Premier Benefit IUL
Introduction
Premier Benefit IUL insurance is offered through your workplace using a streamlined, fully digital application and policy issue process with streamlined underwriting.1 If you have questions concerning the product or the process, you can contact the Servicing Agent or our Servicing Office. The information provided to you by John Hancock or the Servicing Agent is not intended to be insurance or investment advice or a recommendation to purchase Premier Benefit IUL. In considering whether Premier Benefit IUL is right for you, you should carefully review the information made available on this page and the other materials provided and should consult with a financial professional as needed.
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Overview of Universal Life Insurance
Universal life insurance is a form of permanent, cash value life insurance that provides a death benefit for beneficiaries if the insured person dies while the policy is in force, as well as lifetime access to the policy’s cash value. In addition, universal life insurance policies may provide additional benefits by way of policy “riders.”
One advantage of universal life insurance is premium payment flexibility, allowing the policy owner to vary the amount and frequency of payments. The policy is issued with a “planned premium” amount, but the owner can change the amount of the premium as long as the premium is not in excess of IRS guidelines and the cash value in the policy is sufficient to cover the policy’s monthly deductions and other charges.
The cash value under a universal life insurance policy is allocated by the insurance company to one or more accounts that the owner selects. If more than one account is offered, the accounts will credit interest at different rates determined by the company in accordance with the policy provisions. The account options may present different levels of risk and potential return that the policy owner will need to consider in light of their personal circumstances.
Universal life insurance policies provide for certain values that are determined at the time the policy is issued and are guaranteed not to change over the life of the policy. Other values are not guaranteed and these may change from time to time in response to actions that the owner or insured person takes, changes that the insurer makes, or changes to the interest rates credited to the cash value. To help understand how these non-guaranteed elements may impact the values under the policy, the applicant is provided with a policy illustration at the time of the policy application and during the lifetime of the policy as requested.
Universal life insurance policies can offer significant tax advantages, including death benefits that are generally not subject to income tax and tax-deferred cash value growth during the life of the policy.2
Features and Benefits of Premier Benefit IUL
Death Benefit
Face Amount
When you apply for the Premier Benefit IUL policy you may be asked to indicate on the application the “face amount” option that you are applying for. The face amount of the policy is the dollar amount of the death benefit that would be paid to your beneficiary(ies) if you die while the policy is in force. If there are outstanding loans, or if you have received accelerated benefit amounts pursuant to a policy rider, those will be deducted from the death benefit.
After the first policy year, you may request that we reduce the face amount of your policy, provided that your policy maintains a minimum face amount of $50,000. Face amount decreases can only be made in minimum amounts of $50,000. If a face amount decrease occurs with the policy’s 10-year surrender charge period and the amount of the decrease exceeds 10 percent of the initial face amount, you will be charged a pro-rata surrender charge.
Death Benefit Protection
Over the life of the policy, payment of the planned premium or other amount of premium that you pay may not be enough to maintain the cash value at a level to keep the policy in force under all conditions. To help protect you against this risk, Premier Benefit IUL offers the Death Benefit Protection feature. As long as the Death Benefit Protection feature is in effect, your policy cannot lapse even if the cash value falls to zero or below, provided that an alternative reference value, the ”Death Benefit Protection Value,” is greater than zero.
The Death Benefit Protection Value is a reference value that is only used to determine whether the Death Benefit Protection feature will stay in effect. The policy owner cannot access this reference value. The Death Benefit Protection Value is determined similarly to the cash value but uses different values for interest and policy charges. Like the cash value, the Death Benefit Protection Value is also affected by the amounts and timing of premiums paid, and for the Death Benefit Protection feature to remain in effect it is important that premium payments are made when they are due. Withdrawals, rider termination or changes and face amount decreases will also affect the Death Benefit Protection feature. If a policy loan is outstanding, the Death Benefit Protection feature will not prevent your policy from lapsing if the cash value amount after deducting the loan amount is zero.3
Please carefully review the illustration accompanying your policy to see how your policy may be expected to perform over time, including the operation of the Death Benefit Protection feature. You are also encouraged to request an in-force illustration from time to time to see how changes over time may have impacted your policy.
Cash Value
To the extent that the premium payments you make, together with interest credits under the policy, exceed the cost of insurance and other charges, your policy will generate a cash value that will remain in the policy and be allocated to the account you select. Prior to termination of the policy, you may access the cash value through a loan or partial withdrawal or upon a complete surrender of the policy. A surrender charge may apply to withdrawals or surrenders within the first ten policy years.
Allocation of Cash Value
Premier Benefit IUL allows you to allocate your policy’s cash value between two accounts – the Fixed Account and the Indexed Account. The premiums you pay and your policy’s cash value will be maintained in the Fixed Account unless you direct us to allocate them to the Indexed Account. You have the option to have a set dollar amount or a percentage of your cash value to be transferred each month from the Fixed Account to the Indexed Account. You can make this election at the time of your application and also after the policy is issued by contacting us at our Servicing Office.
The interest credited to your policy’s cash value can have a significant impact on the performance of your policy over time, including whether you will need to pay additional premium to maintain your coverage in effect. You may want to consult with a financial professional to decide the allocation option that is best for you.
Please carefully review the illustration accompanying your policy to see how your policy may be expected to perform over time. You are also encouraged to request an in-force illustration from time to time to see how changes over time may have impacted your policy.
Fixed Account
The Fixed Account credits interest daily at a current rate declared by us. (The current rate will never be less than 1 percent.) The Fixed Account is not linked to the performance of an index and thus is likely to experience lower volatility than the Indexed Account. On the other hand, the long-term performance of the Fixed Account could be expected to be lower than the Indexed Account.
Indexed Account
The Indexed Account currently offered under the policy is the Base Capped Indexed Account. The interest credited to amounts allocated to the Indexed Account tracks the performance of a designated index over a one-year period from the Segment Initiation Date to the Segment Maturity Date, excluding dividends, adjusted by parameters including a Segment Floor Rate, Segment Cap Rate and Participation Rate. The policy does not directly participate in any stock or equity investments. The index currently offered is the S&P 500 Composite Stock Price Index,4 which tracks 500 large-cap common stocks actively traded in the United States.
The Segment Cap Rate limits the rate that is used in calculating the Index Segment Interest Credit – if the positive index change multiplied by the Participation Rate results in a rate that is higher than the Segment Cap Rate, the Index Segment Interest Credit will be the Segment Cap Rate. If the positive index change multiplied by the Participation Rate is less than the Segment Cap Rate but greater than the Segment Floor Rate, we will use the index change multiplied by the Participation Rate to determine the Index Segment Interest Credit. If the index change is less than the Floor Rate, the Index Segment Interest Credit would be the Floor Rate.
The Segment Floor Rate is guaranteed not to be below 0%. The Segment Cap Rate and Participation Rate can be changed by John Hancock from time to time for any segment created after the date of the change. These changes may affect the performance of your policy and you may need to make additional premium payments in order to keep your policy in force. The current Segment Cap Rate and Participation Rate are available by contacting our Servicing Office.
The Indexed Account could be expected in the long term to perform better than the Fixed Account, but with a greater degree of volatility. There is risk as the performance of the underlying index may result in low segment interest credits that could require increase in premium payments in order to the keep the policy in force.
We reserve the right to add or cease offering the Indexed Account at any time. We also reserve the right to substitute an index with another index for any reason.
Policy Value Credit, Asset Bonus and Persistency Bonus
Policy Value Credit
On a monthly basis, a Policy Value Credit will be applied to the cash value in an amount based on the face amount of your policy, the cash value at the time the credit is calculated, and a formula of values described in your policy. This credit is designed to help improve the long-term performance of your policy and is affected by the amounts and timing of the premiums that you pay into the policy, how well the indexed account performs, withdrawals, and other changes you make to the policy.
Asset Bonus
Beginning in policy year 11, an Asset Bonus will be added to any interest due to the Fixed Account and interest earned on Indexed Account segments. The Asset Bonus varies by sex, risk class, and the duration of the policy and equals lesser of the Asset Bonus Annual Rate for that year and the Face Amount divided by policy value (excluding loans). The applicable Asset Bonus Annual Rates are shown in the policy.
Persistency Bonus
Beginning in policy year 11, a non-guaranteed persistency bonus may be applied to any unloaned amounts of your policy value allocated to the Fixed Account and indexed Account holding segments. You can contact the Servicing Office to learn the current rates for the Persistency Bonus %.
Loans, Partial Withdrawals and Surrenders
Prior to the termination of the policy, you can access the cash value through a loan or a partial withdrawal or upon a complete surrender of the policy.5
Loans
Owners of the Premier Benefit IUL policy can choose between two types of policy loans – the standard loan and the indexed loan. Indexed loans are available only after the third policy year. The minimum loan amount is $500. Any outstanding loan amounts are deducted from the death benefit payable under the policy.
With a standard loan, the amount of the loan is taken from the Fixed Account and a loan account is established. Interest is charged on the policy loan at the interest rate specified in the policy, and interest is credited to the loan account that is established. The difference between the loan interest charged and the loan account interest credited is the net cost of the loan. The net cost of the loan is guaranteed to be no greater than 1.25% in policy years 1-10 and no greater than 0.25% after year 10.
Under an indexed loan, loan proceeds are secured to the extent possible by amounts that you have in the Indexed Account. Interest is charged on the policy loan at the interest charged rate provided in the policy, and interest is credited to the portions of the loan secured by the Indexed Account at the rates determined for your Indexed Account segments. Unlike the standard loan, however, there is no guarantee of the net cost of an indexed loan, and so the cost of an indexed loan can vary more substantially than it could for a standard loan. For example, an indexed loan with a loan charged rate of 5% and Indexed Account interest of 0% would result in a net loan cost of 5% -- much higher than the cost of a standard loan. Conversely, a loan charged rate of 5% and Indexed Account interest of 10% would result in a net gain of 5% to the policy. The choice of a standard loan or an indexed loan can have a significant effect on the net cost of a loan and your policy value, and the risk of policy lapse with an indexed loan is greater than it would be with a standard loan.
Partial Withdrawals
After the first policy year, if there is a positive cash value in your policy after the policy’s surrender charge, you may request to take partial surrenders. The minimum partial surrender amount is $500. Partial surrenders will be deducted from the Fixed Account and Indexed Account in the manner specified in the policy and may impact your ability to establish new segments in the Indexed Account. Please refer to the attached sample policy for the complete policy terms.
If a partial withdrawal results in a face amount decrease during the first ten policy years, a pro-rata surrender charge may apply.
Surrenders
You may surrender your policy in full at any time and receive the policy’s net cash surrender value. If you have allocated amounts to the Indexed Account, you will not receive any interest on amounts that are in segments that have not reached the end of a segment period.
A surrender charge is deducted in the event of a full policy surrender in the first ten policy years.
Supplemental Benefit “Riders”
Long-Term Care Insurance Rider
If available through your employer, you may be asked in your application whether you want to apply for optional rider coverage for long-term care needs. A separate charge is deducted if this rider is selected. More information about this rider is available on the first page of the application.
Accelerated Benefit Rider
Under this rider, if you should become terminally ill with a life expectancy of one year or less, you may elect to receive 50% of the eligible death benefit to a maximum of $1,000,000. The remaining death benefit is reduced by one year’s interest at current loan rates on the benefit paid, plus an administrative expense charge.
Accelerated benefits may be taxable under current tax law. You should consult your personal tax professional regarding the tax implications of benefits received under the Accelerated Benefit rider.
Cash Value Enhancement Rider
The Cash Value Enhancement rider enhances the cash surrender value during the 10-year surrender charge period. While this rider is in effect, the cash surrender value is equal to the cash value less the surrender charge plus the Cash Value Enhancement benefit. Conditions apply, including that the surrender cannot be done with the intention of exchanging the policy under IRC Section 1035.
There is an additional charge for this rider in the amount of 2% of premiums paid in policy years 1-10.
Healthy Engagement Rider (John Hancock Vitality PLUS)
The Healthy Engagement rider provides the opportunity each year, beginning in policy year 2, to apply a rider credit to your cash value based on the status level that you achieve. There are four status levels – Bronze, Silver, Gold and Platinum. The achievement of a status other than Bronze is dependent upon meeting certain status qualification requirements in each year. The formula for determining rider credits and the status qualification requirements are described in the policy. The John Hancock Vitality PLUS rider has a fee of $2 per month and can be discontinued at any time.
Premiums
One of the benefits of Premier Benefit IUL is premium payment flexibility, allowing you to vary the amount and frequency of your premiums as long as the amount you pay, less premium charges, and interest amounts credited to your policy are sufficient to cover the monthly deductions and other charges and are not in excess of IRS guidelines.
Planned Premium
In the application, you are asked to select whether you want to continue to pay premiums under the policy to age 65 or for your lifetime (to age 121). This is to allow us to calculate the policy’s planned premium amount. If your primary concern is lifetime death benefit protection at a lower regular planned premium amount, you may want to select premium payments up to age 121, but if you want to have a fully funded policy by the time you retire, you may want to select premium payments up to age 65, which will increase your regular planned premium payment amount. After your policy is issued, you can change your planned premium amount by contacting our Servicing Office.
Your policy will be issued with the initial planned premium amount. This planned premium amount will be calculated on the basis of the risk class you are assigned after underwriting (Preferred or Standard), the policy coverage or face amount that you’ve selected, and other benefits included in the policy riders.
Please note that payment of the planned premium amount does not guarantee that your coverage will continue under all conditions. Actions you take can affect your policy and the premiums required to maintain your coverage in force. These include your allocation of cash value between the Fixed Account and the Indexed Account and the interest credits applied to those accounts; any loans, withdrawals, or material changes that you make to your policy; and achieving or not achieving a certain status level in regard to the policy’s Healthy Engagement benefit (John Hancock Vitality). In addition, changes that we may make to the policy’s non-guaranteed elements, such as changes to policy charges (not in excess of the maximum charges) can adversely affect policy performance and require additional premium payments.
Please carefully review the illustration accompanying your policy to see how changes in various assumptions might impact the performance of your policy over time. You also are encouraged to request an in-force illustration from time to time from our Servicing Office to see how changes over time may have impacted your policy.
Policy Charges
Premium Charge
A premium charge of 35.0% is deducted from each premium in years 1-10. In years 11+, the charge is 32.0%.
Face Amount Charge
The Face Amount Charge is a monthly charge that is a rate per $1,000 of face amount and which primarily helps cover sales costs. To determine the charge we multiply the amount of face amount at issue by a rate that varies by your sex, age and risk classification at issue. The Face Amount Charge applicable to your policy is shown on your policy specifications page.
Administrative Charge
A monthly charge to help cover our administrative costs. This is a flat dollar charge of $15 per month that will cease at and after you reach age 121.
Cost of Insurance Charge
A monthly charge for the cost of insurance and includes the cost of insurance for any supplementary benefit rider that has a cost of insurance charge. The cost of insurance charges will cease at and after the insured person reaches age 121. We may adjust the Cost of Insurance Rates at any time based on our expectations of future experience including mortality, persistency, investment earnings, expenses, taxes, reserve and capital requirements, and reinsurance costs. These rates, however, will never exceed the corresponding Maximum Monthly Cost of Insurance Rates shown in your policy.
Advance Contribution Charge
An advance contribution charge is assessed on each monthly processing date when the cumulative premiums paid exceed the advance contribution limit times the policy year. The rate of this charge varies by issue age, sex, risk class and duration. The advance contribution charge limit and rate will be shown in the policy.
Surrender Charge
A surrender charge is deducted in the event of a full policy surrender in the first ten policy years. A surrender charge on a pro-rata basis will be charged for a partial withdrawal that results in a face amount decrease. The amount of the surrender charge varies by issue age, sex, face amount, premiums paid and duration. The surrender charge grades down monthly over 10 years and is 0% in years 11 and after. The surrender charge will be shown in the policy.
Rider Charges
There are additional charges if you elect the Long-Term Care rider, Cash Value Enhancement rider or Healthy Engagement rider. These rider charges are described above in the Supplement Benefit “Riders” section.
Other Important Information
Beneficiary(ies)
Upon your death, the death benefit (minus loans, charges and accelerated benefits) will be paid to the beneficiary(ies) that you have identified in your application or have otherwise placed on file with us in accordance with the policy terms. You may change your beneficiary designation by filing the change with our Servicing Office.
Taxation of Life Insurance
This policy is intended to comply with the definition of a “life insurance contract” set forth in the federal income tax laws so that, notwithstanding any other provisions of the policy to the contrary, it will be considered as life insurance for federal income tax purposes. You should consult your personal tax professional regarding the tax implications of life insurance.
Strength. Stability. John Hancock.
John Hancock is among the highest-rated companies for financial strength and stability6 as demonstrated by its A+ rating from A.M. Best. Financial strength ratings are a comprehensive measure of a company’s financial strength and stability, and are important as they reflect a life insurance company’s ability to pay claims in the future. With over 160 years of experience, John Hancock offers customers a diverse range of insurance products and services through its extensive network of employees, agents, and distribution partners.
1. Policy issuance is not guaranteed as any life insurance purchase is subject to completion of an application, which may include health questions, and underwriting approval. John Hancock may obtain additional information, including medical records, to evaluate the application for insurance; and after the policy is issued, to identify any misrepresentation in the application.
2. Life insurance death benefit proceeds are generally excludable from the beneficiary’s gross income for income tax purposes. There are a few exceptions such as when a life insurance policy has been transferred for valuable consideration. Comments on taxation are based on John Hancock’s understanding of current tax law, which is subject to change. No legal, tax or accounting advice can be given by John Hancock, its agents, employees or licensed agents. Prospective purchasers should consult their tax professional for details.
3. Policyholders who pay only the minimum premium required to keep the Death Benefit Protection in effect may forego the advantage of building significant cash value in this policy. The no-lapse guarantee under the Death Benefit Protection has a maximum duration to age 121. The duration of the no-lapse guarantee coverage may be less, depending upon the funding level chosen by the policy owner. The NLG duration is stated in the contract and reflected in the illustration’s guaranteed net death benefit column. At the end of the NLG duration, premiums greater than those originally illustrated may be required to maintain coverage. Factors such as, but not limited to, the amount and timing of premium payments, loans, withdrawals, or any other change allowed under the contract could potentially terminate the no-lapse guarantee. Once terminated, the Death Benefit Protection feature cannot be reinstated.
4. Standard & Poor’s®, S&P®, S&P 500®, Standard & Poor’s 500 and 500 are trademarks of Standard and Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. John Hancock has been licensed to use the trademarks of S&P index. The Product is not sponsored, endorsed, sold or promoted by the licensors of the indices and they make no representation regarding the advisability of purchasing the Product. You cannot invest directly in the Indices.
5. Loans and withdrawals will reduce the death benefit and the cash surrender value, and may cause the policy to lapse. Lapse or surrender of a policy with a loan may cause the recognition of taxable income. Withdrawals in excess of the cost basis (premiums paid) will be subject to tax and certain withdrawals within the first 15 years may be subject to recapture tax. Additionally, policies classified as modified endowment contracts may be subject to tax when a loan or withdrawal is made. A federal tax penalty of 10% may also apply if the loan or withdrawal is taken prior to age 59 1/2. Cash value available for loans and withdrawals may be more or less than originally invested.
6. Second highest of 13 ratings (superior ability to meet ongoing insurance obligations). Financial strength rating is current as of March 31, 2023, is subject to change, and applies to John Hancock Life Insurance Company (USA) as a measure of each company’s financial ability to pay claims and to honor any guarantees provided by the contract and any applicable optional riders. These companies have also received additional financial strength ratings from other rating agencies. Financial strength ratings are not an assessment, recommendation, or guarantee of specific products and their investment returns or value, do not apply to individual securities held in any portfolio or the practices of an insurance company, and do not apply to the safety and performance of separate accounts.
Please note: The servicing agent will not provide any recommendation, advice, or opinion as the whether the policy is suitable for your insurance needs. If you have questions about whether this policy is the right option for you, you should review the materials about the policy provided by the servings agent or work with your own financial professional to review the policy’s features, benefits, and risks.
The life insurance policy describes coverage under the policy, exclusions and limitations, what you must do to keep your policy inforce, and what would cause your policy to be discontinued. Please contact a licensed agent or John Hancock for more information, costs, and complete details on coverage.
Insurance policies and/or associated riders and features may not be available in all states.
Guaranteed product features are dependent upon minimum premium requirements and the claims-paying ability of the issuer.
Vitality is the provider of the John Hancock Vitality Program in connection with policies issued by John Hancock.
Insurance products issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02116.
Policy Form Series: ICC23 23PBIUL; 23PBIUL
MLI082423200-1