John Hancock Long-Term Care Buyout Offer: How the Cash Offer Works and Who Should Take It

If you own an older John Hancock long-term care policy, your rate-increase packet may include an option called the LTC Buy-Out Offer and Policy Termination Option: a one-time check in exchange for ending your coverage for good. John Hancock's actuarial memo in Virginia gives the formula. The check is 50% of the benefits John Hancock expects to pay you over the rest of your life, valued in today's dollars. After subtracting the premiums you would stop paying, John Hancock's own two examples come to 60 and 67 cents for each dollar of expected value you give up.

That formula also tells you who should be most wary of the offer. Because the payment grows with the benefits John Hancock expects to pay you, the biggest checks go to the policies the company expects to pay out the most on. This page covers who is eligible, how the amount is calculated, how it compares with the paid-up option in the same packet, and the deadline, reversal and tax rules in the filed forms. Everything comes from John Hancock's filings with the Virginia Bureau of Insurance and the other sources listed at the end.

Compare your offer in the LTC buyout calculator →

Why this is landing in mailboxes now

John Hancock is still sending out rate increases from its 2022 round, a few states at a time. Its October 20, 2026 notice to agents says that in late October it begins mailing policyholders in Louisiana, Montana, Nevada, Rhode Island and Wyoming, for policy anniversaries on or after February 1, 2027. It is also continuing capped or phased-in increases in Connecticut, Hawaii, North Carolina and Texas. Our guide to who gets a 2027 John Hancock letter covers that schedule.

The buy-out offer came in with the same 2022 round. In John Hancock's Virginia filing, the list of policyholder options labels it "(New)". It comes only with a rate increase, and only in states that approved it. John Hancock's own FAQ says it is offered "in states in which the offer was filed and approved by the state." The agent notice doesn't say which of the new packets include it. If yours does, it appears on the Options Worksheet (option 5 in the sample packet) and comes with its own election form.

Who gets the offer

The filing sets four conditions, and the age rule is the one most often misread. The offer is "available on policies issued prior to age 70, which are active, premium-paying policies with an approved rate increase." Your age when you bought the policy is what counts. A 75-year-old who bought at 60 qualifies; a 72-year-old who bought at 70 does not. That fits the case of a John Hancock policyholder who wrote to columnist Terry Savage in 2025. Her husband, 75, had been offered about two-thirds of what the couple had paid in premiums.

• Paid-up policies don't get it. The offer is limited to policies still paying premiums.
• Spouses get separate offers. John Hancock's FAQ says a spouse with the same product who is getting the increase and meets the issue-age rule will receive an offer, "though it will likely differ in offer amount." Offers come with rate-increase letters, so spouses can receive them at different times.
• People on claim are handled later. A footnote in the memo says policyholders on claim who later come off claim get the offer when their rate increase arrives, valued as of their return to active status.
• Union LTCI (Fortis) policies: John Hancock administers these, and they are part of the same mailing rounds. We found no filing that shows a buy-out offer on them. Check your own packet.

How John Hancock calculates the check

The formula is short: a fixed percentage of what John Hancock expects to pay you. Addendum #3 to the actuarial memorandum John Hancock filed in Virginia, dated March 20, 2024, says the offer for each person is "a Buy-out Factor (50%) multiplied by the best estimate actuarial present value of expected future benefits payable under their policy," using the same expected benefits as John Hancock's reserve calculation, "discounted at 5.75% annually." The 50% factor and the method are the same for everyone covered by that filing in the state. Your own amount still varies with your "product features and riders, benefit amounts, inflation type, policy duration, age at policy issue, sex, and risk class."

The memo includes two illustrative policies. Each has paid $10,000 in premiums. We added the last two columns, using the memo's own figures:

Sample	Expected future benefits	Expected future premiums	Offer (50% of benefits)	Benefits minus premiums	Offer as share of that
Policy 1	$18,000	$3,000	$9,000	$15,000	60%
Policy 2	$12,000	$3,000	$6,000	$9,000	67%

Read the table from left to right. If you keep Policy 1, John Hancock expects, on average, to pay out $18,000 in today's dollars and to collect another $3,000 in premiums from you. So the policy is worth $15,000 to someone like you, by the company's own estimate. The offer is $9,000. Neither sample offer returns the $10,000 already paid in premiums.

A note on "65%". In September 2023, the Bureau's consulting actuary summarized the offer as "65% of the gross premium valuation reserve." John Hancock's revised memo, filed six months later, gives the 50%-of-expected-benefits formula above. In its two samples, that works out to 53% to 55% of the reserve. We treat the later company memo as the controlling description for that filing. Other states may have approved different terms. Your letter shows your actual amount; if it doesn't, the worksheet footnote says to call 844-272-7842 to ask.

The bigger the check, the more the company expects to pay you

The formula means a large offer is a warning sign as much as a reward. The check is a fixed share of the benefits John Hancock expects to pay you, so it grows as that expected cost grows. The offer goes up when you are older relative to when you bought, when inflation protection has built your daily benefit up over 15 years, or when you have a long or lifetime benefit period. Those are also the policies that would be most expensive to replace and most likely to pay off.

John Hancock says so in its filing: "We anticipate that policyholders who expect to use their benefits in the future will not accept this offer." Its "Important Things You Should Consider" sheet adds that payouts "may be less costly to us than continuing to guarantee the benefits and it may enable the Company to reallocate capital."

The estimate also has a blind spot that matters more than the 50%. It is a best estimate for people with your age at issue, sex, risk class and policy. It reflects the health you had when you applied, not the health you have now. A recent diagnosis, a fall, early memory changes, or a parent who needed years of care all point to a higher chance of claiming than the company's average. If any of those apply, the offer is lower for you than the table suggests. If you are in excellent health and could pay for care yourself, the trade is closer.

Compare it with the paid-up option in the same packet

The same packet usually includes another way to stop paying premiums, and it should be read next to the check. In the Virginia filing, the paid-up option converts the policy on the rate-increase date to a policy that needs no more premiums. Its new benefit pool is "the lesser of the current policy limit and 150% of premiums paid, less any claims paid." Optional riders end, and inflation increases stop.

Take sample Policy 1 again. The buy-out pays $9,000 in cash. The paid-up option keeps up to $15,000 of benefits, but only for care, and only if you ever need it. The two aren't the same kind of value. Cash can be spent on anything, and the pool is worth nothing if you never claim. If you are giving up the premiums anyway, though, set the size of the check against that pool. The filing also says John Hancock will extend contingent nonforfeiture to everyone whose increase reaches the trigger, "even if it was not otherwise required in your State." Our walk-through of the options in a rate-increase letter covers the benefit cuts, including John Hancock's Shared Cost option and lower inflation rates.

What you give up, and the rules in the filed forms

• All riders end, including ones that protect your spouse. The filed sheet names the SharedCare Benefit Rider, the FamilyCare Benefit Rider and the Survivorship & Waiver of Premium Benefit Rider. If you and a spouse share benefits, taking the check can shrink what is left for the other person. Talk to them first.
• No claims for past care, either. The election form says John Hancock will have "no liability for any benefits or claims under my LTC policy, including claims for benefits related to prior and future services." File any open claim before you sign.
• Partnership protection is lost. If yours is a Long-Term Care Partnership policy, the sheet warns you "will generally no longer benefit" from the Medicaid asset protection that comes with it. See our explainer on Partnership asset protection.
• You have 30 days to change your mind, but you must repay. To restore the policy, John Hancock must receive the full offer amount and any premium refund within 10 days of your request to reverse. After 30 days from termination, the decision is final.
• The deadline is earlier than the anniversary. In the sample packet filed in Virginia, the election form was due about a month before the policy anniversary. The form says that if you miss the deadline and then stop paying, "your policy will lapse pursuant to its terms and you will not receive the LTC Buy-Out Offer Amount." The check is mailed within 10 business days of termination, along with a refund of any premium paid past the termination date.
• Part of the check may be taxable. John Hancock will issue a Form 1099 for any amount above your total premiums paid. The filed form adds that your taxable income may be higher than the 1099 shows "if you deducted premiums from your taxable income or if you previously excluded" employer-paid premiums. Both of John Hancock's samples and the Savage reader's offer came in below premiums paid, and in that case the 1099 rule above reports no taxable amount. Check your own numbers before you sign. More in how LTC insurance is taxed.

Who should consider taking it, and who should keep the policy

The decision comes down to whether you know something about your future care that John Hancock's averages don't capture. If you do, it usually favors keeping the policy.

The check tends to make sense if

• You were going to let the policy lapse anyway because the new premium is unaffordable, and none of the reduced-benefit options work for you. In that case the check is money you would otherwise give up.
• You have enough savings to pay for a long stay in care yourself and would rather stop paying premiums for good.
• Your benefits are small compared with today's care costs. An example is a short benefit period with no inflation rider, where the policy would cover only a small part of a long claim.

Keep the policy, or take a reduced or paid-up option, if

• Your health has changed since you applied, or your family has a history of long care needs.
• You bought inflation protection years ago and your daily benefit has grown well above what you started with. That built-up benefit can't be bought back.
• You share benefits with a spouse through a SharedCare or survivorship rider.
• Yours is a Partnership policy and Medicaid could come into the picture later.

Before the deadline, put your offer, current premium and benefits into the LTC buyout calculator. It shows the cash after tax next to what keeping the policy would cost. For free, unbiased counseling, contact your State Health Insurance Assistance Program at shiphelp.org. The general case, across all carriers, is in the LTC buyout offer: how to weigh the cash against keeping your policy. Transamerica's version uses a different formula; see Transamerica's buyout offer. For the increases behind these letters, see the John Hancock rate history and the John Hancock carrier file.

Questions readers ask after the letter

I'm over 70. Can I still get the offer?

Yes, if you bought the policy before age 70. The rule in the filing is based on issue age, not your current age.

If I say no now, will John Hancock offer it again?

Probably not. The memo says: "We do not anticipate making this LTC Buy-Out Offer and Policy Termination Option available again to these insureds should additional rate action be required at a later time."

Can John Hancock cancel my policy if I turn the offer down?

No. The filed FAQ says: "we cannot cancel your policy as long as you continue to pay the required premium."

Why does my offer differ from my spouse's?

Each offer is 50% of the benefits John Hancock expects to pay on that person's policy. That depends on age at issue, sex, risk class, benefits and inflation rider, so two spouses with similar premiums can receive quite different amounts.

This is analysis of public regulatory filings and other records, not legal, tax or insurance advice. Your letter and your policy control, and terms approved in your state may differ from the Virginia filing described here.