July 8, 2025

Earlier this year John Hancock released a new policy into the hybrid long term care arena with its new product offering, LifeCare, an indexed universal life insurance policy with long term care benefits. This is a welcome change for John Hancock which until now has only offered LTC benefits as an accelerated death benefit rider on its universal life insurance policies, an option that was problematic for long term care planning with John Hancock as its alternative UL policies do not provide lifetime guaranteed death benefits to the insured. Quite frankly, without lifetime guaranteed benefits John Hancock's alternative "long term care solutions" marketed to consumers are complete non-starters. With this backdrop in mind, this new hybrid LTC policy offered by John Hancock which will provide guaranteed life and LTC benefits to you that you can not outlive is certainly a step in the right direction.

So, John Hancock has moved in the right direction with this new policy, however the most important consideration for you to be aware of with this new LifeCare policy is it is an Indexed Universal Life policy which is markedly different than the alternative leading policies in this space.

A little background to help you to understand the development of this product.

John Hancock is one of the early pioneers of long term care insurance - a history that began almost 40 years ago.  My long term care insurance career began, in fact, at John Hancock almost 30 years ago. Along with Genworth (formerly GE Capital), John Hancock defined traditional long term care insurance planning. Today, John Hancock pays $6 million in LTC claims on a daily basis from the legacy policies on its books. LTC insurance however, is an extreme interest rate sensitive product. With the low interest rate environment from 2004-2019, John Hancock made the decision 10 years ago to exit the traditional LTC insurance space.

Meanwhile, over the past 10 years hybrid long term care policies have taken off, and interest rates have recovered.

John Hancock made the decision that now would be a perfect time to re-enter the marketplace and approached the brokerage distributors to determine if there is room today for another policy.  The answer was a resounding YES! But...!

John Hancock was told - We do not have any more room for one more "cookie cutter" hybrid long term care policy.

Cookie Cutter : The typical hybrid LTC policy in this space sold by Lincoln, NY Life, Securian, Nationwide, Brighthouse, et al. >>> 6 years of benefits, 3% compound inflation protection, death benefit equal to the premium paid.

John Hancock was informed that if you are going to come back, bring us something different than what we have. Otherwise, don't bother.

So, John Hancock asked the brokers what we would like to see that is different, if anything:

The answers were consistent: more meaningful death benefit. If care is not needed, give your policyholders more than just a return of their premium at death. 

And more growth to try to keep up with inflation, and rising home health care costs. Provide opportunity for cash values, death benefits (and resulting monthly LTC benefits) to grow greater than a standard 3% compound annual.

And flexibility. Give us cash indemnity for sure, not reimbursement.

And John Hancock listened. The LifeCare IUL with long term care benefits was born. 

So, what is an IUL (Indexed Universal Life policy)

The hybrid long term care insurance arena predominantly consists of fixed (not Indexed) universal or whole life insurance policies with 100% guaranteed elements. What you see is what you get.  There usually aren't any non-guaranteed elements with the majority of these fixed products.

Generally speaking, with the fixed UL hybrid LTC policies in the marketplace the cash values receive a nominal fixed guaranteed interest rate, and your long-term care benefit pool is typically growing through an optional guaranteed inflation protection factor. Your death benefit is typically minimized to allow you to considerably grow the long-term care benefit pool at a guaranteed basis.

John Hancock LifeCare is different.

Unlike the traditional hybrid LTC plans in the marketplace, John Hancock LifeCare IUL will (attempt to) grow your benefits by utilizing an Indexed chassis.

While the John Hancock LifeCare IUL policy will provide minimum guarantees to you, with this Indexed Universal Life policy we will not be growing your LTC benefits through a fixed guaranteed inflation factor, such as 3% compound annually.

With this IUL policy you will receive annual interest crediting linked to annual returns on stock market indices. Through these annual indexed interest crediting methods, your cash values and death benefit (and correlated LTC benefits) may potentially grow.

You might certainly be attracted to this hybrid LTC option if possible meaningful growth of your life insurance benefit has value for you.

Now, you will need to keep in mind that there are some inherent risks associated with the non-guaranteed crediting methods of Indexed contracts, which I will discuss later.

However, if you are comfortable with the non-guaranteed structure of the Indexed crediting methods, you might be attracted to this John Hancock LifeCare policy.

So, let's take a closer look at the John Hancock LifeCare policy.

Features of the John Hancock LifeCare IUL with LTC Benefits

Issue Ages: 30-75

Risk Classes: Preferred, Standard, and Select Non Smoker; Standard Smoker

Death Benefit: Minimum $50,000, Maximum $500,000

Premium Payment Options: Single Pay, 5 Pay, 10 Pay, 15 Pay

LTC Benefit Growth Options: 

LifeCare Long-Term Care Rider: Option to track performance of up to 3 Indexes: Select Capped Indexed Account, High capped Indexed Account, Barclays Global MA Indexed Account, as well as a Fixed account option.

LifeCare 5% Compound Long-Term Care Inflation Rider (6 year benefit period only)  (no one will ever pick this option, by the way.  It is offered solely due to regulatory requirements, and John Hancock purposefully set its price point to not be an attractive option)

*Growth of Long Term Care Benefits Cease at age 85 with all contracts.

LTC Benefit Period Options

2 year; 24 months acceleration of death benefit for LTC

4 year: 24 months acceleration of death benefit for LTC; plus 24 months additional LTC benefits (best pricing sweet spot, almost everyone will select the 4 year LTC benefit period with this policy)

6 year: 36 months acceleration of death benefit for LTC, plus 36 months additional LTC benefits

Elimination Period: 90 calendar days that begins on the date of the written certification that the insured is chronically ill.

Payment Model: cash indemnity monthly benefits up to the monthly IRS Per Diem Limit amount; Reimbursement model for any qualified LTC expenses that exceed the monthly IRS Per Diem Limit.

International Benefits: Full benefits overseas subject to certification of chronic illness by a licensed US physician.

Streamlined Underwriting: Applications in good order may expect to receive an instant underwriting decision within 5-7 business days. A referral to an underwriter for manual review might be required.

So, what does this policy look like with real life illustrations?

Let's take a look, and let's compare John Hancock with the CareMatters II offerings from Nationwide Financial, which is the top-selling underwriter of fixed hybrid LTC policies today.

John Hancock LifeCare Hybrid LTC Policy Comparisons

Illustrations of benefits for a married Male, age 55,  Single Pay premium of $100,000. Preferred health.

I will state up front that Indexed Universal Life illustrations are not simple and easy for the consumer to understand. There are moving parts that are not guaranteed, and can be adjusted by the insurance company (to your detriment). Thus, the illustrations you will review are hypothetical results based upon non-guaranteed assumptions. That said, I will try to discuss this policy broadly to determine where its advantages can result for you.

Quick overview of the mechanics of Indexed Universal life:

Your policy values will be credited interest on an annual basis linked to the performance of a stock market index, such as the S&P 500. If the index has a positive result on an annual basis, you will receive a portion of the gain subject to an annual capped percentage declared in advance by the insurance company. This annual capped percentage is not guaranteed, and may be changed by the insurance company.  Benefit gains in your contract resulting from positive market performance will be locked in annually.  If the Index is negative in a given year, you do not lose benefits or policy values.

The default John Hancock LifeCare illustration index is the Select Capped Indexed Account and the assumed Segment Growth Rate for illustrative purposes is 5.21%. The annual cap with this indexed account is 8.0%. John Hancock also has a Guaranteed Indexed Account Multiplier factor of 32% as part of the contract.  Thus, with an annual cap of 8.0% and a 32% multiplier, your contract could receive as high as 10.56% interest credited annually.  Now keep in mind if the market is flat or negative on an annual basis your contract receives $0.00. So, an assumption of receiving 5.21% credited all years is about an average and fair assumption based upon these assumed parameters.

So, let's review the resulting benefits for a male age 55, Married, Preferred health with a $100,000 premium deposit.

This will assume the contract terms do not change whatsoever over the life of the policy.

The 4 year LTC benefit period is the best option for this John Hancock LifeCare Policy

John Hancock, Male, age 55, $100,000 Premium, 4 year benefit period, current assumptions

Age Death Benefit LTC Pool Monthly LTC

So, as you can see the benefits look absolutely fantastic based upon current assumptions that do not change. If you deposit $100,000, you would have a death benefit of $500,000+ and a long term care benefit pool of $1,000,000+ at mortality age.

Now let's see how Nationwide numbers look.  For 55 year old men, Nationwide looks best with a 7 year LTC benefit period.

Nationwide CareMatters II Male age 55, Married, $100,000 Premium Deposit, 3% compound Inflation

Age Death Benefit LTC Pool Monthly LTC

You can see here that the Nationwide LTC Pool will be larger than the John Hancock LTC Pool simply because of the function of the 7 year benefit period when compared with the 4 year benefit period.  However, the death benefit for the Nationwide policy does not grow and will be much smaller than the John Hancock policy.  

Now, also keep in mind that the the John Hancock policy is based upon hypothetical assumptions which can change.  And John Hancock will control whether it changes the terms of the contract.  John Hancock can change the declared caps on the Indexed Accounts.  John Hancock could also increase the internal costs of insurance.  Any of these changes at any time will impact your benefits.

So, this is where trying to compare apples and oranges gets murky.

So, I played around with some assumptions. I created an illustration where John Hancock does not change any internal insurance charges, but I reduced the crediting interest rate from 5.21 % in year 1 to 4.71 in year 6, 4.21% in year 11, 3.71% in year 16, and 3.21% in year 21+.

I wanted to see how the contract would behave if John Hancock gradually reduces its declared Select Capped Index segment cap rate as the year go by, which will have a net effect of reducing the average credited interest rate to your contract.

Here would be the John Hancock LifeCare benefits under these hypothetical circumstances.

John Hancock LifeCare decreasing Indexed Segment Cap 

Male age 55, $100,000 Premium, 4 Year LTC Benefit Period

Age Death Benefit LTC Pool Monthly LTC

Well, my quick takeaway here with this hypothetical is that the overall John Hancock LTC benefits are no longer great, at least when compared with the Nationwide CareMatters II guarantees, however the John Hancock death benefit is still much stronger and holding up very well comparatively.

So, you could reach the conclusion that if you feel the death benefit is very important to you, the John Hancock LifeCare policy might be an excellent option, especially if you believe that 3-4 years of LTC benefit are more than enough in your mind.

If you are more concerned with guaranteed LTC benefits, and are especially worried about claims that could last longer than 3-4 years, a policy such as the Nationwide CareMatters II policy with longer LTC benefit periods and guaranteed inflation protection on your LTC coverage might be your best solution.

Here are links to the (3) illustrations discussed above should you want to review them more closely.

John Hancock LifeCare Male age 55 $100,000

Nationwide CareMatters II Male age 55 $100,000

John Hancock LifeCare Male age 55 $100,000 decreasing rate

I also ran this hypothetical exercise for a married female age 55 in good health.

Here would be the numbers for her.

Illustrations of benefits for a married Female, age 55, Single Pay premium of $100,000. Preferred health.

John Hancock LifeCare Current Assumptions

Age Death Benefit LTC Pool Monthly LTC

Once again, the numbers for the John Hancock LifeCare policy at non-guaranteed current assumptions look spectacular.

Here are the Nationwide CareMatters II fully guaranteed numbers.

55 year old married female, $100,000 premium, 3% compound inflation, 7 year benefit period.

Age Death Benefit LTC Pool Monthly LTC

And here are the John Hancock benefits when we reduce the assumed crediting interest: 5.21% year, 4.71% year 6, $4.21% year 11, 3.71% year 16, 3.21% year 21+. Internal insurance charges remain current all years.

John Hancock LifeCare decreasing Indexed Segment Cap 

Female age 55, $100,000 Premium, 4 Year LTC Benefit Period

Age Death Benefit LTC Pool Monthly LTC

So once again for a 55 year old female if I hypothetically decrease the John Hancock LifeCare interest crediting over the years, the LifeCare death benefit still looks strong although the overall long term care pool will not look as strong as a competitor hybrid LTC policy with a longer benefit period such as 6, 7 or 8 years, and guaranteed Lifetime inflation protection that will continue to grow your benefits for Life. John Hancock will cap your LTC growth at age 85.

Here are the complete illustrations for the hypotheticals discussed above for the 55 year old female.

John Hancock LifeCare Female age 55 $100,000

Nationwide CareMatters II Female age 55 $100,000

John Hancock LifeCare Female age 55 $100,000 decreasing credits

Would I recommend the John Hancock LifeCare hybrid LTC policy?

I must say that I am pleasantly surprised with this new John Hancock hybrid LTC policy. It is a marked improvement over its past quasi solution for long term care planning which was to simply add a long term care accelerated death benefit rider to its universal life insurance policies that were marketed without any lifetime guaranteed death benefit whatsoever. John Hancock designed these policies to only carry until average mortality age, so you could actually find yourself in a situation where you could outlive these John Hancock life insurance policies and receive no benefits whatsoever.

With the John Hancock LifeCare IUL, this is not the case. Your life insurance benefit and correlated long term care benefit pool do provide you with minimum guarantees you can not outlive, protecting you from policy lapse. (Although I do find it interesting that John Hancock is not providing any LTC benefit growth after age 85 with this policy, so its is still hedging its morbidity risk with this policy)

Your only issue to think about is are you comfortable with a policy that ties its performance to crediting interest caps that may be changed over time at the sole discretion of the underwriting insurance company?  Additionally, the performance of the policy could also be impacted if the insurance company changes its internal cost of insurance charges.

So, these illustrations that you can review for IUL policies are simply hypotheticals based upon factors that could be better or worse than illustrated. 

I have always believed that for long term care planning, simpler is better.  And guarantees are of paramount importance. So I will be very interested to see if John Hancock is successful with this policy. Undoubtedly, IUL illustrations are very complicated to read and to understand for most consumers. Will this translate well to this market? I do not know.

As an agent, my primary concern is ensuring my clients receive fair value for their premium. When the policies have non-guaranteed elements, I must ask "will the game be changed, and if so, by how much?"

It is not easy to stress test these IUL policies. 

With my interaction with the John Hancock policy software today, I believe ultimately your life insurance benefit with the John Hancock LifeCare policy will be ultra competitive in the hybrid LTC marketplace. Probably will be the very best, in my opinion. 

For your LTC benefits, I am not as convinced?  Too many unknowns. If John Hancock does not change the Index Segment Cap rates or the internal insurance charges, your LTC benefits look great!  But if John Hancock does change the non-guaranteed elements over the years, your LTC benefits illustrated at current assumptions will not materialize.

So, with these considerations in mind, I believe this policy will be an excellent fit if you are seeking benefits for long term care if needed, however maximizing your death benefit is of the utmost importance for you. Possibly you are not convinced you will ever need long term care, but wouldn't mind a hedge. Possibly you might believe that if you do need long term care, it might only be for a short period of time 1-3 years, for example. If so, the John Hancock 4 year LTC benefit period could be perfectly fine.

Should you not care about the life insurance benefit whatsoever, and if your goal is to maximize guaranteed long term care benefits, I might look elsewhere.

So, those are my thoughts.

But I am glad we have this new hybrid LTC insurance option to consider. Options help all of us.

Long Term Care Insurance Reviews

If you would like to learn more about a few of the other really good hybrid long term care insurance policies, here are a few reviews of the better policies available today. All of these policies should be on your short list for consideration.

Nationwide CareMatters Together review (joint)

Nationwide CareMatters II review (individual)

OneAmerica Asset Care review

Lincoln Moneyguard review

New York Life Asset Flex review

Securian SecureCare IV review

Receive Free Long Term Care Insurance Quotes

I will be pleased to help you compare the long term care insurance plans available to you in the marketplace. For my consultation, please contact me at (800) 891-5824. Or you may request your information online through my quote request form. Thank you for reading my blog.

Jack Lenenberg, J.D.