Illustration Guide - Repsource - Manulife Financial

Illustration Guide 

For use with Manulife one 

Manulife one Illustration Guide 1 December, 2000

Table of Contents 

TABLE OF CONTENTS......................................................................................2 

INTRODUCTION ................................................................................................3 

GETTING STARTED..........................................................................................4 

INTRODUCTION AND SCREEN INFORMATION ..............................................................................4 

SETTING UP A NEW CLIENT .......................................................................................................6 

ASSUMPTIONS..........................................................................................................................8 

THE CONCEPT ..........................................................................................................................9 

CONCEPT REPORT ..................................................................................................................18 

THE PROPOSAL.......................................................................................................................21 

PROPOSAL REPORTS ...............................................................................................................29 

ADDITIONAL PROPOSALS........................................................................................................32 

SUMMARY .............................................................................................................................34 

APPENDIX .........................................................................................................35 

CREDIT POLICY......................................................................................................................35 


INTRODUCTION 

Manulife one 

Manulife one is an all-in-one personal borrowing and chequing account 

designed to help clients reach their personal financial goals faster, more 

efficiently, and at dramatically lower interest costs than they – and you – have 

ever imagined possible. 

Manulife one is available for sale by certified Manulife one advisors. 

Illustration 

Guide 

This guide provides you with the information you need to use the illustration 

system. 

Two versions 

There are two versions of the illustration software available: 

stand-alone: Operates through standard Windows menus; can be accessed 

by clicking Start - Programs - Manulife Financial - 

Manulife one. 

NaviPlan: 

Operates within either NaviPlan Standard or NaviPlan 

Extended. 

As both versions operate in virtually the same way once you have entered the 

system, the screen examples shown have been captured from the stand-alone 

version. Differences are indicated as they arise. 

Emerging 

Information 

Systems, Inc. 

The illustration program was designed and developed in cooperation with 

Emerging Information Systems, Inc. (EISI) of Winnipeg. EISI also designed 

the NaviPlan software and created the Insure Right and Invest Right features 

for Manulife Financial. NaviPlan is a registered trademark of EISI. 


Getting Started 

Introduction and screen information 

Introduction 

To run an illustration, you must work from a client file, which allows you to 

store a number of proposal options for a client within one computer file. 

For those accustomed to using NaviPlan, this is the same process you are 

already familiar with, so you can move directly to the case study. 

Desktop 

The desktop has a menu bar at the top and two icons in the lower right corner. 

Printer icon: Used for printing reports, charts, and graphs. To print, drag 

proposals onto the printer icon. 

Trash icon: 

Used to delete proposals you don't need. Drag unwanted 

proposals onto the trash icon. The trash icon gets fatter to 

indicate that something is inside. 

To empty the trash, right-click the icon, and select Empty 

from the pop-up menu. 

NaviPlan Standard and Extended users: a number of other icons also 

appear on your screen, but are not used by the Manulife one illustration 

system. 


Introduction and screen information, Continued 

Main menu 

The following menus can be opened by clicking their names on the menu bar. 

They contain commands that can be used in Manulife one illustrations. 

Menu 

File 

Edit 

Client 


Window 

Help 

Functions 

• Set up a new client. 

• Set up a new Manulife one proposal for an existing 

client. 

• Open an existing client file. 

• Set up a new printer icon. 

• Print a proposal. 

• Exit the program. 

• Undo previous commands. 

• Cut, copy and paste. 

• Duplicate a proposal (for what-if scenarios). 

• Delete proposals. 

• Empty the trash. 

• Edit client and family information. 

• Go to a specific input screen on an existing proposal. 

• Arrange screen items. 

• Access the Manulife one Help system. 


Setting up a new client 

New client file 

To set up a new client, in the File menu click New Client - From Scratch. 

The New Client dialog opens. 

NaviPlan users can also pull client information from Client Manager using 

File - New Client - From OLifE. 

There are four tabs across the top: 

• Base Family: Enter family information. 

• Basic: Enter first names and birth dates. 

• Advisors: Enter information about financial advisors, lawyers, 

accountants, etc. (optional). 

• Planner Data: Enter your information. This information has to be entered 

only once unless the information changes or your software is shared by 

several users. 

Move from tab to tab either by clicking the tabs or by clicking Next >>. 

When you have entered all the information, click OK. 


Setting up a new client, Continued 

Save client file 

The Save Client As dialog opens. The program uses a standard naming format 

of last name, first name for single clients (for example, Smith, John) and last 

name, first name and first name for couples (for example, Smith, John and 

Mary). 

If the file name suggested by the program is acceptable, click OK; if it is not, 

change the name and then click OK. 

Next screen NaviPlan users: The next screen asks whether you want to 

• Create a New Plan 

• Create a New Asset Allocation Proposal (Invest 

Right) 

• Create a New Comprehensive Retirement Concept 

• Create a New Insure Right Proposal 

• Create a New Manulife one Proposal 

Click Create a New Manulife one Proposal and 

then click OK. The Concept Settings dialog box 

opens. 

Stand-alone users: 

The program takes you directly to the Manulife one 

input screens. 

Opening 

existing clients 

If you want to access an existing client file, in the File menu click Open 

Client… The Open Client dialog box appears. Select the client file name and 

click OK. 


Assumptions 

Introduction 

We'll use a case study to illustrate the process for preparing and printing 

Manulife one proposals. The case is broken into five components: concept, 

concept report, proposal, proposal reports, and additional proposals. 

Client 

information 

Our case study clients are as follows: 

General Info: Hamilton family, married with two dependants 

Address: 125 Banning Street, Waterloo, Ontario N2K 3D6 

Phone: Home: 747-1110, Business: 886-3452 (Kerry) 

Heads of the • Kerry, male, born Feb 23 1958 

Family: • Janet, female, born Oct 11 1960 

Dependants: • Jason, male, born Dec 1 1988 

• Karen, female, born Jul 9 1990 

Value of home: $200,000 

Mortgage: • Mortgage Date: Dec 1 1994 

• Interest Rate: 7% 

• Payment Frequency: Monthly 

• Original Principal: $150,000 

• Amortization: 25 years 

Other debts: • Line of credit (LOC): balance of $2,200 at 8% interest, 

paying $150 per month 

• Credit cards: balance of $3,800 at 18% interest, paying 

$250 per month 

Savings: • Maintain a minimum balance of $3,000 in chequing 

account in order to have transaction fees waived 

• Have a savings account of $1,500 at 1.75% 

Cash flow: • Monthly income after taxes: (Kerry) $3,000 

• Monthly income after taxes: (Janet) $2,700 

• Monthly expenses: $2,100 not including debt payments 

Issues: • Cash flow is tight. 

• Savings are lower than they would like. 

• They are behind on their retirement planning. 

• They are somewhat concerned about rising interest rates. 


assumptions 

For the Manulife one product, we will make the following assumptions: 

• Variable rate: 6.5% 

• Fixed rate 5 year: 7.75% 

• Main account credit rate: 4.0% 

• Legal fees for property transfer: $450 

• Transaction fee package: $21/month 


The concept 

Introduction 

The illustration system only requires basic information to demonstrate the 

power and benefits of Manulife one through the creation of a Concept 

Proposal. More information will be required for the creation of an Account 

Proposal. 

System 

navigation 

Using the information from the previous section, set up a client from scratch. 

The Concept Settings dialog box should be open. If it is not, from the File 

menu select New Manulife one Proposal. 

The following screen appears: 

The one Account Concept Settings dialog is the input system for Manulife 

one. The buttons down the left side represent the categories of the input 

system and the tabs across the top represent sub-sets of the categories. You 

can move from screen to screen using the tabs (within each category), the 

buttons (to move to another category), or the > buttons 

(bottom left). Click OK when you have finished entering information on all 

screens. 

When this dialog is first opened, the Client Profile button and the General tab 

are selected and the screen shows the Manulife one logo. Click Next >> or 

Client Information to move to the Client Information tab. 


The concept, Continued 

Client Profile - 

Client 

Information 

On the Client Information tab you will see four sections: 

• Title of proposal 

• Personal 

• Manulife one General Assumptions 

• Account Type 

In the Title of proposal section enter a name for the proposal that will 

distinguish it from other proposals you may run for the same client. For the 

purposes of this case study, leave it as Manulife one Proposal. 

The Personal section should already be completed, since you entered this 

information when setting up the client. 



Client Profile - 

Client 

Information 

In the Manulife one General Assumptions section there are five fields: 

• Estimated Value of Home: Enter $200,000. 

• Manulife one Borrowing Limit: This is calculated by the program. 

• Current Mortgage Balance: Leave blank. Use only when Second 

Position is selected in the Account Type section described below. 

• Adjusted Borrowing Limit: Leave blank. Use only when Second 

Position is selected in the Account Type section described below. 

• Manulife one Rate Assumption: Enter 6.5% 

The two check boxes at the right indicate if the home is a condominium, if it 

has a well or a septic system, or if is built on property not considered suitable 

for the Manulife one program. Condominiums, homes with wells or septic 

systems, and non-approved property are subject to lower borrowing limits. 

Since the Hamiltons live in a house with municipal water services, do not 

select either of these options. 

The Account Type section has two options: First Position and Second 

Position. Click First Position. This will tell the program to make 

assumptions based on the amount you entered as the Estimated Value of 

Home. 

Once this screen is complete, click Next >> or Liabilities & Savings to move 

to the Liabilities & Savings category. 

Liabilities & 

Savings – 

Liabilities 

On the Liabilities tab you will see three main sections: 

• Mortgage 

• Liabilities 

• Summary 

There are several fields in the Mortgage section: 

• Mortgage Date: Enter Dec 1 1994 

• Interest rate: Enter 7% 

• Payment frequency: Select monthly from the drop-down menu 

• Original principal: Enter $150,000 

• Amortization: Enter 25 years 

The system calculates the balance as of today's date and the monthly 

payment. 



Liabilities & 

Savings – 

Liabilities 

If the clients have occasionally doubled payments or made lump sum 

payments, their actual balance will be lower than that shown. You can 

override the calculation by entering under Outstanding Principal as of: 

• the date of the last balance confirmation 

• the amount that was last confirmed 

This will not change the payment but it will alter the amortization period. 

If the clients are systematically over-paying their mortgage to pay it off 

quickly, simply adjust the number of amortization periods until the payment 

more closely matches what the clients are actually paying. 

In the Liabilities section you can enter any current loans, lines of credit, credit 

card balances, and other debts. You need to know the current balance and two 

of the following three pieces of information for each debt: 

• interest rate 

• number of payments left 

• monthly payment 

The program will calculate the third piece of information. Select the 

corresponding option to tell the program which piece of information to 

calculate before entering the information you do know. 



Liabilities & 

Savings – 

Liabilities 

For the Hamiltons' line of credit: 

1. Click Payments Left. 

2. In the Debt Source column, click the arrow and select Line of Credit 

from the drop-down menu. 

3. Enter: 

• $2,200 as the outstanding balance 

• 8% as the interest rate 

• $150 as the monthly payment 

The system calculates that the Hamiltons have 15 payments left to make and 

adjusts the payment to $154.61, so that it pays off in exactly 15 months (with 

equal installments). 

For the Hamiltons' credit cards: 

1. Leave Payments Left as the selected option. 

2. In the Debt Source column, click the arrow and select Credit Cards from 

the drop-down menu. 

3. Enter: 

• $3,800 as the outstanding balance 

• 18% as the interest rate 

• $250 as the monthly payment 

The system calculates that the Hamiltons have 17 payments left to make and 

adjusts the payment to $254.90 so that the balance pays off in exactly 17 

months (with equal installments). 



Liabilities & 

Savings – 

Liabilities 

The Summary sub-section shows Total Liabilities and the current Total 

Monthly Payments for all debts. 

Liabilities & 

Savings – 

Savings 

Click Next >> or Savings to move to the Savings tab. This tab consists of 

three sections: Savings, Transfer Costs, and Summary. 

To enter the Hamiltons' savings information: 

1. In the Savings Source column, click an arrow and select Chequing 

Account Minimum from the drop-down menu. 

2. Enter: 

• a balance of $3,000 

• an interest rate of 0% 

3. In the Savings Source column, click an arrow and select Savings Account 

from the drop-down menu. 

4. Enter: 

• a balance of $1,500 

• an interest rate of 1.75% 



Liabilities & 

Savings – 

Savings 

In the Transfer Costs section, enter the estimated costs involved in moving to 

a Manulife one account. 

• Legal Costs: For the Hamiltons, enter $450 

• Penalties Incurred to Payoff Existing Debts: Enter estimated 

cancellation charges if the clients want to move to a Manulife one 

account prior to the renewal of some or all of their fixed term debts. (This 

may work out better for them, financially.) Enter $0. 

• Other: Enter $0. 

The Summary section shows the Net Effect of Savings and Transfer Costs. If 

savings exceed transfer costs, this amount will be deducted from the Manulife 

one initial borrowings. If transfer costs exceed savings, the amount will be 

added to the Manulife one initial borrowings. 

Cash Flow 

Click Next >> or the Cash Flow button to go to the Cash Flow category. This 

category has one associated tab, Cash Flow, with three sections on the screen: 

Income, Expenses, and Summary. 



Cash Flow 

Enter the clients' incomes in the Incomes section. 

Detail Incomes: If the clients have several sources of income, select this 

check box, then click the magnifying glass to go to a detailed income input 

screen. 

Incomes (monthly after tax): Enter the clients' regular monthly incomes. For 

the Hamiltons, enter $3,000 for Kerry and $2,700 for Janet. 

Periodic Incomes (average/month after tax): If clients receive any sporadic 

income throughout the year, enter the average amount (per month, after 

taxes). For the Hamiltons, enter $0. 

Accumulation details - Deposits accumulate for: Clients' incomes should 

remain in their Manulife one account for a specific number of days. Income 

left in the account reduces the amount of borrowings until it is spent, 

therefore reducing total interest charges. We will return to this section. For 

now, leave it set to 0 days. 

Enter the clients' expenses in the Expenses section. 

• Detail Expenses: Select this check box to enter a complete breakdown of 

monthly expenses, then click the magnifying glass to go to a detailed 

expense input screen. For the Hamiltons, leave this check box empty. 

• Expenses (monthly): Enter the clients' regular monthly expenses. Do not 

enter debt payments. For the Hamiltons, enter $2,100. 

• Periodic Expenses (average/month): If the clients have any expenses 

that occur sporadically throughout the year, enter the average amount (per 

month, after taxes) in this field. For the Hamiltons, leave this amount set 

to $0. 



Cash flow 

The Summary area at the bottom of the screen shows total income versus total 

expenses, and indicates if the clients currently have a surplus. This section 

helps you to validate their expense amounts. If it shows a large surplus that 

doesn't actually exist, the clients may have underestimated their expenses or 

forgotten to include a transfer to savings. If it shows a large deficit that 

doesn't actually exist, they may have overestimated their expenses or 

forgotten to deduct their monthly liability payments from their Expenses 

(monthly) amount. 

Index incomes - expenses amount by: This check box enables you to 

increase the gap between income and expenses, over time. For the Hamiltons, 

leave this at 0%. 

You have entered all the information necessary for the creation of a Concept 

Proposal. Turn to the next section to learn how to create a Concept Report. 


Concept report 


Proposal 

window 

After you have entered the concept portion of the case study, click OK to 

have the program run its calculations and prepare a report and graph. 

If the required Manulife one initial balance exceeds the calculated 

borrowing limit, the system presents a warning message and will not process 

the information. 

If the required Manulife one initial balance does not exceed the calculated 

borrowing limit, the following window will appear: 

This is the Manulife one Proposal window. It contains two tabs: Concept 

Report and Concept Report Graph. 

Print 

To print the contents of either tab, click the tab, and then click Print. 

You may want to print a copy of the Concept Report to use as a reference for 

the following explanations. Alternatively, you can use the scroll bars at the 

right side of the screen or the Page Up/Page Down keys to view the report onscreen. 

Edit 

To change any of the information you have entered, click Edit and the 

Manulife one Concept Settings dialog will reappear. Select the appropriate 

category and tab, and revise the displayed information as required. 


Concept report, Continued 

Concept Report 

The Concept Report provides a simple overview of the product features and 

structure. It compares Manulife one with the clients' current approach and 

walks clients through the consolidation of mortgages, loans, debts, and 

savings using the clients' actual numbers. It explains the inflow and outflow 

of cash, without numbers, and explains how the borrowings are repaid. 

The report also illustrates other debt reduction possibilities of Manulife one 

and explains some of the advantages of having a Manulife one account. 

The last page of this report outlines specific disclaimer notes that the client 

should know and understand. It is important that you review these notes with 

clients to ensure there is no misunderstanding as to what you have shown 

them. 

Concept Report 

Graph 

Click this tab to view a larger version of the Old Way vs. One Way graph 

shown on the second page of the Concept Report. The graph compares 

Manulife one with the clients' current practices. 


Concept report, Continued 

Options chart 

Option 

The Old Way 

Consolidation 

The following chart details the debt reduction possibilities of Manulife one: 

Explanation 

This is the way the client currently pays for debts. 

• Payments drop as debts are repaid. 

• Monthly Payment = current monthly payment. 

• Payment Reduction will always be "N/A". 

• All Debts Repaid In is the length of time until all debt is repaid. 

• Total interest is the sum of all interest payments on all debts for the 

duration of the debts. 

• Interest Saved will always be $0. 

This shows the effect of consolidating debts and short-term savings and 

applying the same payments as in The Old Way to the consolidated debt. 

• Balance = Current debts – current savings + transfer costs. 

• Payment is exactly the same as under The Old Way, dropping at the same 

times but usually ending earlier. 

• Monthly Payment will always be the same as The Old Way. 

• Payment Reduction will always be $0 as payments are the same. 

• All Debts Repaid In is the amount of time it takes the Manulife one 

account to pay off (usually less than The Old Way.) 

• Total Interest is the sum of all interest payments on the Manulife one 

account for the duration of the borrowings. 

• Interest Saved is the difference between Total Interest under The Old Way 

and Total Interest under Consolidation. 

The one Way This shows how Manulife one consolidates debts, increases the effectiveness 

of short-term savings and uses normal monthly cash flow to drive down debts 

quickly. 

• Monthly payment = Income – Expenses 

• All Debts Repaid In is the amount of time it takes the Manulife one 

account to be repaid based on the Manulife one rate and this monthly 

payment calculation. 

• Total Interest is the sum of all Manulife one payments while the debt 

exists – the initial Manulife one balance. 

• Interest Saved = Total Interest for The Old Way – Total Interest for The 

One Way. 


The proposal 

Introduction 

Once clients are interested in the concept of Manulife one, they will want to 

see a more detailed proposal that illustrates how their account would work. 

This will be especially true if they intend to add new borrowings, use subaccounts, 

or explore leveraging. We will continue the case study and develop 

a proposal. 

Changing 

Information 

If you need to change the information you entered on the Client Profile, 

Liabilities and Savings, or Cash Flow categories, click the appropriate 

category buttons and tabs to return to those screens and make your changes. 

one Account 

If you minimized the Manulife one Proposal window, double-click the icon 

to re-open it. 

Click Edit to reopen the One Account Concept Settings dialog, and click one 

Account. 

There are three tabs: 

• Manulife one Assumptions 

• Report Options 

• Pre-Qualifier 

one Account – 


Assumptions 

The Manulife one Assumptions tab is divided into three sections: 

• Manulife one account Assumptions 

• Account Information 

• Summary 


The proposal, Continued 



Assumptions 

In the Manulife one Assumptions section you can enter the information 

needed to set up the client's Manulife one account. 

• Current Value of Home: This amount is taken from the Client 

Information tab. 

• one Borrowing Limit: This amount is calculated by the program based 

on the market value and type of property. 

• Current Liabilities Less Current Savings: This amount is calculated 

from the information in the Liabilities & Savings category and includes 

Transfer Costs. 

• Monthly Administration Fee: The standard fee of $21 is automatically 

selected but there is an option that can be used to customize the fee 

amount should Manulife offer a special incentive to a specific client group 

or if the rate changes before a software update is released. 

• Monthly Cost of Other Planning Solutions: Enter the cost of other 

solutions you're recommending, or the portion (in dollars) of their cost 

savings that the clients will spend. For the Hamiltons, enter $450 on the 

assumption of new retirement savings and additional life insurance. 





Assumptions 

The Account Information section enables you to customize the structure of the 

clients' Manulife one account to meet their specific needs. The first row 

describes the clients' main Manulife one account. 

• Type: The program will automatically enter V or F for variable or fixed 

rates 

• Amount: For the Hamiltons, enter $140,150. 

• Rate: The current variable rate is locked at 6.5%. 

• Term: The Hamiltons want to be out of debt in 20 years, so enter 20. 

• Payment Method: This is locked at principal and interest. 

• Target Payment: This is calculated by the program. This amount will not 

be deducted from the account on the ledger — it is only used to determine 

if the clients can afford the recommended structure. 

This section also allows you to move some of the clients' borrowings into 

sub-accounts (Variable, Investment or Fixed) and add new borrowings, if the 

client has available borrowing room. Any sub-accounts are entered in the 

rows below the Main account. 

You should know: 

• Investment accounts default to Principal & Interest and never show as 

paid down (pay-down would happen when the corresponding investment 

is surrendered). The Target Payment on these sub-accounts is the interest. 

• Variable accounts can have the same or different term as the Main 

account (although you should question the need for a Variable account 

with the same Term). These sub-accounts have their own Target 

Payments. 

• Only one Fixed account is allowed, and it is restricted to a maximum of 

50% of the total borrowings. This account has its own Target Payment. 

For now, we will leave the borrowings entirely in the Main account. (We'll 

change this assumption shortly.) 

The Summary section contains Total and Total Target Payment fields. 

The program calculates the Total. It is the sum of all the account balances 

entered in the Amount column in the Account Information section. The Total 

cannot exceed the one Borrowing Limit. 

The Total Target Payment is the sum of all the Target Payments for the Main 

account and any sub-accounts plus the Monthly Administration Fee. The 

program will check if the Total Target Payment exceeds the clients' income 

less their expenses. If it does, the program will tell you that the clients cannot 

afford the recommended structure, and it will not process the proposal. If this 

happens, adjust the structure to lower the total Target Payment 




Report Options 

Click Next >> or Report Options to move to the Report Options tab. This 

tab consists of three sections: 

• Account Proposal Options 

• Leveraged Investment Assumptions 

• Manulife one Variable Rate Information 

Account Proposal Options allows you to select the Leverage Report if you 

have added investment accounts to the account structure. The leverage report 

provides two additional report pages that outline the advantages and risks of 

borrowing to invest. We will not be using this in our case. 

In the Account Proposal Options section you can also choose to add other 

pages to your report: the Other great benefits page and an Interest equation 

page. We will not be using these in our case. 

The options in the Leveraged Investment Assumptions section are only 

available when the Leverage Report check box is selected. If you want to use 

the Leverage Report, the system will need the information displayed here, 

particularly the Number of Years. We will not be using this in our case. 




Report Options 

• Current Manulife one Variable Rate: This text box displays the 

current variable interest rate you entered on the Client Information tab. 

• View History: Click this button to view the history of prime rates to show 

how these rates fluctuate from time to time. Manulife one variable rates 

will generally track to the prime rate used by the major banks, although 

the two rates will differ periodically. We will not be using this in our case. 

• Interest Rate on Credit Balance: This is the interest rate earned in the 

Main account once all Main account borrowings are repaid. This is 

required for the system to calculate the paying down of sub-accounts. 

Enter 4.0%. 


Pre-Qualifier 

Click Next >> or Pre-Qualifier to move to the Pre-Qualifier tab. 

The Pre-Qualifier tab can be used at any time. It identifies areas that may be a 

problem during the underwriting and credit approval process. 

The Pre-Qualifier examines three key areas: 

• Income & Financial: Can the clients reasonably afford the Manulife 

one required payments? 

• Credit History: Do the clients have a history of credit problems? 

• Property Information: Does the property have any characteristics that 

might make it difficult to sell in a forced-sale situation? 

See the Appendix for Manulife's current credit policy around these areas. 

The Income & Financial section is used to determine whether clients can 

afford the borrowing limit they are eligible for. 

• Purpose of Request: Select Refinance from the drop-down menu. 

• Requested Borrowing Limit: This amount defaults to the one 

Borrowing Limit on the Manulife one Assumptions tab. 

• Current one Variable Rate: This is the rate entered on the Client 

Information tab 

• Current Monthly Family Income (Gross): Enter $9,100. 

• Current Monthly Property Taxes (on principal residence): Enter 

$150. 

• The four debt balance amounts are only used if the clients will maintain 

any debts outside of their Manulife one account. Don't include debts that 

will be transferred to the Manulife one account. For this case, leave these 

fields at $0.00. 

• Monthly Heating Costs: Enter $75. 




Pre-Qualifier 

Credit History: 

• Judgement of Collection in last 7 years? Leave this check box empty. 

• Have you ever declared bankruptcy? The Hamiltons have never been 

bankrupt, so leave this box empty. 

• Lateness on Credit Cards/Loans/Mortgage Payments? They pay their 

debts regularly so select Never from the drop-down menu. 

The Property Information section reviews the clients' property to ensure it is 

within lending guideline requirements. See the Appendix for Manulife's 

current credit policy. 

• Value of Property: Defaults to the value entered on the Client 

Information tab. 

• Square Footage: Enter 1400. 

• Usage of Property: Select Single Family Dwelling from the drop-down 

menu. 

• Location of Property: Select Suburban from the drop-down menu. 

• Owner Occupied: The property is owner occupied, so select this option. 

• Insulated with UFFI: The property does not have Ureaformaldehyde 

Foam Insulation (UFFI), so leave this check box empty. 

• Well/Septic: The property is on municipal water services (as opposed to a 

well and/or septic system), so leave this check box empty. 




Pre-Qualifier, 

Continued 

Click Analyze to see if there are any problems. If the clients are within our 

guidelines, the following message appears (if there are problems, the message 

says so): 

Click OK to close the message and return to the Pre-Qualifier tab. 



Important 

notes 

The proposal follows the basic workings of Manulife one: 

• Incomes are deposited into the Main account, assuming that half will be 

deposited on the 1 st and half on the 15 th of the month. 

• Expenses are withdrawn from the Main account, half on the 1 st and half 

on the 15 th of the month. (If you enter a number in the Accumulate for 

field on the Cash Flow tab, it defers the expense withdrawals by that 

many days.) 

• Costs of other planning solutions and Manulife one administration fees 

are deducted at month end. 

• There should be a positive difference between incomes deposited and 

expenses withdrawn, called the surplus. 

• Main account, Investment account, Variable account, and Fixed account 

interest for each month is deducted from the surplus. 

• The balance is the amount of money available to pay down the 

borrowings. 

• This money is first applied to the structured Fixed account principal 

payment and then to the structured Variable account principal payments. 

• Any money left is used to reduce the borrowings in the Main account. 

• Once Main account borrowings are fully repaid, any money left is applied 

to pay down Variable account borrowings, beyond what has been setup. 

• Once the Main and all Variable account borrowings are fully repaid, any 

money left is applied to the Fixed account borrowings, subject to the 

maximum overpayment allowable (20% of the original fixed amount). 

• Any money left in the Main account that cannot be applied to the Fixed 

account accumulates in the Main account at the interest rate entered on 

the one Account – Report Options tab. 

To avoid any complications around Fixed and Variable account payments, 

the system will not allow you to run the proposal unless those payments are 

possible, given the clients' incomes and expenses, as previously discussed. 

You have entered all the information necessary for the creation of an Account 

Proposal. Turn to the next section to learn how to create proposal reports. 


Proposal reports 


Proposal 

window 

After you have finished entering the proposal information, click OK. The 

Manulife one Proposal window reappears, but now it has four additional tabs: 

• Account Proposal 

• Account Proposal Graph 

• Table 

• All Tables 

Print 

You can print any of these tabs by clicking the appropriate tab, and then 

clicking Print. 

You may want to print a copy of the Account Proposal to use as a reference 

for the following explanations. Alternatively, you can use the scroll bars at 

the right side of the screen or the Page Up/Page Down keys to view the report 

on-screen. 

Edit 

To change any of the information you have entered, click Edit and the 

Manulife one Concept Settings dialog will reappear. Select the appropriate 

category and tab, and then revise the displayed information as required. 


Proposal reports, Continued 

Account 

Proposal 

Click Account Proposal to view the Account Proposal report. This report 

provides a simple overview of the product features and structure as well as 

account details specific to the client. Graphs and charts are used to help make 

the information as understandable and useful to clients as possible. The report 

emphasizes the importance of seeking the advice of a financial planner and of 

monitoring the account and incorporating it into a complete financial plan. 

The last page of the report outlines specific disclaimer issues that the clients 

should know and understand. It is important that you review these notes with 

clients to ensure that there is no misunderstanding about what you have 

shown them. 

Account 

Proposal Graph 

Click Next >> or Account Proposal Graph to move to that tab. A graph is 

displayed here to illustrate how the borrowings in the Main account and in 

any sub-accounts will reduce over time under the proposed account structure. 


Proposal reports, Continued 

Table 

Click Next >> or Table to move to that tab. A ledger is displayed to illustrate 

the application of interest charges and the reduction of borrowings over time. 

It is a summary of the Main account and any sub-accounts as provided in the 

Account Proposal. 

All Tables 

Click Next >> or All Tables to move to that tab. Individual ledgers are 

displayed for the Main account and any sub-accounts to illustrate the 

application of interest charges and the reduction of borrowings over time. 


Additional proposals 

Introduction 

One of the key benefits of this software is the ease with which you can run 

alternative illustrations. In this section of the case study, we explore 

variations on the original proposal. 

Duplicate 

proposals 

To create a duplicate proposal, follow these steps: 

1. Click the button in the top right corner of the original proposal 

window to minimize it. A one proposal icon will appear next to the 

filing cabinet with the name of the proposal displayed beneath it. 

2. Right-click the proposal icon. 

3. Select Duplicate from the drop-down menu. A second Manulife one 

proposal icon appears on the screen with the same name as the original 

except for the #2 that has been added to the end. 

4. From the main menu bar, click Manulife one - Client Information. 

The Manulife one Concept Settings dialog box will open with the Client 

Information tab selected. 

5. Rename the duplicate (usually the name indicates the purpose of the 

illustration as in the scenarios that follow). You're now ready to make 

changes. 

Note: You can duplicate a proposal without minimizing it. Right-click the 

proposal's title bar instead of its icon, and then follow the procedure outlined 

above. 

Scenario # 2 

Try the following scenario: 

1. Duplicate the original proposal, and rename it Accumulating income. 

2. On the Cash Flow tab, change the Accumulate for field from 0 to 3 days. 

3. Click OK. 

The proposal now illustrates the same situation as the original proposal, but 

now the clients' income deposits remain in their Manulife one account for 3 

days before their expenses are withdrawn. Now explore the effect this change 

has on paying down the account. 


Additional proposals, Continued 

Scenario #3 

Try the following scenario: 

1. Make another copy of the original proposal, and rename it Fixed account. 

2. On the one Account - Manulife one Assumptions tab reduce the Main 

account by $40,000. 

3. Add a Fixed account of $40,000 at 7.75% for a period of 20 years. 

4. Click OK. 

The proposal now illustrates the same situation as the original proposal, but 

now the account has a fixed rate component. Now explore the effect this has 

on paying down account. 


Summary 

Summary 

We have reviewed the Manulife one Illustration System through a case study 

approach, but you have additional training resources available to you: 

• Each screen has help available; to access it, click the in the upper 

right corner of the input screen. 

• Details about the product can be found in your Advisor Guide and 

through the Training Modules on Repsource. 

• Your regional office can offer you support. 

Feedback 

We welcome your feedback. Please send your comments to your regional 

office management team or to: 

Wealth Management Team 

Head Office D/S 203G, Waterloo. 


Appendix 

Credit policy 

Introduction 

Manulife one is subject to Manulife Financial's credit policy. You will 

encounter the basics of this policy when you complete the one Account – 

Pre-Qualifier screen. This appendix explains some of the rules underlying the 

Pre-Qualifier. 

Rules 

underlying the 

Pre-Qualifier 

The Pre-Qualifier examines three key areas: 

• Income & Financial: Can the clients reasonably afford the Manulife 

one required payments? 

• Credit History: Do the clients have a history of credit trouble? 

• Property: Does the property have any characteristics that might make it 

difficult to sell in a forced-sale situation? 

Income & 

financial 

This area establishes two key underwriting criteria: 

• Does the Manulife one account balance requested fall within the 

borrowing limits available based on the market value of the property? 

The borrowing limit is set when you enter the required information 

around Manulife one General Assumptions on the Client Information 

tab. 

• Can the clients reasonably service their total debt payments? 

To determine this, the system uses the following formula: 

Manulife one minimum required monthly payment on the one 

Borrowing Limit 

+ Current Monthly Property Taxes 

+ Monthly payments on any debts that will be maintained outside the 

Manulife one account 

+ Monthly heating costs/condo fees 

= Debt service requirement 

If the debt service requirement exceeds 40% of the clients' gross income, 

they will be considered a poor risk (unless they can demonstrate 

significant assets). 


Credit policy, Continued 

Credit history 

This area looks for signs of past problems with credit, such as 

• bankruptcies within last seven years (bankruptcies beyond seven years do 

not show on credit bureau records and do not have to be disclosed) 

• court judgments to pay in last seven years 

• collection requirement in last seven years 

• frequency of late payment on credit cards, loans, or mortgage 

If any of the first three are true, or if the clients frequently make late 

payments, they will be considered poor credit risks. 

Property 

This area looks for potential problems with the marketability of the property, 

should a forced-sale be necessary, including 

• too high or too low a square footage 

• rural location 

• not owner-occupied 

• insulated with UFFI 

• well and septic water services 

If any of these are true, the property will be considered a poor risk, and a 

lower borrowing limit — or even a decline — may result. 

Exceptions 

If you or your clients feel that an application should be submitted despite a 

warning based on the pre-qualifier, you may submit it. Be aware, however, 

that the odds of a decline are high. Full details should be provided with the 

application, especially the reasons you feel an exception should be granted.

Illustration Guide - Repsource - Manulife Financial

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