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Hancock Says Insurance Sales Not Hurt By Estate Tax Changes

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NU Online News Service, June 12, 3:35 p.m. – John Hancock Financial Services, Boston, says it expects the new federal tax law will have little adverse impact on its insurance sales, despite its gradual elimination of the estate tax.

“We continue to expect life sales to grow 15% to 20% in 2001,” says Thomas E. Moloney, chief financial officer. “Our earnings per share growth target of 10% to 12% for the year also remains unchanged.

“In terms of the effect on earnings per share beyond 2001, in the past we’ve said that total repeal would impact us by only 3 to 4 cents annually after full repeal,” Maloney continues. “Consistent with that, we expect the effect of present legislation to be under 2 cents annually before any offsetting actions.”

However, he says he believes the legislation will likely moderate the company?fs sales of survivorship life insurance policies which are used in estate planning. “We expect to mitigate that effect through sales of single life, term life and corporate-owned life insurance, as well as through our ongoing collaboration with producers on new strategies for life insurance for a variety of protection and asset accumulation needs,” notes Moloney.

The Economic Growth and Tax Relief Act of 2001, which includes the changes in the estate tax law, doesn?ft change the need for consumers to have life insurance, adds Kathleen M. Graveline, executive vice president of John Hancock Financial Services.