Marketing SUBJECT: Introducing: Pacific PremierCare Advantage, Universal Life Insurance with Product Risk Selection Miscellaneous

Transcription

1 DATE: April 29, 2013 Category Administration TO: Life Insurance Producers, Management, Office Administrators and Compliance Technical Staff Marketing SUBJECT: Introducing: Pacific PremierCare Advantage, Universal Life Insurance with Product Long Term Care Benefits Risk Selection Miscellaneous Introducing: Pacific PremierCare Advantage, Universal Life Insurance with Long Term Care Benefits Unplanned for, long term care costs can erode retirement assets and impact the lifestyle your clients are able to enjoy in their retirement years. Consider that the average U.S. annual nursing home cost is currently $85,000 a year and will more than double over the next 20 years. 1 Help defend clients retirement assets against the rising cost of care with Pacific PremierCare Advantage Universal Life Insurance with Long Term Care Benefits, 2 available beginning May 13, This product includes all the same benefits as its predecessor, Pacific PremierCare 3, including: 2 to 8 Years of Long Term Care Reimbursements 4 and a Choice of Inflation Benefit Options 5 (5% Compound, 5% Simple, or 3% Simple Interest). Broadly Defined Couples Discount Applies for policyowners who are married or in state sanctioned civil unions or domestic partnerships. 6 Care Coordination at No Additional Charge 7 Simplifies claims process and alleviates stress for the family by providing support in coordinating care for the insured. Flexible Policy Uses Money back option (Return of Premium Benefit) or Death Proceeds paid to beneficiaries if long term care not needed. 8 Attractive Design No taxation at surrender unless there is gain in the policy, or the policy is issued as a 1035 Exchange. 9 Cash Benefit for International Services Not a reimbursement as it may be in some other long term care products. 10 What s Different in Pacific PremierCare Advantage? This product has a price increase due to the low interest rate environment. Quote output now shows an internal rate of return (IRR) for premium to Long Term Care Benefits. Quote also shows policy values up to insured s age 121, even though policy charges cease at age 95. In AZ, MD, OR, and MA, the longterm care benefit duration will never be less than elected due to stateimposed limitations on benefit amounts in these states. 11 Dedicated Sales Support Contact the LTC Sales Desk at (855) or [email protected] for help prequalifying a prospect, running a quote, checking licensing requirements, or submitting a ticket. Effective May 13, 2013, Pacific PremierCare Advantage will replace Pacific PremierCare, subject to state approvals. Beginning May 13, 2013, Pacific PremierCare will no longer be offered for solicitation in states that have approved Pacific PremierCare Advantage. We will begin accepting Pacific PremierCare Advantage applications and policies may begin being issued and paid on May 13, MKT13-94 Page 1 of 5

2 State Approvals As of May 13, 2013, Pacific PremierCare Advantage is available for sale in all states except CA, CT, DC, FL, HI, IN, MT, NV and New York. Transition Guidelines Tickets must be signed and dated before 5/13/2013 and received in the Life Insurance Division by 5/31/2013 to retain the Pacific PremierCare product. Tickets signed and dated on or after 5/13/2013 will be changed to the Pacific PremierCare Advantage product and will require a new quote. Marketing Materials To order the following items, contact your Pacific Life representative, go to Lifeline.Pacificlife.com, or call the Marketing Order Desk at (800) ext For Client Use Order Code Core Story Client Worksheet Get the conversation started with your client Client Guide Overview of product benefits and features Pre Interview Worksheet Help clients gather the necessary information for their 45 minute phone interview For Life Insurance Producer Use Order Code Sales Guide 5 Steps to Completing a Sale in Good Order Product Description Page Fact sheet Rates & Values Book In depth product description with technical details Pre Qualifying Questionnaire Questions to ask your client before applying Point of Sale Checklist If applying in paper, check your submission against this for accuracy Navigator Quote Software Pacific PremierCare Advantage is available in the most recent version of Navigator, available on Lifeline.Pacificlife.com. The issue state selected will determine which version of Pacific PremierCare is available it will be either Pacific PremierCare or Pacific PremierCare Advantage, depending on state approvals. To make sure you are using the most recent Navigator version, select Help Check for Updates. Contact the LTC Sales Desk for help applying at (855) or [email protected]. Submission Guidelines Pacific Life Will Begin Accepting Pacific PremierCare Advantage Tickets on May 13, 2013 See the Point of Sale Checklist # For questions, see below. Resource and Contact Information LTC Sales Desk (855) [email protected] Or log in to Lifeline at MKT13-94 Page 2 of 5

3 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. Endnotes: 1 Source: 2012 Sourcebook for Long Term Care Insurance, American Association for Long Term Care Insurance. Assumes $85,000 a year compounded annually at 3.95%, which is the average annualized increase of U.S. nursing home costs from 1994 to Pacific Life Insurance Company s Pacific PremierCare Advantage (Policy Form #P12PPC or ICC12 P12PPC policy form # based on state in which policy is issued) is a flexible premium adjustable life insurance policy with long term care insurance payable through reimbursements. Pacific PremierCare Advantage is not a Partnership Qualified product. For more information on Partnership Qualified products, please contact your state department of insurance. Pacific PremierCare is intended to provide federally tax qualified long term care insurance as defined in IRC Section 7702B(b). If there are any questions concerning the tax implications of this product, qualified and independent legal and tax advisors should be consulted. Pacific PremierCare Advantage is subject to underwriting and approval of the application. No medical exam is required, but a Medical Information Bureau (MIB) and prescription report will be ordered and a Personal History Interview and Cognitive Assessment will be performed via telephone as part of the underwriting process. 3 Pacific Life Insurance Company s Pacific PremierCare (Policy Form #P11PPC or ICC11 P11PPC policy form # based on state in which policy is issued) is a flexible premium adjustable life insurance policy with long term care insurance payable through reimbursements. 4 Reimbursements for covered long term care expenses are subject to an elimination period and are provided by the Accelerated Benefit Rider (ABR) for Long Term Care (Form #R12ABR or ICC12 R12ABR) and the Extended Benefit Rider (EBR) for Long Term Care (Form #R12EBR or ICC12 R12EBR). (Rider form numbers vary based on state in which policy is issued.) The amount and duration of the maximum long term care benefits will be based on the benefit options elected at time of application. Coverage elected for longer than two years is only provided through a combination of ABR and EBR. Actual amount and duration of long term care benefits will vary based on the use of policy benefits and features. Covered long term care expenses will be reimbursed until the total long term care benefits are exhausted, which may vary from the elected duration. Premiums for long term care benefits will vary depending upon the benefit options elected. Charges for ABR, EBR, and any Inflation Benefit Option are included in the initial premium payment. Only one premium is necessary to fund Pacific PremierCare Advantage. While this product allows additional premiums, they are not required and do not provide additional Long Term Care Benefits, a greater Return of Premium Benefit, or increased Death Proceeds (unless a subsequent increase in the policy s cash value requires a death benefit increase to satisfy IRC Section 7702 requirements). A premium load will apply to each premium payment. Once a sufficient premium has been paid, the long term care coverage will continue as long as the insured lives; or until the policy is surrendered at the owner s request; or until the maximum long term care benefits have been paid; or until policy lapse. Policy charges (cost of insurance and coverage charges) are deducted from the policy s accumulated value on a monthly basis. Policy lapse will only occur where the policy s cash value less policy debt is not sufficient to cover monthly policy charges. Prior to lapse, the policy provides 61 days to pay premium sufficient to keep the policy in force. 5 Policyowners may choose no Inflation Benefit Option for a monthly maximum long term care benefit that does not increase. Inflation Benefit Options must be chosen at policy issue. Once elected, the inflation benefit option chosen is in effect for the life of the policy. 6 The Couples Discount is not available in Montana. Individuals in Montana may be eligible for a Household Discount based on their existing living arrangements. 7 Pacific Life Insurance Company provides Care Coordination Services at no additional charge. Policyowners may choose to use Care Coordination Services outside of Pacific Life Insurance Company's, but benefits paid out for such services will reduce the total long term care benefits and are subject to the maximum monthly benefit. 8 Policy benefits are reduced by any policy loans, withdrawals, or terminal illness benefit paid under the policy. Death Proceeds and Return of Premium Benefit will be reduced when long term care benefits are taken. MKT13-94 Page 3 of 5

4 9 Reportable gains may arise in some situations. If a policy is surrendered for greater than its return of premium benefit or if the policy was issued by 1035 exchange and the prior policy had gains, reportable gains will occur. Policies are expected to be Modified Endowment Contracts, and any withdrawals, loans or certain other distributions would be reportable income to the extent of gain, and possibly subject to a 10% penalty tax. Consult your tax advisor for more information.. 10 International Benefits (for nursing home care received outside the United States only) are not limited to the cost of care and are paid at a rate equal to the monthly maximum long term care benefit for up to 24 months. No other long term care benefits are payable in a month in which International Benefits are payable. 11 Covered long term care expenses will be reimbursed until the total long term care benefits are exhausted, which may vary from the elected duration. The monthly amount reimbursed is the cost of the covered long term care expenses actually incurred, which may be less than the Monthly Maximum Benefit. The Monthly Maximum Benefit may be pro rated based on the actual number of days the insured is chronically ill or confined to a facility. The benefit duration may be longer than elected if the insured s cost of care is less than the Monthly Maximum Benefit. The duration may be shorter than elected if the insured receives reimbursement for Caregiver Training, Home Modification, or Durable Medical Equipment in addition to other covered services reimbursed in the same month. In such a situation, the combined total of reimbursements may exceed the Monthly Maximum Benefit and thereby shorten the benefit duration over which the remaining total available benefits may be reimbursed. In certain states (Arizona, Massachusetts, Maryland, and Oregon), the combined total of reimbursements in any given month may not exceed the Monthly Maximum Benefit, including reimbursements for Caregiver Training, Home Modification, or Durable Medical Equipment. Accordingly, in these states, the benefit duration will not be less than elected. Taking withdrawals or terminal illness benefits will reduce the Monthly Maximum Benefit and total benefit amount available, but will not shorten the benefit period to be less than elected. Exclusions, Exceptions, and Limitations: We will not pay benefits for any room and board, care, treatment, services, equipment, or other items for care or services: 1) provided by the Insured s Immediate Family unless he or she is a regular employee of an organization which is providing the treatment, service or care; and the organization receives the payment for the treatment, service or care; 2) for which no charge is normally made in the absence of insurance; 3) provided outside the United States of America, except as described in the International Benefit; 4) that result from an attempt at suicide (while sane or insane) or an intentionally self inflicted injury; 5) provided in a government facility (unless otherwise required by law); 6) for which benefits are available under Medicare (including amounts that would be reimbursable but for the application of a deductible or coinsurance amount) or other governmental program (except Medicaid), any state or federal workers compensation, employer s liability or occupational disease law, or any motor vehicle no fault law. No benefits will be paid for services received while the Accelerated Benefit Rider (ABR) for Long Term Care and the Extended Benefit Rider (EBR) for Long Term Care are not in force. 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 fixed subaccount crediting rates, are backed by the financial strength and claims paying ability of the issuing insurance company. 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. MKT13-94 Page 4 of 5

5 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 firm or broker dealer can help you determine which optional riders are available and appropriate for your clients. MKT13-94 Page 5 of 5