2006 News Releases

Arrangements Especially Effective In Providing Closely Held Businesses With Liquidity To Transfer Business If Owner Dies Prematurely

Boston – The Advanced Markets unit of John Hancock Life Insurance Company has released a new business continuation concept—the Cross-Endorsement Buy-Sell plan—which combines two well-known concepts, Split Dollar and Buy-Sell planning, to provide all the benefits of a cross-purchase plan, but allows each owner to own the life insurance policy (and its cash value) on his or her life.

As part of the launch of this concept, John Hancock is releasing a new JH Solutions module to fully illustrate the cross-endorsement buy-sell plan and also is releasing marketing materials to complement the illustrations.

“We believe John Hancock is the first company in the industry to bring the Cross-Endorsement Buy-Sell concept to market,” said Randy Zipse, vice president, Advanced Markets. “It is another example of our continually seeking to provide producers and their clients with innovative business continuation concepts as well as the state of the art tools and services to help support their businesses.”

In a normal cross-purchase buy-sell plan, one business owner purchases a life insurance policy on the other owner’s life. At death, the proceeds are used to purchase the business shares from the decedent’s estate, providing a step up in basis. The disadvantage of this approach is that the owners do not own a policy on their own life. If both owners are still alive at retirement, they must transfer the policies back to the respective insureds, which can create tax issues. Also, if there are more than two business owners, each must buy a policy on each of the other owners’ lives, leading to multiple policy purchases.

The Cross-Endorsement Buy-Sell Plan provides the benefits of a cross-purchase plan—the step-up in basis—but avoids the disadvantages.

Because each business owner owns their own policy, they can also use the policy to fund a lifetime buyout of the business due to disability, for retirement income, or estate planning. Even if there are multiple partners, each owner only has to buy one policy.

The new JH Solutions module uses John Hancock’s cutting-edge concept illustration software to enable producers to simply and efficiently create cross-endorsement buy-sell plan proposals for their clients.

“Many closely held businesses fail to make formal plans to transition the business in the event of the premature death of a business owner, the lifetime transfer or sale of the business, or the retirement of one of the key business owners. This is unfortunate because a lack of planning combined with the significant changes brought about by these triggering events can cause a business to fail,” Mr. Zipse said. “With the Cross-Endorsement Buy-Sell Plans, supported by our JH Solutions module, producers can clearly demonstrate to their clients how to avoid that risk.”

JH Solutions uses summaries, flowcharts, and graphs to help producers familiarize clients with the cross-endorsement buy-sell plans on a conceptual level. For clients looking to move forward, the software then enables producers to present the sophisticated data and calculations in an easy-to-understand format illustrating client’s specific situation.

For more information on the concept, or to find out more about getting an illustration, contact your local John Hancock representative or call John Hancock’s Advanced Markets Group at 888-266-7498, Option 3.

The John Hancock Advanced Markets Group is comprised of a highly experienced and knowledgeable team of attorneys, accountants and consultants. They support producers nationwide on the most complex business insurance and estate planning cases with customized case design support and consultation and advanced planning tools.

About John Hancock and Manulife Financial
John Hancock is a wholly-owned subsidiary of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$370 billion (US$332 billion) as at June 30, 2006.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.

The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including universal life insurance, variable life, term life and whole life, as well as college savings products, fixed and variable annuities, long-term care insurance, mutual funds, 401(k) plans and various forms of business insurance.

© 2006 John Hancock Life Insurance Company (U.S.A.), Boston, MA (John Hancock USA). A Manulife Financial Company. All rights reserved.

- 30 -

Contact:
Brian Carmichael
Phone: 617-663-4748
E-Mail: bcarmichael@jhancock.com