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John Hancock Long Term Care Insurance Launches First Family Benefit

Monday April 1, 2002 10:13 am Eastern Time

SOURCE: John Hancock Life Insurance Company

Family CareBenefit allows up to 4 extended family members to be covered on a policy -- Increases chance that benefits would be used from 44% to 90%

BOSTON, April 1 -- John Hancock Life Insurance Company today introduced the industry's first long-term care insurance policy with a benefit that allows up to four extended family members to be covered by the same policy.

The FamilyCare Benefit, available on Hancock's new comprehensive long-term care insurance policy, allows families to purchase a single policy with one pool of benefits that can be used by whichever family members need them.

'`Long-term care is a deeply emotional family issue,'' said Michele Van Leer, senior vice president, Retail Product Management. ``Long-term care is difficult for those receiving care, and it can be stressful for caregivers, especially relatives. Our new product helps generations to work together to face the issue.''

Any member of an extended family aged 18-79, such as partners/spouses, children, parents, siblings, grandparents, grandchildren, step-parents, step- children and in-laws, can be included on the policy.

For example, adult children could buy a policy and include their parents so that they would be covered should they need long-term care. Alternatively, parents could include children on the policy so that if ultimately the parents didn't use any or all of the benefits, they would be left for the children.

Hancock developed the benefit and its new policies using feedback from focus groups conducted around the country over a two-year period to determine what concerns people had about long-term care. Baby Boomers tended to be very concerned about their parents' need for long-term care, but had no idea about how to bring up the subject.

``We heard that people need help talking to their parents about this issue. We designed the FamilyCare Benefit to act as a door opener for adult children to begin the discussion. We hope the shared policy idea makes the topic less threatening and helps bring the family together to deal with this very difficult issue,'' said Van Leer.

Another concern consumers have about long-term care insurance is that they may be buying a policy that in the end they may not use. ``In fact, we estimate the FamilyCare Benefit increases the chance benefits would be used from 44 percent with a single policyholder to 90 percent with four family members,'' said Van Leer.

The cost of the policy is determined by a formula relating to the ages of the family members at the time they sign up for the policy. In addition to increasing the chance of use, using the FamilyCare. Benefit may also be a less expensive alternative to purchasing multiple individual policies.

Custom Care

The ground-breaking Family Care Benefit is available as part of Hancock's comprehensive long-term care policy, also introduced today. Called Custom Care, the policy expands on Hancock's most recent policy by including more benefits that address family concerns such as receiving care at home and relieving the family caregiver burden.

These benefits, some of which had been available as optional features, have been integrated into the policy.

  • monthly benefit option helps to cover more home health care by not capping the amount of benefits used in a single day which is useful because home care is not always delivered evenly throughout a month
  • stay at home benefit -- helps people stay at home by providing for a variety of long-term care services not usually covered by insurance such as home modifications, prescription drugs or transportation to medical appointments
  • benefits for care when provided by licensed family member -- helps relieve some of the financial burden of family
  • one day of home care counts as 7 days toward the elimination period -- helps insureds tap into benefits sooner

``We found that most of our customers consistently selected these features and viewed them as vital, and so we decided to include them in the base policy,'' said Van Leer. ``We've also included optional riders for customers who want a customized, top-of-the-line solution.''

Custom Care's new optional features include:
-- a zero-day elimination period for home care so benefits are payable as soon as care is needed
--partner home care coverage that allows benefits to cover uninsured partner's home care if that care is provided by same caregiver during the same visit as care received by insured partner
-- an additional cash benefit -- a separate pool of funds that assists in staying at home

Other improvements in coverage include:
--increased international coverage, now covers all countries
--expanded partner definition and discounts
--expanded preferred underwriting discount
--nearly tripled the bed hold benefit, which reserves your spot in a facility up to 60 days

Essential Care

Hancock also is introducing a basic long-term care insurance policy called Essential Care. Essential Care provides solid long-term care protection without added costs associated with specialized features. This policy is designed to provide valuable coverage to price sensitive consumers and to those who plan on self-insuring for long-term care, but want some added protection.

``This suite of products allows us to offer insurance that covers the spectrum of consumer long-term care needs, keeping in mind their desire to stay at home when they need care, have access to the highest quality care, and to some degree relieve the family's burden,'' said Van Leer.

Both policies are available through Hancock's career agents and brokers as well as through independent brokers, broker/dealers and banks that sell Hancock products.

John Hancock Financial Services, Inc. (NYSE: JHF - news) and its affiliated companies, including John Hancock Life Insurance Company, provide a broad array of insurance and investment products and services to retail and institutional customers. As of December 31, 2001, John Hancock and its subsidiaries had total assets under management of $124.2 billion.

John Hancock Life Insurance Company, Boston, MA 02117