Fitch: AA- (Very Strong)
These rating agencies provide their opinions on an insurer’s ability to meet its obligations to its policyholders. All of John Hancock’s financial strength ratings are considered investment grade, which is an important consideration when choosing a life insurance company.
John Hancock is also an A+ accredited business with the Better Business Bureau since 1996, which is the BBB’s highest rating. While no company can get it right 100% of the time, John Hancock has demonstrated that negative customer experiences are the exception rather than the rule.
How Does John Hancock Works With its Customers?
John Hancock has evolved since its founding into more than just life insurance. Often John Hancock’s life insurance products are usually sold by financial professionals or independent life insurance brokers. Financial professionals typically can sell securities, like mutual funds and variable annuities, in addition to traditional life insurance.
This approach to doing business may suit people looking for a more comprehensive service that includes investments and financial planning. However, it does have some drawbacks. A financial professional who is more of a generalist may not have the broader industry expertise that a broker who solely focuses on life insurance may have.
If you are strictly looking for life insurance, we would suggest working with an independent broker who specializes in life and health products. Independent brokers don’t work for any insurance company. They work with insurance companies to find you the best deal period! Additionally, since their focus is strictly life insurance, independent brokers can compare the marketplace to ensure you are matched with the best company.
John Hancock Life Insurance Options
John Hancock offers various life insurance, annuities, and investment options. For the scope of this review, we are going to solely focus on John Hancock’s term life insurance and permanent life insurance options.
John Hancock offers some unique underwriting. For starters, John Hancock has their own proprietary underwriting manual just on coronary artery disease, which is traditionally more aggressive than the industry average.
John Hancock also is friendly to tobacco users. John Hancock may consider moderate cigar and chewing tobacco usage for non-tobacco rates. John Hancock also has a “quit smoking incentive” that offers cigarette users non-tobacco rates during the first 3 years of their policy.
In order to maintain non-tobacco rates beyond year 3, you must complete and sign a tobacco usage supplement stating that you have quit smoking for a minimum duration of 12 months with a clear urinalysis certifying that you are smoke-free.
While John Hancock has accelerated underwriting for qualified applicants, this is not true no-exam life insurance underwriting.
Term Life Insurance Coverage
Term life insurance is temporary. Term life insurance was created as a way to affordably secure high death benefit amounts for temporary needs, such as income replacement and mortgage protection.
Term life is the most straightforward type of life insurance you can buy. There is usually no cash surrender value. Simply put, you pay the premium, and if you pass away while the contract is active, the life insurance company pays the death benefit.
John Hancock offers their Term Series as a solution for temporary life insurance needs. John Hancock’s term can be purchased in 10-year, 15-year, or 20-year guaranteed level-premium periods. After the stated term, your premiums will increase year-to-year as illustrated in the contract.
John Hancock’s term policies are convertible to one of their permanent policies available during the time of conversion. This is a valuable feature that offers excellent flexibility in the future. This guarantees that you will have a coverage option available if your health excludes you from life insurance coverage otherwise.
John Hancock also includes the terminal illness rider at no additional premium within their policy. This rider allows the owner to accelerate a portion of the death benefits if they are terminally ill.
While a nice feature to have, there are better living benefit options available which include critical and chronic illness with competitors. If you want to include more robust protections within your life insurance contract, check out our Ameritas Life Insurance and Living Benefits review.
One exciting term life insurance option that John Hancock offers is their vitality program. The vitality program is an incentive program that encourages policyholders to live a healthy lifestyle in exchange for discounted policy premiums. The healthier you are, the more you save.
The John Hancock Vitality program offers a number of perks outside of reliable death benefit protection such as:
Survivorship life insurance, also known as joint-life policies, is a niche product that is usually used in estate planning strategies. These second-to-die policies cover two lives at one time. After the death of the second insured, the life insurance policy pays the death benefit to your heirs!
Second-to-die policies come in handy for families that need to leave a liquid estate; for example, to care for a special-needs child. Survivorship policies are also great for people who have illiquid estates with a majority of the family wealth in hard assets like rental properties, farmland, or family businesses who want liquidity to pay estate and inheritance taxes.
The John Hancock survivorship life insurance policy allows the potential for cash accumulation with either indexed strategies or a fixed interest account. Index strategies are an alternative for people who want to limit their equity exposure due to its downside protection of principal.
The cash value allows additional flexibilities. If plans change later in life, you can access the cash value within the policies through withdrawals and tax-advantaged loans. This gives the policy the flexibility to be used as a source of income.
Variable Universal Life
Variable universal life insurance provides death benefit protection with the potential to build cash value within the policy. Like most universal life insurance policies, variable universal life insurance allows flexible premium payments. The main feature of variable universal life insurance is that a portion of your premiums is invested in mutual-fund-like subaccounts.
These sub-accounts generally offer a range of investment options with different levels of risk. Usually, you have a choice of equity, fixed income, and sometimes alternative investment strategies.
Since variable universal life insurance is a security, they are issued with a prospectus and contain varying levels of investment risk to your cash value. Unlike indexed universal life insurance, your principal can be lost due to poor investment performance.
Variable life insurance can be complicated and should be thoroughly reviewed before purchasing. Some policies are designed primarily for the death benefit, and other policies can be designed to maximize cash value growth. Before you move forward with a variable life insurance purchase, consult with a trustworthy and knowledgeable agent to be sure that the policy you are considering is suitable for your situation.
Key benefits of universal life insurance
Originally published at goodlifeprotection.com on January 7, 2019.