INNOVISION UNIVERSAL LIFE INSURANCE

A guide to your policy THE MANUFACTURERS LIFE INSURANCE COMP ANY

Congratulations on buying InnoVision – a fnancial product that uniquely combines the protection of life insurance with the benefts of tax-advantaged investing. If we were to single out the key characteristics of InnoVision, they would be fexibility and choice. In fact, clients tell us when they learn about InnoVision, they are surprised that“life insurance” can do all the things this plan can do.

As you know, your needs change continually as you go through life. Your fnancial needs are based on your maritalsituation, on whether or not you’re raising a family, on the growth of your fnancial resources and on the nature of your livelihood. In later years, your needs change again as you prepare for a comfortable retirement and plan your estate to maximize tax savings.

At all of these life stages, and whatever your individual needs may be at any given time, InnoVision is an insuranceplan you can count on to meet your needs effectively.

InnoVision’s flexibility and choice can meansubstantial benefits to your survivors

There are many compelling personal and business uses for the insurance protection offered by InnoVision. Providing a continuing income for survivors usually tops the list. Other uses include cancelling debt obligations such as a home mortgage or business loan, minimizing taxes on death, and various estate planning and business continuation strategiessuch as providing for “fair share” inheritances and adequate funding of partnership buy-out arrangements.

The insurance proceeds of your policy are paid to your benefciary or benefciaries tax free. In some cases, the investment portion is included in the Death Beneft your benefciary receives. This is a very important beneft compared to the proceeds of an RRSP, for example, which may be subject to income tax in the year they are received by benefciaries. Also, the proceeds are generally protected from certain creditors of the insured.

As a convenience, your benefciary may currently direct the proceeds into a Manulife Bank of Canada Secured Benefts Account. This is a preferred rate chequing/savings account that gives your benefciary time to decide how best to manage the proceeds. Other settlement options are also available and your fnancial advisor can provide information on them.

InnoVision’s flexibility and choice provideunique investment advantages

Let’s briefy describe the advantages of InnoVision during your lifetime. First, your policy is a superb investment vehicle that gives you deposit fexibility and many investment options that let you customize your portfolio to ft your risk-return preferences and life phase requirements. InnoVision’s investment options are highly competitive with other investment plans currently offered in the fnancial marketplace.

Second, when you purchased your policy, you chose between two bonus options – one that starts crediting your policy with an interest bonus on the 5th anniversary and helps you build the values in your policy over the long term, and one that gives you the immediate beneft of lower management fees on all investment accounts. For more on these two options, see pages 8 and 9.

Third, your investment earnings are tax-advantaged. That means they can serve as a signifcant additional tax shelter ifyou are already maximizing your RRSP contributions. Within InnoVision, your interest earnings are allowed to grow on a tax-deferred basis, maximizing your returns.

In addition, you can withdraw part of your policy’s Cash Value at any time, or use your policy as collateral for a loanor a line of credit. Your policy may also offer protection from creditors if a family member is named as benefciary.

InnoVision adapts to your changing needs InnoVision has the fexibility to meet your changing needs. You may need to review your protection when major eventsoccur in your life. Your advisor can help you determine whether the protection you have is adequate.

In addition, your advisor can also review your investmentmix with you on a regular basis to ensure it continues to meet your long term investment goals and changing economic circumstances.

Thanks to its innovative features and unmatched fexibility, making these or other changes to your InnoVision policy is easy. Please contact your fnancialadvisor for more information.

You can withdraw part of your policy’s Cash Value

at any time, or use your policy as collateral for a

loan or a line of credit

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PROTECTION

What makes the life insurance componentof InnoVision unique?

First, InnoVision provides fexible life insurance protection that can change as your needs change. You can increase ordecrease your total coverage, to ensure an appropriate tax-free Death Beneft for your benefciaries.

Second, you enjoy the advantages of Wealth Enhancer.There are three Wealth Enhancer options available: Increases, Increases and Decreases and Wealth Enhancer Plus. They are designed to provide automatic increases and decreases in coverage when required to keep your policy exempt from annual taxation. Wealth Enhancer automatically increases your policy’s Death Beneft whenever the policy is in danger of exceeding the tax-exempt limits.

The Wealth Enhancer Plus option is an excellent option ifyou are looking for maximum wealth accumulation.

Third, your InnoVision policy can beneft from another optional rider, Protection Indexor. It provides automaticincreases in your coverage each year by a percentage determined by you and/or by a percentage based on an economic indicator such as the Consumer Price Index.

This allows your coverage to keep up with infation or an insurance need that is growing.

Fourth, InnoVision provides the following choice of Death Benefits:

■■ Level Face: The Death Beneft remains the same as long

as you own your policy.

■■ Face Plus: The Death Beneft includes the amount of

insurance coverage purchased, plus the portion of the

Account Value that is allocated to that coverage.

■■ Account Value on Each Death: When there is more than

one life insured on the policy, this Death Beneft type pays

a percentage (or a selected percentage) of the Account

Value on the death of each life insured. You can choose

the percentage of Account Value that is paid. Depending

on how much Account Value is paid out, additional

deposits may be required to keep the policy in effect. On

the death of each subsequent life insured, the selected

percentage of the Account Value is paid out again. This

process continues until the last insured person on the

policy dies and the policy terminates.

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How can I change my protection component? You have several options open to you should you wish to change your current amount or type of coverage.

To increase the amount of protection to cover a temporary need such as a mortgage, you can add a low cost Term Insurance rider to your policy (you can add Term riders for people not insured under an insurance coverage.) If you need additional permanent protection, you can add more coverage of the type that you currently have. Increasing your protection, of course, is subject to evidence of insurability of the person you are covering.

Similarly, you can reduce the amount of your coverage by deleting or reducing a rider coverage or your insurance coverage.

Your fnancial advisor can help if you need to adjust your coverage.

What about my insurance costs Your InnoVision policy provides level cost of insurance and yearly increasing cost of insurance structures that allow you to tailor your policy to suit your specifc needs.

A level cost of insurance spreads the actual cost of your coverage evenly over the life of your policy.

Higher insurance costs are deducted in the early years of your policy, resulting in slower Cash Value growth. However, higher growth in Cash Value occurs in the later years when lower insurance costs are charged. If your key policy goals are long term, the level structure might be your preferred option.

A yearly increasing cost structure increases to equal the actual cost of insuring you as you grow older. It provides the opportunity for higher Cash Value early in the life of your policy, and slower growth in Cash Value in later years when the costs to insure you increase.

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It’s also possible to get the best of both worlds because you can switch from increasing to level. For example, you can start your policy with the increasing cost of insurance to build up your early values, then switch to the level structure to produce greater value over the long term.

Healthy rewards for healthy living Manulife was the frst life insurance company to introduce a unique underwriting program called Healthstyles. Healthstyles is a better way of determining what you shouldpay for your insurance based on your health and lifestyle. With Healthstyles, we look in more detail at your tobaccouse, cholesterol level, blood pressure, and family medical history. Your good health can allow us to offer you betterrates on your insurance coverage.

How can I further customize my policy? In addition to our Wealth Enhancer riders, ProtectionIndexor and the Term Insurance rider mentioned earlier, several other options are available to customizeyour protection.

It should be noted that adding a rider to your policy after ithas been issued is subject to evidence of good health andinsurability.

A Waiver of Monthly Deductions Rider ensures that your monthly insurance costs will be waived, if the person insured under the rider remains totally disabled for six months or more. This means your protection can continue without the need to make deposits during a disability.

The Accidental Death Benefit provides an additional beneft to your benefciaries if the person insured under thisbeneft dies as the result of an accident.

Guaranteed Insurability Options give you an opportunity to purchase additional coverage at specifed ages, policy anniversaries or events (such as marriage or births) without providing new evidence of insurability.

The Child Protection Rider provides $10,000 of life insurance coverage for your child. With this rider, your child also has the option to purchase up to $250,000 of new life insurance coverage at age 25 (or at specifed option dates) with no medical evidence. Up to $100,000 of that amount can even be critical illness insurance.

The Business Value Protector Rider is designed specifcally to address business needs. As your business grows, so does its value. If you die, your business and your benefciaries may not have enough funds on hand to pay the costs associated with your business success, such as paying capital gains taxes and funding buy-sell agreements. This rider provides the option to purchase additional life insurance in the future without providing the normally required evidence of continued good health. The amount is customized to increase with the growth in the value of your share in the business and no expensive business valuations are needed.

FLEXIBLE LIFE INSURANCE

Increase or decrease your total

coverage as needed. Provides a

tax-free Death Beneft to your

benefciaries.

WEALTH ENHANCER PROTECTION INDEXOR TERM INSURANCE RIDERS

A rider that can increase

or decrease your coverage

automatically.

A rider that can increase your

coverage each year based

on infation or by an amount

specifed by you.

Provide low cost temporary

protection. Available without

base coverage.

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Does InnoVision allow me to insure morethan one person?

Yes, InnoVision can accommodate your needs by creating a single policy on a number of people in a family or business. Unique fexibility is provided, as each person can be covered separately for a different amount, with different cost of insurance structures and a different set of riders. All coverages on a policy, however, must have the same Death Beneft type. (These are explained on page 4.) When one person dies, a Death Beneft is paid and the policy continues.

As well as individual coverages, you can also have joint coverages to cover an insurance need when either you or someone else dies; for example, a spouse or a business partnership situation where money would be needed if one partner died. This coverage is called joint frst-to-die, and provides a single beneft when the frst insured dies.

If you need coverage when the last insured dies, joint last-to-die coverage is available. This coverage pays a death beneft on the last death. This is an ideal way, for example, to provide for the capital gains tax which may be triggered upon the last death in a marriage or business partnership.

Joint last-to-die is available as Costs to Last or Costs to First Death. With Costs to First Death, the costs associated with the coverage end when the frst insured on the coverage dies. This option is a good idea for families where one individual is the primary income earner. If the primary income earner dies, then the coverage would continue without costs.

Your policy also has a feature called Joint Legacy Protector. With this feature, you can change all or part of a joint frst-to-die coverage into joint last-to-die coverage without evidence of insurability anytime after the policy’s 5th anniversary and before the oldest insured is age 69. You have the opportunity to do both full and partial conversions, although some restrictions apply.

With your InnoVision policy, you may even substitute a life insured in response to a change in a personal or business circumstance.

Are benefits available if I become disabled? Under the Disability Beneft in your InnoVision policy, if an insured person becomes disabled, a tax-free beneft ispayable from the Cash Value of the policy. This beneft willreduce the Cash Value and Death Beneft on the policy.

Are benefits available if I becometerminally ill?

Manulife’s Compassionate Assistance Program provides fnancial assistance to insured clients who are terminally ill.

As an InnoVision policy owner, if you as a life insured become terminally ill and have a fnancial need, you may apply for a loan of up to $100,000 or 50% of the Death Beneft, whichever is less. If a loan is granted, your policy is then assigned to Manulife as security for the loan so the Death Beneft can be applied to repay the principal and interest of the loan. At death, the Death Beneft proceeds, less the amount owing on the loan, are paid to the life insured’s benefciary.

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INVESTMENTS

Fixed Interest Accounts InnoVision’s Fixed Interest Accounts offer the least risk. You should consider keeping some of your money in a Fixed Interest Account to cover your monthly insurance costs.

Balanced Index Accounts The Balanced Index Accounts offer a hands-off approach to investing. Their returns are based on a blend of investment returns of indices and Fixed Interest Accounts.

Indexed Accounts These are variable investments with the potential for high long term growth but also for negative returns if the market indices they are based on decrease. Many of these accounts are also affected by fuctuations in the Canadian dollar.

Managed Accounts The Managed Accounts include a wide selection of investment accounts that credit interest linked to the performance of a mutual fund. The underlying funds are managed by a variety of fund managers, all carefullyselected and monitored on your behalf.

Information about InnoVision’s accountsand their performance

You can fnd out more about the investment accounts available in your InnoVision policy and track current and historical investment performance for the accounts on our Web site at manulife.ca/ul. You can also ask your fnancial advisor for a copy of our investment brochure A guide to your investment accounts (MK0787).

In addition, your policy statement will provide regular update on rates of return customized to your policy.

The InnoVision bonus options – another example of flexibility and choice InnoVision lets you choose how you want to be rewarded. When you purchased your policy, you selected either the Valued Client or the Investment Accelerator bonus options.

The Valued Client option rewards your long term commitment to your policy with an interest bonus that is credited to your policy beginning on your 5th anniversary and on every anniversary after that.

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And you may qualify for an additional bonus if you make extra deposits into your policy. Each year after the 5th policy anniversary, if your deposits exceed a required minimum percentage, we’ll credit your policy with additional interest. If your policy passes this test on or after the 10th policy anniversary, the extra interest will be automatically credited from that point on… for as long as you own your policy.

InnoVision’s other bonus option, the Investment Accelerator, lets us pass on to you some of the advantages that come with Manulife’s size and success. Because we havelarge-scale dealings with external fund companies, we can offer those who chose this option lower management fees on our investment accounts. And lower management fees mean a higher rate of return for you.

With the Investment Accelerator, you get the immediate beneft of interest based on the investment returns of mutualfunds within InnoVision’s taxadvantaged environment… without extra universal life management fees being added.

Your policy’s Side Account The Side Account is a separate account that’s outside your policy. It allows you to conveniently prepay deposits and it holds excess deposits that, if left in the policy, would cause growth to become taxable on an annual basis. Since this account is considered outside the policy, the interest it earns is taxable each year. The Side Account contains accounts that match the investment accounts available in InnoVision policies.

The accounts that match the Balanced Index Accounts, Indexed Accounts, and Managed Accounts are Holding Accounts, which are not equivalent to these accounts within your policy. The Holding Accounts earn the same interest as the Savings Account and are designed simply to ensure that funds moving from the Side Account into your policy are transferred to the accounts you intended them for.

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Can I easily change my investment options? It’s important that your investment mix stays current with your goals and circumstances. Longer term market trends can also play a part in determining the nature of your portfolio. Reviewing your investments at least once a year is a good idea, or more often if conditions warrant.

You may change your investment mix at any time. For example, you may transfer funds between investment accounts. You may also adjust the percentage of your regular deposits allocated to each investment account, and you may direct single deposits to one or more accounts. It should be noted that some fund transfers may attract a Market Value Adjustment (MVA), depending on the nature of the investment accounts affected.

When you want to make changes to your investments, simply contact your fnancial advisor for assistance or send us your written request. Once the changes are processed, we will send you a confrmation of the changes made.

Can I make a withdrawal or arrange a loan? In addition to being able to change your investment mix, you may also make cash withdrawals. However, an MVA might apply if you withdraw funds from a Fixed Interest Account.

You can also use your policy as collateral for a loan or line of credit, with the advantage that you can make use of the value of your policy without having to withdraw funds from it. You can inquire about arranging a collateral loan or a line of credit from the Manulife Bank of Canada through your fnancial advisor.

What happens if I access theinvestment portion?

Any funds taken out of the Fixed Interest Accounts, which include Guaranteed Investment Accounts (GIA) and Portfolio Average Accounts, before maturity may be subject to an MVA.

Let’s look at how this works with Guaranteed Investment Accounts (GIAs): Interest rates on GIAs are guaranteed for the term you’ve chosen. If you cash in all or a portion of a GIA before maturity, an MVA will be charged to refect the current interest rate environment, unless your GIA has a rate higher than the one currently offered by us.

For example, if you cash in a GIA earning 4% with a remaining term of three years and the current interest rate for a 3-year term GIA is only 3%, then no MVA would be charged. If the reverse were true, however, and the current rate is 5%, an MVA would be charged. The MVA formula can be found in the Cash Value provision of your contract.

We want to point out that when funds are withdrawn from your policy, your total Death Beneft reduces. Also note that withdrawing all of your Account Value will cause your policy to lapse.

InnoVision administration costs are spread over a number of years. Should you have to cancel your plan within eight years (10 years for the Wealth Enhancer Plus option) of the start of any insurance coverage, we will collect a Surrender Charge. This means that InnoVision works best to provide long term growth and protection.

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Deposit fexibility and choice

You control the amount and timing ofyour deposits

When you see all the options available to you around the deposits you make into your policy, you’ll understand why wekeep emphasizing InnoVision’s fexibility and choice.

You control the amount and timing of your deposits. The only limits are that you need to cover the minimummonthly cost of your policy and you can’t exceed a maximum that’s set to make sure you don’t jeopardize your policy’s tax-advantaged status.

You even have fexibility around this maximum because any amount over the maximum can be placed in your Side Account until it can be transferred into the policy without affecting its tax status.

The choice is yours as to how often you make deposits. You can set them up on a regular basis – monthly, quarterly, semi-annually or annually. You can also make lump sum deposits at any time, directly into your policy or into your Side Account.

How are deposits allocated to myInnoVision policy?

Each deposit is allocated to your investment accounts on a percentage basis according to your instructions. You provide these instructions in writing on your application and you canchange them whenever you wish. Each deposit is subject to a percentage charge.

Each month a deduction to cover the cost of your insurance protection and policy expenses is made from your investment accounts. This deduction also includes a policy fee and a fee for each life insured under the policy.

What if I cannot afford to make a deposit?The fexibility of your InnoVision policy comes into play in that situation. You can skip or change deposits at any time provided there is suffcient value in your policy to cover ongoing charges. Changing your deposits or taking a deposit holiday, however, may affect the performance of your policy in achieving your long term objectives.

Should you fnd there is not enough value in your policy to cover charges, you can reduce or eliminate some of your coverage. Your fnancial advisor can help you determine what options are best in order to continue your policy’s benefts.

What tax benefits does my InnoVision policyoffer over traditional investments?

In addition to the tax-free nature of insurance proceeds on death, another important advantage is that all of the deposits made to your policy earn tax-deferred interest. In addition, should an insured person under the policy become disabled, a tax-free Disability Beneft is payable from the Cash Value of the policy. If you withdraw money from your policy for other reasons, however, some or all of that amount may be taxable at that time.

As a result, you enjoy two major advantages over traditional savings vehicles. First, the money you place in your policy offers the potential for a higher rate of return than other interest-bearing investment vehicles would provide. That’s because the interest you earn isn’t subject to annual taxation.

Second, this pre-tax interest can be left to accumulateadditional interest earnings.

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InnoVision is sold by, and is a registered trademark of Manulife (The Manufacturers Life Insurance Company). Manulife, Manulife Insurance, the Block Design, the Four Cube Design, and Strong Reliable Trustworthy Forward-thinking are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affliates under licence. MK0735E 05/12