Product Experience • Product Experience • Ensuring appropriate pricing given corporate and industry trends • LTCI still in early phases of experience • JH objective approach to business • Ensuring JH long-term viability • Towards more consumer appropriate and affordable benefits • More likely-to-use benefits and benefit periods

6. John Hancock LTCI Strategy • Develop LTCI products for the long-term • Balance the evolving needs of consumers, distribution and John Hancock • Leverage brand • Differentiate through product and process innovation • Meet specific needs for our diverse consumer and distribution population • Employ sound risk management & responsible pricing

7. Custom Care II Positioning John Hancock continues • Rich tradition • Product innovation • Meeting diverse consumer needs Custom Care II is: • Evolution of popular & pacesetting product • Similar look and feel • Sets the product standard for today’s changing LTC environment • Reaffirms John Hancock’s leadership position • Broadens younger market appeal • Offers innovative built-in features • Continues to expand on the broad, multi-generational appeal

8. Product Features& Benefits Product features, options, availability and rates vary by state.

9. Custom Care II: Policy Building Blocks Eligibility for Benefits for the Custom Care II Portfolio • Need Substantial Assistance to perform at least two of the six Activities of Daily Living • Bathing, continence, dressing, eating, toileting, or transferring • Substantial Assistance means “Hands-on or Stand-by” assistance (or) • Requires Substantial Supervision to protect himself or herself due to presence of “Severe Cognitive Impairment” • Clinical evidence and standardized tests (and) • A licensed health care practitioner certifies the ADL disability is expected to continue for at least 90 days

10. Custom Care II: Policy Building Blocks Coverage • Pay actual charges up to the LTCI Benefit Amount • At home (Adult Day Care, Professional Care, Hospice Care and Incidental Homemaker Services) • Independent home health care provider definitions • Immediate family members can be compensated if working through an approved provider • In a Nursing Home or Assisted Living Facility • Unused benefits extend the benefit period

11. Custom Care II: Policy Building Blocks • Applicant Age • Ages 18-84 • Ages 80-84 with limited benefits • LTCI Benefit Amount • Choose from a Monthly or Daily Benefit • Monthly $1,500 to $15,000 limit • in $100 increments • Daily $50 to $500 • in $10 increments

12. Custom Care II: Policy Building Blocks Benefit Periods • Multiplier for the Benefit Amount • 2 years (730 days) or 24 months • 3 years (1,095 days) • 4 years (1,460 days)* • 5 years (1,825 days)* • 6 years (2,190 days)* • 10 years (3,650 days)* • Lifetime (unlimited days)* * Not available ages 80-84. Options vary by state. LTC-03

13. Custom Care II: Policy Building Blocks Elimination Periods (EP) • Deductible where client pays for services before the policy pays • 30 days * • 60 days * • 90 days • 180 days • 365 days • “True cumulative” EP: days do not need to be consecutive or within the same claim • For Home Health Care (HHC) • At least one day of HHC in a calendar week = seven days in calculating the EP * Not available ages 80-84. Options vary by state. LTC-03

14. Custom Care II: Policy Building Blocks Inflation Protection • 5/5% Annual Compound Inflation Option • LTCI Benefit & Policy Limit increased 5% compound, each year • Increases applied to the remaining policy limit, even if on claim • 5/3% Annual Compound Inflation Option (New!) * • LTCI Benefit Amount increased 5% compound each year • LTCI Policy Limit increased 3% compound each year • Increases applied to the remaining policy limit, even if on claim • Annual Simple Inflation Option • LTCI Benefit increased 5% of original benefit, each year • Increases applied to the remaining policy limit, even if on claim * Please note that 5/3% Compound Inflation may accelerate the usage of a Benefit Period Inflation options may be dropped after issue

15. Are the effects of inflation covered?How does the inflation option effect premium? 5 Year Benefit Period, 90 Day Elimination Period, Daily Benefits: Fixed Benefits – Variable Premium 5/5% Premium = $3,104 5/3% Premium = $2,425 5% Simple = $2,256

16. Are the effects of inflation covered?Fixed Premium ($3,000)Variable Daily Benefit:10 Year 5/5% Inflation vs. 5/3%, 5% Simple and GPO w/out conversion 90 Day Elimination Period, Daily Benefits

17. Custom Care II: Policy Building Blocks Inflation Protection (cont.) • Enhanced Guaranteed Purchase Option (GPO) - (New!) • Insured may purchase additional coverage w/out underwriting every 3 years (5%, 10% or 15% of original amount) • If benefits have been paid in the previous 2 year period or if the insured is older than age 90 no offer will be made • One time option to change to 5/5% or 5/3% compound inflation for increased premium at age 65 • No Inflation • Only available with Limited Pay Options, The Survivorship and Waiver of Premium Benefit, or FamilyCare Benefit Inflation options may be dropped after issue

18. Enhanced GPO Inflation ExampleGPO with 5/5% or 5/3% Conversion at 65Daily Benefit, Policy Limits and Premiums • Policyholder, age 55 with college expenses wishes to limit premiums in early policy years • Sees premium for compound 5/5% at age 55 = $1,522 • Wants GPO for savings and choice with inflation protection • Does not elect any GPO offers prior to age 65 • GPO Conversion to compound inflation at age 65 • Premium for GPO w/ 5/5% conversion = $649 to age 65 • Then go to $1,730 at 65 • Premium for GPO w/ 5/3% conversion = $649 to age 65 • Then $1,438 after 65

19. Custom Care II Highlights New features and benefits Special benefits for the growing younger consumer market: “Today Benefits” Double Accident Benefit prior to age 65 (built in – New!) • 100% Reimbursement up to two times the maximum daily or monthly benefit if care is the result of an accident prior to age 65 • For the entire duration of the claim • Dovetails well with Disability Insurance • Lifestyle U/W and ability to issue without benefit to preserve case • Not available with Lifetime Benefits or the FamilyCare Benefit • Return of Premium prior to age 65 (built in – New!) • Total premiums paid less policy benefits paid when death occurs prior to age 65 • Not available with FamilyCare Benefit *Options may not be available in all states ** Applies to ECII

20. Custom Care IIAdditional Built-In Benefits • Respite Care • Short-term temporary care to provide relief to the primary uncompensated caregiver • 21 days per calendar year • Respite Care is not subject to, nor does it satisfy the elimination period • Respite Care does reduce the policy limit • Care Advisory Services (CAS) • The benefit eligible policyholder may chose an independent professional to assist in determining the care and treatment plan • 1/3 the Monthly or 10X the Daily Benefit Amount, annually • May be paid before the EP is satisfied • Does not reduce the policy limit !!! • Does not count towards the EP

21. Custom Care IIAdditional Built-In Benefits • Stay-at-Home Benefit • Home modifications, durable medical equipment, caregiver training, home safety checks, provider care checks, and medical alert systems • 1X the Monthly or 30X the Daily Benefit Amount • May be paid before the EP is satisfied • Must be benefit eligible • Does not reduce the policy limit !!! • Does not count towards the EP • Bed Hold Benefit • Actual covered charges will be paid to ensure your room will be available at a facility when a stay is interrupted for any reason • Up to 60 days per calendar year • Subject to the elimination period and does reduce the policy limit

22. Custom Care II Additional Built-In Benefits • International Coverage (Updated!) • Receive coverage for care anywhere in the world • Reimbursement basis for actual expenses • Up to 100% of the Benefit Amount for 1 year • Payment in U.S. currency • All benefits except Double Accident Benefit, Stay-at-Home, Respite Care, and Care Advisory Services • Loyalty 5% Credit (New!) • Allows current John Hancock LTCI policy holders to replace a prior series product with the Custom Care II product • With a 5% annual reduction in premium • Original policy must be in effect for 2 years • Rates at attained age and fully underwritten

23. Custom Care IIAdditional Built-In Benefits • Advantage List • Negotiated Discounts • Nationwide list of providers that will provide discounts to John Hancock policyholders for their LTC charges • Not a PPO • Coordination of Benefits (New!) • Provision coordinating with other JH LTCI policies • No duplication of benefits • Does not include true group or combo products

24. Custom Care IIFunding Flexibility Premium Features • Thirty Day Free Look • If the policyholder is not satisfied, they may return the policy within 30 days for a refund • Waiver of Premium * • Begins once the elimination period is satisfied • Ends once benefits are no longer payable • Guaranteed Renewable • John Hancock cannot cancel a policy if the client pays premiums on time • Company reserves the right to increase the premiums by class, subject to state approval * Varies by state.

25. Custom Care IIFunding Flexibility Lapse Features • Grace Period • The policy has a 65 day grace period • If renewal is not paid within 30 days of due date: • We will notify designated person(s) and give 35 additional days to pay the premium with the policy in effect • Added Protection Against Lapse • The policyholder may designate a person to receive notice if a premium is overdue • Contingent Nonforfeiture • In effect if the optional Nonforfeiture rider is not chosen • In the event of a rate increase exceeding a threshold • Two options (Reduce benefit or convert to paid-up)

26. Custom Care IIRatings and Discounts • Underwriting Classes • Preferred (Discounted 15% of Standard) • Standard (Select) • Class I (125% of Standard Premium) • Class II (150% of Standard Premium) • Partner Discounts (New!) • Defined as: • Spouse of a married couple (or) • Same sex or opposite sex partners that have lived together 5 years (or) • Family members of the same generation that have lived together 5 years • 15% discount for a partner applying • 30% if both applying and approved • 40% Cap Discount for Preferred, Both Apply & Approved

27. Custom Care II Ratings/Discounts (continued) • Family Discounts • If three or more family members of an immediate family purchase individual policies • 5% Multiplicative Discount (with commission reduction) • Eligible include: spouses, parents, grandparents, step-parents, children, step-children, siblings, and in-laws • Sponsored Group • Eligible groups • Associations of 10 or more • Employers of 5 or more • 5% Sponsored Group Discount (Multiplicative) • There is a commission reduction with the Family Discount and Sponsored Group Discount Please refer to the LTC Producer Guide LTC-2722 for discount parameters and combination details.

28. Custom Care IIFunding Flexibility Payment Options • Limited Payment Options • 10 Pay • Paid-Up at Age 65 (available through age 55) • Both are guaranteed renewable during the premium paying period • Non-cancelable thereafter • Modal Options * • Annual • Semi-annual • Quarterly • Monthly Bank Draft * Modal options other than annual have a service charge. Please refer to the LTC Producer Guide LTC-2722 for discount parameters and combination details.

29. Eight Optional Choices Emphasizing Home Care and Preserving Choice • Waiver of Home Care Elimination Period • Additional Cash Benefit (Enhanced!) Emphasizing Benefit and Premium Preservation • Restoration of Benefits • Nonforfeiture • Enhanced Return of Premium(New!) Emphasizing Choice for Family, Spouse & Partner • Shared Care (Enhanced!) • Survivorship and Waiver of Premium Benefit • FamilyCare Benefit

30. Optional Riders EmphasizingHome Care and Preserving Consumer Choice • Waiver of Home Care Elimination Period • Waives Elimination Period for Home Health Care • Creates a 0 day HHC EP • Days of HHC count towards the Facility EP • Waiver of Premium begins once the Facility Elimination Period is met • Rider Price 9% Not available 180/365 day EP, or to ages 80-84

31. Optional Riders EmphasizingHome Care and Preserving Consumer Choice • Additional Cash Benefit (Updated!) * • Separate monthly pool of funds to help the prospect stay at home • Cash benefit equal to 15% the Monthly Benefit or 4.5 times the Daily Benefit if insured is receiving HHC and not receiving facility care • Separate additional pool of money for use at the discretion of the insured • LTCI Benefit Amounts at time of purchase greater than $4,500 per month or $150 per day may have tax implications** • Rider cost 10 % * Option varies by state. ** Please consult your professional tax advisor.

32. Optional Riders EmphasizingBenefit and Premium Preservation • Restoration of Benefits • Policy limit is restored if insured is “fully recovered” and does not meet benefit triggers for 180 days • Rider Cost 4% • Nonforfeiture • Insured receives policy with reduced policy limit if the policy lapses after it has been in force for at least 3 years (one year with limited pay options) • Reduced policy limit is sum of premiums paid, less benefits paid • Rider Cost 6%

33. Optional Riders EmphasizingBenefit and Premium Preservation • Enhanced Return of Premium upon Death Benefit (New!) • Pays beneficiary the benefit upon death • Regardless of age at death • Pays all premiums paid, less any benefits paid prior to the date of death • Accumulated without interest • Rider cost based on age is 35-150%

34. Optional Riders EmphasizingChoice for Partner and Family Options • Survivorship and Waiver of Premium Benefit • If partner goes on claim, the premium for the healthy partner is waived (both premiums are waived) • If partner dies, surviving partner’s policy becomes paid up • Both policies must have been in force for 10 years with no claims in first 10 years • Rider Cost 9%

35. Optional Riders EmphasizingChoice for Partner and Family Options • SharedCare (Updated!) • 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 • 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 • Addition of 10 year benefit period choice • Rider Cost 26%, 16%, 11%, 10%, 8% & 5% for 2/3/4/5/6 and 10 year BP, respectively

36. Family Care Benefit Up to four family members can be covered under one LTC insurance policy. This multi-generational policy is available with the Custom Care II Policy This benefit gives the insured affordable coverage for themselves, their immediate family and extended family at the same time

37. FamilyCare BenefitOverview • Revolutionary multi-generational LTCI benefit • Select up to three family members to add to a prospect’s policy • Monthly or daily maximum benefit can be shared by all covered family members out of a single pool of money • Affordable way to pool resources and protect multiple family members • Benefit bequethment feature • Cost based upon number of insureds and their ages

38. FamilyCare BenefitOverview* • One Applicant & One Policy - Can add three insureds • Primary applicant chooses all benefits and options • All insureds have access to the benefits • Each additional family member must fill out an application • Benefits can be paid on behalf of any covered person after the elimination period is met • The Elimination Period must only be satisfied once • Originating policyholder is responsible for payments • In case of death, or policy cancellation, ownership of the policy can be transferred • Any insured can be removed and premiums reduced * Benefits are capped for the one policy - regardless of how many family members are on claim.

39. FamilyCare Benefit • Applicant Age • All applying family members must be ages 18-79 • Benefit Periods • Multiplier for the Benefit Amount • 4 years (1,460 days or 48 months) • 5 years (1,825 days or 60 months) • 6 years (2,190 days or 72 months) • 10 years (3,650 days or 120 months) • Inflation Options • All options except Enhanced GPO • No Inflation is an option

40. FamilyCare BenefitAdditional Coverage Features • Same as Custom Care* • Nursing Home, Assisted Living, and Home Care Benefits • Respite Care Benefits • Bed Hold Benefit • Care Advisory Services • Stay at Home Benefit • Loyalty Credit • Waiver of Premium • International Coverage • No Double Accident Benefit of Return of Premium prior to age 65 * Benefits are capped for the one policy - regardless of how many family members are on claim.

41. FamilyCare BenefitThree Optional Riders • Waiver of Home Health Care Elimination period • Additional Cash Benefit • Nonforfeiture Benefits are capped for the one policy - regardless of how many family members are on claim.

42. Essential Care II Offers high quality catastrophic coverage without the frills to address the price conscious marketplace Essential Care II offers standard features, a daily benefit, and fewer rider options

43. Essential Care II • Offers strong essentials • Standard benefit triggers • Daily Benefits • Covers all levels of care • Wide range of EPs and BPs • All inflation options • Retains key Custom Care II features • Partner definitions and discounts • Improved SharedCare • International coverage • Advantage List, etc. BSC-02

44. Essential Care II • What are the differences compared to Custom Care II • No waiver of premium for HHC • Maximum 80% ACLF Benefit • No 1 day = 7 for HHC in Elimination Period • No Care Advisory Services or Stay at Home Benefit • Respite not paid during Elimination Period • Bed Hold Benefit 21 calendar days per year for hospitalizations • No Double Accident Benefit or Return of Premium prior to age 65 • And, limited rider options keep it simple • SharedCare • Nonforfeiture

45. Custom Care II Summary of Changes • Custom Care benefits as a foundation • Building additional benefits for the growing younger consumer • Double Accident Benefit prior to age 65 * • Return of Premium prior to age 65 • More Inflation Options • Enhanced Guaranteed Purchase Option • 5/3% Compound Inflation ** *Not available with Lifetime Benefit Period ** 5/3% Compound Inflation may accelerate the usage of the Benefit Period

46. Custom Care II Summary of Changes • Higher % Partner Discounts • 15% Partner • 30% both partners apply & are approved • Addition of Enhanced Return of Premium Rider • Extends built-in coverage beyond age 65 • Modifications to existing features • Expanded Shared Care Rider to 10/10 years • Additional Cash Benefit Cap Removed • International Coverage 100% for 1 year • Replaced Upgrade Privilege with Loyalty Credit • Eliminated Partner Home Care Rider

47. Marketing the New Custom Care II Portfolio

48. Marketing Themes • Buy “today benefits” – you may need services younger than you thought • 40 % of those receiving long-term care services are adults between age 18 and 64 • “Where Does the Population Live and Who Cares for Them? LTC: Diverse, Growing Population Includes Millions of Americans of all Ages.” U.S. General Accounting Office, January 2001 • Why selling higher daily/monthly benefits for “today” may be in the interests of potential policyholders

49. Marketing Themes • Consider alternatives to the traditional “Lifetime and Compound inflation combo” below age 65 – Sales ideas to support: • Consider price trade offs • Benefit amount of access vs. today and future pool • What is an appropriate benefit period? 10 Year and 10/10 Shared Care • The average length of need for LTC stay is 2.6 years * • Only 11.4% of John Hancock’s claims are expected to exceed a 6 year benefit period * • Only 2.5% are expected to exceed 10 years * • John Hancock Statistical Analysis 2003 • Consider alternatives to traditional Inflation options – 5/3% Inflation • The Consumer Price Index for overall inflation rose 1.6% in 2002 • 2.3% average for the past five years • 2.5% average for the past ten years • U.S. Department of Labor Bureau of Labor Statistics, Bureau of Labor Statistics Data, 2003

50. LTCI Decision Process:Points for Consideration Decision Matrix • Do I have adequate LTCI Benefit Amounts? • Am I covered for an appropriate amount of time? • Are the effects of inflation covered? • Am I covered for today, as well as tomorrow?