Detailed Employee Guide

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.

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.

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.

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.

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 %.

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.

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.

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.

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.

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.

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.

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.

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.

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.

A premium charge of 35.0% is deducted from each premium in years 1-10. In years 11+, the charge is 32.0%.

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.

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.

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.

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.

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.

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.

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.

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.