Illustration tips

Show your clients the various ways IUL can work to help them choose the one that will best meet their goals. Here are some options.1

Death Benefit Option (DBO) switching

By electing a DBO switch after the premium-payment period, you are switching from increasing death benefit coverage to leveling death benefit coverage.

Benefits: Maximizes the premium put into the product, while reducing the COI charges incurred after the premium-payment period.


Pro Tip: Select “Optimal” switch year to further increase the policy performance. 


Male, 45, Accumulation IUL, Best Class, $25K for 20 years, Min Non-MEC DB, Option 2 DB switching to Option 1 in optimal year, 6.12% assumed rate in the Capped Account. The data shown is taken an from illustration. Values are not guaranteed and certain assumptions are subject to change by the insurer. Actual results may be more or less favorable.


Choose the right allocation options2

Benefits: Allows clients to target the upside market potential they want according to their goals and risk tolerance, without subjecting to material downside risk. Because of this downside protection, policy performance can be more predictable in a volatile market.


*Enhanced Capped and Enhanced High Capped can generate higher interest credit potential. But at the same time they are more risky as they have an additional 5% Indexed Performance Charge when used. We encourage you to understand the risk and return profile of these accounts before using.

**Base Capped, Base High Par, and Select Capped are index account options with no Indexed Performance Charge. By having lower charges these accounts may produce less volatile returns. We encourage you to understand the risk and return profile of these accounts before using.


Pro Tip: If you are benchmarking among carriers using 5% or 6%, Capped Indexed or the Enhanced Capped Indexed accounts are the most appropriate. If you benchmarking among carriers using AG49 rate, High Capped Indexed or Enhanced High Capped Indexed accounts are more appropriate.


Reduce face to maximize income

By electing “reduce face to maximize income,” you will reduce the death benefit coverage provided through the insurance policy.

Benefit: Further reduces COI charges after the premium payment period. This selection is a powerful way to minimize the COI charges over the lifetime of the policy and can be used in conjunction with DBO switch.


Higher Income potential when face amount is reduced

Pro Tip: This feature is particularly useful when trying to increase cash accumulation over time or maximizing distribution from the policy.

Male, 45, Accumulation IUL, Best Class, paying $100K for 5 years, Min Non MEC DB, Option 2 DB switching to Option 1 in optimal year, 6.05% assumed rate in the Capped Account, income from 16-35. The data shown is taken an from illustration. Values are not guaranteed and certain assumptions are subject to change by the insurer. Actual results may be more or less favorable.


Illustrating loans3

Loans are effective ways to distribute the policy value accumulated within the insurance policy. When electing loans, you can choose from multiple loan types. Different loan types will result in different product performance—try toggling with the various loan types to see how policy performance might change.4


  • Standard loans are the most popular options. Compared to index loans, standard loans provide more modest returns over time as they are less risky. That is, the loaned amount is no longer participating in the equity market. This loan type is more appropriate for those who prefer less risk in their portfolio during their retirement years.
  • Index loans are the preferred option for those who have a higher-risk tolerance. When index loans are used, policyholders will continue to take full advantage of the equity market on both loaned and unloaned portion of the policy value. As a result, index loans can provide more income potential than standard loans over time. However, because the equity market is volatile, index loans carry significantly more risks. Depending on equity market performance, the income potential from index loans can have more variability.
  • And with John Hancock’s newly introduced fixed index loan, Accumulation IUL policyholders can now access the cash within their policy while participating in the market and only pay a guaranteed loan charge rate of 5%.5

Pro Tip: If you are taking loans during the first 15 years of the policy, consider choosing “Loan To Cap & Switch To Withdrawals” instead of “withdrawal to basis then switch to loan”. This may lead to higher income potential.


Minimize face/maximize income default

John Hancock has created a drop-down box that will help you pre-populate all the key fields for an illustration that may provide the highest income potential.

Benefit: Saves you a lot of time!


Pro Tip: When you elect “Min Face/Max Income”, we will automatically adjust the following settings: Death Benefit Option 2 with optimal switch, reduce face to maximize income, monthly distribution, solve for $1 at lifetime, 100% allocation in the Enhanced High Capped Indexed Account, Fixed Index Loan, and Loan throughout.


Additional resources


For more information about Indexed UL, contact us 888-266-7498, option 2 or fill out the form below.

1. Please have your clients consult with their professional advisors to find the insurance policy type and design that is most suitable for their needs.

2. The Index Account options may not be available on all products or in all jurisdictions. The Base Index Account options (Base Capped Index Account and Base High Par Index Account) are the only index account options available for new policies issued in New York. Please consult each product’s producer guide for index account availability.

3. Loans and withdrawals will reduce the death benefit and 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 59½. Withdrawals are available after the first policy year. Index loans and Fixed indexed loans are available after the third policy year.

4.  The cost of an index loan can vary substantially compared to that of a standard loan and the risk of policy lapse is greater than it would be with a standard loan.

5. Guaranteed product features are dependent upon minimum premium requirements and the claims-paying ability of the issuer.

For John Hancock IUL products, only one type of policy loan may be utilized at a given time. If there is an outstanding loan, and the policy owner wishes to take a loan under a different Loan Option, the policyholder must either repay the existing loan, or request a loan option change as described in the policy.

Standard loan requests in excess of the Fixed Account balance can be taken from the Indexed Accounts. Amounts borrowed from the Indexed Accounts will be transferred to the Loan Account at Segment maturity. Index loan and Fixed Index Loan requests in excess of the Index Appreciation Account will be secured by balances transferred from the Fixed Account to a Loan Account. See the applicable John Hancock IUL policy contract for more information.

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. Hang Seng Index®is a trademark of Hang Seng Data Services Limited. John Hancock has been licensed to use the trademarks of S&P and Hang Seng Index (collectively, the "Indices"). Products are not sponsored, endorsed, sold or promoted by the licensors of the indices and they make no representation regarding the advisability of purchasing Products. You cannot invest directly in the Indices.