How to Protect Your Life Insurance Policy With PIA Protector

Transcription

1 Jump on Board PIA Protector Flexible Premium Indexed Universal Life Insurance Client Brochure Pacific Life Insurance Company 15-5

2 1 PIA Protector Jump on Board Just as a single drop of water can become part of a mighty wave, so too can your incremental efforts amass into something larger. Start building greater financial security for your family or business today. Each premium you pay into your life insurance policy can help secure death benefit protection for your family or business should you die prematurely, plus provide the financial flexibility of cash value potential. PIA Protector 1 indexed universal life insurance offers you the ability to jump on board and catch your wave. In addition to death benefit protection, it offers guaranteed minimum interest crediting rates as well as the opportunity to earn a higher rate based in part on the performance of the S&P 500 index, (excluding dividends). 2 With flexible features, your policy may provide a lifetime of benefits as long as your policy remains properly funded. When the goal is long-term life insurance protection, consider a strategy that s flexible.

3 2 PIA Protector Protect what matters most to you with flexible, potentially lifelong life insurance protection in PIA Protector 1 indexed universal life insurance from Pacific Life. Life Insurance that s about YOUR LIFE 1 Choose your death benefit amount and payout structure (Death Benefit Options). See page 8. 2 Pay premiums when and in the amount you want, within policy limits. 3 3 Allocate the policy s cash value among your choice of a fixed account and two indexed accounts for tax-deferred growth potential. 4 5 Adjust your death benefit, premium payments, and account allocations to help meet your ongoing needs. Consider the flexibility cash value affords to potentially skip or suspend premiums or provide tax-free 4 income via withdrawals and potentially low-cost policy loans. 1 PIA Protector (Form #P14PPR, ICC14 P14PPR, P14PPR PP, ICC14 P14PPR PP form # based on state in which policy is issued) is flexible premium indexed universal life insurance. 2 This policy does not directly participate in any stock or equity investments. See back cover for index-related disclosure. 3 Indexed universal life insurance generally requires additional premium payments after the initial premium. If either no premiums are paid, or subsequent premiums are insufficient to continue coverage, it is possible that the policy will lapse and coverage will expire. 4 Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Sections 72, 7702(f)(7)(B), 7702A. Any policy withdrawals, loans, and loan interest will reduce policy values and may reduce benefits.

4 3 Rise with the Tide Indexed Interest Crediting Potential To help drive your policy s cash value growth potential, you may allocate your cash value among any combination of three accounts. The fixed account credits a current interest rate declared by Pacific Life. This rate is guaranteed to be no less than 2% annually. The indexed accounts offer higher interest crediting potential, using a formula that includes one-year gains in the S&P 500 index, excluding dividends. 5 Guaranteed Minimum Annual Crediting Rates 2% in Fixed Account 0% in All Indexed Accounts Fixed Account Credits current declared interest rate. Current rate is guaranteed for first policy year. 2% guaranteed annually. 1-Year Indexed Account Credits 100% (participation rate) of S&P 500 index s gains over each segment s 1-year term, not to exceed 10% Growth Cap; 0% guaranteed. 1-Year High Par Indexed Account Credits 150% (participation rate) of S&P 500 index s gains over each segment s 1-year term, not to exceed 9% Growth Cap; 0% guaranteed. The indexed accounts do not directly participate in any stock or equity investments. Indexes exclude dividends. A segment is created at each transfer into an indexed account. Interest is credited to each segment once it reaches the end of its one-year segment term. Guaranteed minimum growth caps of 3% in 1-Year and 2% in 1-Year High Par Indexed Accounts. Guaranteed minimum participation rate of 140% in 1-Year High Par Indexed Account. (1 Year Indexed Account 3 in the contract). 5 Each premium, less a premium load (net premium), is applied first to the fixed account. If net premiums remain in the fixed account, your policy will perform like a typical universal life insurance policy, crediting a current declared interest rate. For greater growth potential, you may choose to transfer money from the fixed account to any combination of the indexed accounts. Transfers may occur as frequently as the 15 th of each month on a current basis. Guaranteed: One transfer per quarter. In order to process a transfer, Pacific Life Insurance Company must receive policyowner s transfer instructions and funds must be available in the fixed account at least 2 business days prior to the 15 th of the requested transfer month. 6 Based on index fact sheet retrieved from standardandpoors.com Oct See back cover for index related disclosure.

5 4 The S&P 500 Index Widely considered the premier benchmark of U.S. stock market performance, the S&P 500 includes 500 leading American companies and represents approximately 80% of U.S. stock market capitalization. 6

6 5 A Sea of Possibilities Options for Protection and Flexibility Long-Term Life Insurance Protection for Your Family or Business Potentially Lifelong Coverage Properly funded, PIA Protector can provide a lifetime of coverage, plus the flexibility to increase or decrease your coverage amount, subject to certain eligibility requirements and policy limits. See page 8. Optional Guarantees An optional guarantee, selected when the policy is issued for additional cost, allows you to extend the policy s guaranteed life insurance protection beyond its standard guarantee of four to 20 years (duration varies by issue age) 7 up to any duration of your choosing including lifetime. 8 Cost Efficiencies for Multiple Policies With its specialized Guaranteed Issue and Simplified Issue GTCO risk classes available to cases with at least 10 policies, PIA Protector can be a part of a cost-effective multilife program for use with small businesses, including group term carve out (GTCO) or buy/sell business strategies. 7 Short-Term No-Lapse Guarantee Rider (Form #R02NL5) is issued at no additional cost with all policies except those issued with Death Benefit Option C (Return of Premium) or with insureds issue age 76 or older. Paying only the Short-Term No-Lapse Guarantee Premiums will guarantee the death benefit from 4 to 20 years, based on the insured s age at issue, but will not guarantee cash value accumulation. If you discontinue paying the Short-Term No-Lapse Premiums, the no-lapse feature will terminate before the guaranteed duration. Additional premiums will be required to continue the policy beyond the guaranteed duration. If policy loans or withdrawals are taken, additional premiums may be required to keep the no-lapse guarantee in force. 8 The No-Lapse Guarantee Rider (Form #R14FNL or ICC14 R14FNL form # based on state in which policy is issued), depending on how you structure your policy, has a maximum duration of the insured s lifetime, subject to certain limits. If your net no-lapse guarantee value is zero, the no-lapse feature terminates. If the no-lapse feature terminates, additional premiums would be required to resume the no-lapse guarantee. If policy performance is such that your policy is being maintained solely by the no-lapse guarantee, your policy will not build cash value. If policy loans or withdrawals are taken, additional premiums may be required to keep the no-lapse guarantee in force.

7 6 Plus... Flexibility for the Long Haul Flexible Premiums You set the amount and timing of the premiums you pay. As long as your policy has sufficient cash value to pay ongoing policy charges, your policy will stay in force, giving you the potential flexibility to skip or suspend premiums with sufficient cash value. Supplemental Income Potential You may enjoy tax-free 9 access to the policy s available cash value via withdrawals and low cost policy loans. 10 Added Policy Benefits Your policy offers optional benefits called riders 11 that can expand the flexibility of your policy. Some riders come standard with all eligible policies while others must be elected at policy issue for additional cost. See page 7 and the inside back pocket for additional information. Talk to your life insurance producer for additional information and to request a personalized illustration showing what PIA Protector can do for you. 9 Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Sections 72, 7702(f)(7)(B), 7702A. Any policy withdrawals, loans, and loan interest will reduce policy values and may reduce benefits. 10 Guaranteed interest charged to Standard Loans: 2.25% in all years. Guaranteed interest credited to policy s cash value, based on amount of Standard Loan: 2.00% guaranteed in all years (2.25% starting in policy year six on a current basis). Talk to your life insurance producer about Alternate Loans (Form #R10ALR), which are also available on your policy and credit indexed interest to loaned amounts and charge a current loan rate guaranteed to be no more than 7.5% annually. Alternate Loans may provide lower or higher net costs and carry greater risk than Standard Loans. 11 Riders will likely incur additional charges and are subject to availability, restrictions, and limitations. When considering a rider, request a policy illustration from your life insurance producer to see the rider s impact on your policy s values.

8 7 Anticipate the Next Set Additional Policy Benefits 12 STANDARD Included with the policy Conversion in Year Eight The Conversion Rider allows you, in the eighth policy year, to convert to a new eligible Pacific Life policy without having to submit new evidence of insurability or incur surrender charges on the original policy. Rider Form #R06CON. Terminal Illness Benefits The Terminal Illness Rider allows the policyowner to accelerate 75% of the death benefit, not to exceed $250,000, if the insured is diagnosed as terminally ill (12 months or fewer to live). 13 Rider Form #R12TII or ICC12 R12TII (form # based on state in which policy is issued). Request a personalized illustration for additional details. OPTIONAL Available at policy issue for additional cost Add Term Life Insurance on Any Member of Your Immediate Family Annual Renewable Term Rider Additional Insured (Form #R08RTA) Children s Term Rider (Form #R84-CT) Increase Your Death Benefit without Additional Underwriting Guaranteed Insurability Rider (Form #R93-GI) Varying Increase Rider (Form #R14VIR or ICC14 R14VIR form # based on state in which policy is issued) Help Keep Policy In Force in Event of Disability Disability Benefit Rider (Form #R84-DB) Waiver of Charges Rider (Form #R84-WC) (also available in Owner and Payor variations; form #R84-OWC and R84-PWC, respectively) Help Protect Heavily Loaned Policies from Lapse in Later Years, for Qualifying Policies Overloan Protection II Rider (Form #R08OLP) is subject to eligibility requirements both to qualify for and exercise the rider and a one-time charge applies to exercise it Riders will likely incur additional charges and are subject to availability, restrictions, and limitations. When considering a rider, request a policy illustration from your life insurance producer to see the rider s impact on your policy s values. 13 Benefits paid by accelerating the policy s death benefit may or may not qualify for favorable tax treatment under Section 101(g) of the Internal Revenue Code of Tax treatment of an accelerated death benefit may depend on factors such as life expectancy at the time benefits are accelerated, the amount of benefits, the amount of qualified expenses incurred, or if similar benefits are being received under other contracts. Tax laws relating to accelerated death benefits are complex. Receipt of accelerated death benefits may affect eligibility for public assistance programs such as Medicaid. Clients are advised to consult with their qualified and independent legal and tax advisors for more information. 14 The potential tax consequences of the Overloan Protection II Rider have not specifically been ruled on by the IRS or courts. Clients should consult their tax advisors.

9 8 Adjust Your Coverage Amount Choose a life insurance coverage amount (death benefit) based on your current needs. If your needs later change, you may increase your coverage subject to underwriting approval ($25,000 minimum) or decrease it to as little as $1,000 after the first policy year. You may also switch between the following Death Benefit Options as often as yearly, subject to policy limits: A (Level) B (Increasing) C (Return of Premium) Death benefit equals the policy s Face Amount. Death benefit equals the policy s Face Amount plus the accumulated value. Death benefit equals the policy s Face Amount plus all premiums paid, less any policy withdrawals. 15 Your Policy s Charges The cost of the life insurance and benefits provided through the policy is deducted monthly in the form of policy charges, which include an Administrative Charge, Coverage Charge, Cost of Insurance Charge, and any applicable rider charges. Additionally, a premium load is deducted from each premium payment. To understand how the policy charges will affect your policy s cash value, request a personalized illustration that includes the Analysis of Charges report. 15 The maximum issue age for Death Benefit Option C is 80. The maximum Death Benefit calculated will not exceed the amount shown in the Policy Specifications as the Option C Death Benefit Limit except as described in the Death Benefit Qualification Test, Tax Qualification as Life Insurance, and Modified Endowment Contract Tax Status sections of the Policy.

10 9 About Pacific Life POLICYOWNER SATISFACTION. FINANCIAL STRENGTH. Since 1868, Pacific Life has been helping to protect individuals and families from financial risk, providing the Power to Help You Succeed through a variety of life insurance, annuities, mutual funds, and investment products and services. Pacific Life s organization is relatively unique as we are part of a mutual holding company structure. This allows us to make decisions that benefit our clients and the long-term strength of the company rather than focus on a publicly traded stock price. At Pacific Life, we believe a product is more than its illustrated policy values. It s a commitment forged with the life insurance company that issues it. When you buy a life insurance policy from Pacific Life Insurance Company, you become a voting member of the Pacific Mutual Holding Company, so decisions made in support of our overall financial strength are also made with the policyowners best interests in mind. We take this commitment to our policyowners seriously, as shown in our history of honoring and passing along over 120 cost improvements to the non-guaranteed elements of our existing policies over time.

11 10 Buying life insurance is a long-term commitment. The company you choose matters.

12 This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life Insurance Company, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor. About the index used in PIA Protector s indexed accounts: S&P 500 index The S&P 500 Index is a product of S&P Dow Jones Indices LLC ( SPDJI ), and has been licensed for use by Pacific Life Insurance Company. S&P and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Pacific Life Insurance Company. Pacific Life Insurance Company s Products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index. Pacific Life Insurance Company Newport Beach, CA (800) Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product availability and features may vary by state. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Non-guaranteed elements are not guaranteed by definition. As such, Pacific Life Insurance Company reserves the right to change or modify any non-guaranteed element. This right to change non-guaranteed elements is not limited to a specific time or reason. Pacific Life Insurance Company s individual life insurance products are marketed exclusively through independent third-party life insurance producers, which may include bank affiliated entities. Some selling entities may limit availability of some optional riders based on their client s age and other factors. Your life insurance producer can help you determine which optional riders are available and appropriate for you. Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency Not FDIC Insured No Bank Guarantee May Lose Value /15