Manulife Annuities: Income solutions you can count on

Retired Canadians are:

Living longerIn some cases, spending as much time in retirement as working Enjoying a healthier and more active retirement than their parents

Longevity Risk

Source: Annuity 2000 Mortality Table, Society of Actuaries. For illustrative purposes only.

The probability of a healthy 65 year old living until…

Age Single female Single maleAt least one member of a

couple

70 96% 93% 99%

80 81% 71% 94%

90 44% 33% 63%

95 23% 16% 36%

Retired Canadians are:

Worried about market fluctuationsA market downturn can have a negative impact on retirement incomeImpact can be especially painful if the downturn occurs just before or after retirement

Retired Canadians are:

Losing access to Defined Benefit Pension PlansDefined Benefit Pension plans are being offered by fewer Canadian companies Fewer Canadians have access to guaranteed retirement income from their company pensionInvestment risk is being transferred to the employee from the companyIncreasingly responsible for generating their own retirement income

In the current investment environment

Generating reliable retirement income is not easy:Markets are volatileInterest rates are lowTax rates on interest income are highDividend yields are low

Let’s consider an annuity

Guaranteed income – for life or a chosen period of time Higher income rate – you can receive guaranteed income at a higher rate than many other guaranteed income products offer Tax advantages – for non-registered funds, partial tax deferral is available for your incomeOptional protection for your spouse – income can be based on two lives to guarantee future income for you and your spouse

Let’s consider an annuity…

Payment guarantees – ensure a specific amount is paid to you or your beneficiaries, no matter what happensSimplicity – a single lump-sum investment can provide security and peace of mind while reducing ongoing investment decisionsConfidence – you’ll rest assured knowing that your income source will not be exposed to volatile financial markets

What is an annuity?

In exchange for a lump sum investment, an insurer makes guaranteed regular income payments to an investorPayments can continue for a choice of

One or two lifetimes (Single Life or Joint and Survivor Annuity)A specified period of time

Payments contain both interest and a return of principal

How is annuity income determined?

Income is determined at the time of purchase and based on several factors, including:

Amount of money investedAge and sexInterest rates at time of purchaseType of annuity (e.g. Life or Term Certain)Length of time annuity payments are to be guaranteedIncome deferral – time period between purchase date and when the income starts

Attractive income

Generally, the older the investor is at time of purchase, the higher the income

Age at Purchase

Premium/Investment(A)

Annual Income*(B)

Income as % of Premium

(B)/(A)

65 $100,000 $6,368.64 6.4%

70 $100,000 $7,315.44 7.3%

75 $100,000 $8,730.48 8.7%

80 $100,000 $11,001.60 11.0%

Male $100,000 Single Life, non-registered prescribed annuity, 3-year payment guarantee at April 25, 2012.*Annual Income represents sum of 12 monthly payments. For illustrative purposes only.

Attractive After-Tax income

Annuities generate substantially more after-tax guaranteed income from your investment

Portfolio Make up Investment Amount

Pre-tax Annual Income

After Tax Annual Income

After Tax Income %

5 year GIC @ 2.50% $100,000 $2,500 $1,500 1.5%IncomePlus (age 65 @ 4%) $100,000 $4,000 $3,840 3.8%Manulife PensionBuilder (age 65 @ 4.5%) $100,000 $4,500 $4,230 4.2%

Annuity (male age 65) $100,000 $6,368 $5,780 5.8%Annuity (male age 75) $100,000 $8,730 $8,730 8.7%

.

For illustrative purposes only. Assumed 40% marginal tax rate. GIC assumes only interest is withdrawn and the interest rate is 2.5%. IncomePlus assumes average tax efficiency of 90%, an annual rate of return of 5%, and a withdrawal rate of 4% with year-end allocations.Manulife PensionBuilder assumes an average tax efficiency of 85%, an annual rate of return of 2.5%, and a withdrawal rate of 4.50% with year-end allocations.Life Annuity quotes are effective as at April 25, 2012, based on a male aged 65 with a three-year payment guarantee and monthly payments with prescribed taxation.

Choosing the right annuity

Your particular income needs will help determine the annuity that is right for you:

Guaranteed retirement income for lifeIncome for a specific time period

Guaranteed retirement income for life

Single Life Annuity:Can provide income that lasts for the rest of your life

Joint and Survivor Annuity:Can provide income that lasts for your life and will continue to your spouse after you die

Income for a specific period of time

Term Certain Annuities:Provide a guaranteed income for a pre-selected period of timeIncome can help pay for obligations within a time period

Gradual inheritance transfer

An Annuity Settlement Option: Gradually transfers investment inheritances to a beneficiaryAvoids lump sum payout to a beneficiary who may not be able to manage it Can be added to a number of Manulife Financial’s products, such as the Manulife Investments Guaranteed Interest Contract, segregated fund contracts, or life insurance policies

Payment guarantees

Ensure a minimum amount of income is paid from your annuity investment to you or your beneficiaries*, no matter what happensTwo types:

Manulife Principal Protected AnnuityTM

Guarantee period

*A death benefit payable to beneficiaries as a lump sum (commuted value) will result in less than the full value being received.

Payment guarantees – principal protection

Manulife Principal Protected AnnuityTM

Ensures money invested is always paid backBeneficiaries receive a lump sum equal to the difference between the original premium paid and the total payments receivedTax efficient for non-registered contracts

Payments made to annuitant

Lump sum paid to beneficiary

Annuitant* dies

Principal

*Or last surviving annuitant in the case of a Joint and Survivor Annuity

Payment guarantees – Guarantee Period

Ensures payments continue for a specified period of timeIf the investor dies before the end of the guarantee period, payments continue to the beneficiary*Can guarantee more or less than the original principalPeriods from 0 to 30 years**The longer the guarantee period, the lower the income

*A death benefit payable to beneficiaries as a lump sum (commuted value) will result in less than the full value being received **Restrictions may apply.

Payments made to annuitant

Payments made to beneficiary

Annuitant dies

End guarantee period

Taxation of annuities

Registered/Pension FundsFor annuities purchased with Registered or Pension funds, all income is 100% taxable

Non-registeredFor annuities purchased with non-registered funds, only the interest portion is taxable

Taxation of non-registered annuities

“Non-Prescribed” taxation The interest element is taxed as it accrues (earned)Taxation will be higher in the early years of the annuity and decrease over the life of the contractAll contracts qualify

“Prescribed” taxationThe taxable portion of each payment remains level Provides an element of tax deferralA contract must qualify

Tax Advantages

Prescribed taxation:Provides an element of tax deferral, with less tax being paid in the early years of the contractLevel taxation keeps the income more predictable and consistentTax efficient for most investors; some life annuities at older ages can be tax-free

Potential for increased government benefitsLower taxable income reduces potential claw backs of government benefits and improves tax credit eligibility

Consider an annuity…

An attractive income generating investment:Guaranteed incomeHigher income rate than many other guaranteed income products offerOptional protection for your spousePayment guarantees Tax advantagesSimplicityConfidence

Thank you

Important Information

The information in this presentation is for general information only and should not be considered investment or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.

The Manufacturers Life Insurance Company (Manulife Financial) is the issuer of all Manulife Annuities and of the GIF Select IncomePlus and Manulife PensionBuilder insurance contracts and is the guarantor of any guarantee provisions therein. The Manulife Principal Protected Annuity, IncomePlus, Manulife PensionBuilder, Manulife, Manulife Investments, the Manulife Investments For Your Future logo, the Block Design, the Four Cubes Design, and Strong Reliable Trustworthy Forward-thinking are trademarks of The Manufacturers Life Insurance Company, and are used by it, and by its affiliates under license.