DATE: May 27, 2016 Category TO: SUBJECT: Life Insurance Producers, Management, Office Administrators, and Technical Staff Introducing: Four New Universal Life (IUL) Insurance Products New Pacific Life IUL Products Offer LTC Rider, High Cap Account, and More! Administration Compliance Marketing Product Risk Selection Miscellaneous Effective May 27, 2016, Pacific Life unveils an entirely new lineup of indexed universal life insurance (IUL) products. 1,2 Four new IUL products provide financial protection through proceeds paid to policy beneficiaries at the insured s death and help meet a range of family, business, retirement, and estate planning needs. The new products will replace the existing IUL products, pending state approval. Check Lifeline.PacificLife.com for current state availability. We ve Got You Covered Four Products for a Range of Client Needs: FAMILY BUSINESS RETIREMENT ESTATE Protector 2 (replaces PIA Protector) Accumulator 5 (replaces Accumulator 4 2015) Performer LT 2 (replaces Performer LT) ENHANCEMENTS: Choice of Long-Term Care or Chronic Illness Rider In eligible single life IULs 3,4 Benefit Distribution Rider Optional in single life IULs 4,5 2% Interest Guarantee at Policy Termination Rider In single life IULs 4,6 1-Year High Cap Indexed Account New account with a 14% current growth cap rate and 0.80% annual policy charge 7 High Funding Potential New surplus premium load allows first year premium to exceed Pacific Life s prior limit of 10x Target Premium up to $3 million. Now the amount of premium exceeding the prior limit is assessed a surplus premium load. Improved Method for Policy Deductions Policy deductions will come from fixed account until depleted, then proportionately from all Indexed Segments at the same time, rather than depleting the 1-Year Indexed Account, then the 1-Year International Indexed Account, etc. For product details, go to Lifeline.PacificLife.com. Endnotes on pages 4-5. Estate Preserver 2 (replaces Indexed Pacific Estate Preserver) IMPORTANT NOTE: To Sell the Long- Term Care Rider, You Must Have: Life insurance license, Health insurance license, and State-specific pre-sale longterm care education. If you are not properly appointed and credentialed for the long-term care rider, you may not solicit sales for it. It is within your power to avoid the uncomfortable situation of having your client s application returned with all new signatures required. Plan ahead. Contact your licensing coordinator today. 16-VER-13 For Life Insurance Producer Use Only. Not for Use with the Public. Page 1 of 5
Administrative Notes Current state availability grid on Lifeline.PacificLife.com Illustrations available on Navigator, 5/27/2016 Sales materials available on Lifeline and SEEK, 5/27/2016 Use the new applications & forms, available by state on Lifeline, beginning 5/27/2016 IMPORTANT APPLICATION INFORMATION NEW Applications Required Beginning May 27, 2016, all applications for any new issue of a Pacific Life IUL product must use the NEW Application for Individual (or Joint) Life Insurance (Form #A15IUW). NEW Supplement to Applications Required If applying for the following riders or risk class: Premier LTC Rider, Accelerated Death Benefit Rider for Long-Term Care 3,4 Benefit Distribution Rider 4,5 NEW Additional Information & Health History Forms Use the new Additional Information Form #A15Al to include additional information to any application, questionnaires or supplemental applications Four new health history forms, formerly referred to as non-medical forms (Health History, Juvenile Health History, Children s Term 8, Waiver of Charges 9 ) Premier LTC Rider Pre-Sale Requirements To sell the Premier LTC Rider, life insurance producers must have the following prior to sale for each state in which they wish to sell the rider: Appointment with Pacific Life, Life insurance license, Health insurance license, and Completion of any state-specific long-term care education. $3 Million Maximum Issue Limit The total Pacific Life inforce chronic illness and/or long-term care coverage on any given insured may not exceed $3 million. If your client already has inforce coverage with Pacific Life for chronic illness or long-term care, contact your Pacific Life representative about your options before applying for a policy with Premier LTC Rider coverage. Discover the Pacific Life Difference at IULGameChangers.com 16-VER-13 For Life Insurance Producer Use Only. Not for Use with the Public. Page 2 of 5
Submission Guidelines Date 5/27/2016 Requirement To Apply for a New Single Life IUL Product with the Premier LTC Rider Include signed copies of: Product illustration including Premier LTC Rider Supplemental Illustration Report Application for Individual Life Insurance (form #A15IUW) LTC Rider Supplement Application (form #A15LCR) LTC Rider Personal Suitability Worksheet (form #M15PWR) HIPAA Authorization to Release Medical Information HIPAA Authorization to Obtain Medical Information Notices of replacement for Life and LTC Coverage (if applicable) W-9 Request for Taxpayer ID & Certification Form (or W-8 beneficiary version) Give to client: Life Disclosures Book, LTC Disclosures Booklet (CD), and any other applicable forms listed on the LTC Rider Supplement Application (form #A15LCR) Must acknowledge receipt by initializing the LTC Rider Supplement Application (form #A15LCR) 5/27/2016 Additional Underwriting Requirement for Insureds Age 65 and Older For formal applications and Tele-APP, insureds age 65 and older must complete a cognitive assessment as part of the underwriting process. Note: For insureds age 71 and older the Paramed Facility must be advised not to order the Med Plus, as it will be part of their cognitive assessment. If you are using the Tele-APP Life Ticket expedited process, please note that the Premier LTC Rider s additional underwriting requirement may require more than one phone interview for clients age 65 or older. To Apply for a New IUL Product without the Premier LTC Rider Signed illustration Signed A15IUW application Replacement paperwork and any applicable supplemental applications Transition Guidelines Date 6/10/16 Prior to Policy Issue or within 90 Days of State Availability Use NEW application & forms, available in Lifeline.PacificLife.com. Receipt of old form versions will result in delays and may require additional client signatures. Requirement To Request Existing IUL Product You may apply for an existing product, provided all applicable paperwork for the existing product is signed, dated, and received in the Life Insurance Division on or before June 10, 2016. To Request New IUL Product without the Premier LTC Rider on Pending Cases For in-flight cases, if the new product is desired, it must be requested in writing and a signed illustration for the new product must be submitted. For policies previously issued that would now like the new IUL product, the normal 90-day reissue requirements would apply, pending state availability. We will only process the old application form #A10IUW as long as the related medical 16-VER-13 For Life Insurance Producer Use Only. Not for Use with the Public. Page 3 of 5
examination is completed. Otherwise, a signed #A15IUW form, and any other associated forms, will be required at policy delivery. To Request New IUL Product with the Premier LTC Rider on Pending Cases For previously issued policies that would now like a new IUL product with the Premier LTC Rider, the normal 90-day reissue requirements would apply, pending state availability. All submission and underwriting requirements in the prior section must be completed and received within the 90-day window from original policy issue date. Endnotes: 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 coverage will expire. 1. Indexed Universal Life Insurance products do not directly participate in any stock or equity investments and are referred to as flexible premium indexed adjustable life insurance products in the contract. 2. Subject to state approvals, Protector 2 (Policy Form #P15IUL, S15PIAPR or ICC15 P15IUL, ICC15 S15PIAPR) replaces PIA Protector (Policy Form #P14PPR, P14PPR PP or ICC14 P14PPR, ICC14 P14PPR PP). Accumulator 5 (Policy Form #P15IUL, S15PIA5 or ICC15 P15IUL, ICC15 S15PIA5) replaces Accumulator 4 2015 (Policy Form #P14PPR, P14PPR P4 or ICC14 P14PPR, ICC14 P14PPR P4). Performer LT 2 (Policy Form #P15IUL, S15PIAP or ICC15 P15IUL, ICC15 S15PIAP form # based on state of policy issue) replaces Performer LT (Policy Form #P11PIP or ICC11 P11PIP). Estate Preserver 2 (Policy Form #P15SIL, S15IEP2 or ICC15 P15SIL, ICC15 S15IEP2) replaces Indexed Pacific Estate Preserver (Policy Form #P09IEP) as last survivor indexed adjustable life insurance. Form #s are based on product and state of policy issue. 3. The Premier Living Benefits Rider is an accelerated death benefit rider for chronic illness (Form #R12CII or ICC12 R12CII, based on state of policy issue). The Premier LTC Rider is an accelerated death benefit rider for long-term care (Form #R15LTC, R15LTC SP or ICC15 R15LTC, ICC15 R15LTC SP, based on state of policy issue). Eligible insureds for the Premier Living Benefits Rider and Premier LTC Rider are issue ages 18 75, subject to additional underwriting requirements and a one chronic illness or long-term care rider per insured issue limit. Riders are not available on Juvenile, Guaranteed Issue, or Simplified Issue policies, policies issued as a conversion from another policy (unless the rider was included in the original policy), or on policies with scheduled face amount increases. The Premier LTC Rider is not available on a policy with the Benefit Distribution Rider or the Premier Living Benefits Rider. 4. Riders will likely incur additional charges and are subject to availability, restrictions, and limitations. Clients should be shown policy illustrations with and without riders to help show the rider s impact on the policy s values. 5. Benefit Distribution Rider (form #R15BDR). If this optional rider is elected at policy issue, Pacific Life may reduce policy charges in the form of a non-guaranteed BDR credit. The rider s Periodic Payments of death benefit proceeds reflect a guaranteed, level 2% annual interest rate. If the rider is not elected, the beneficiary may elect periodic payments under an Income Benefit plan we make available to them at the insured s death that may credit a higher or lower interest rate than the rider s 2% guaranteed rate. However, the election of an Income Benefit plan at the insured s death will not result in any non-guaranteed reduction of policy charges while the policy is in force. Once elected at policy issue, the rider s payment elections may not be changed unless the policyowner is approved for an unscheduled face amount increase as specified in the contract. Exercising other available riders may adversely affect or limit the Benefit Distribution Rider. Nonguaranteed/current elements are not guaranteed by definition. As such, Pacific Life Insurance Company reserves the right to change or modify any of these elements. This right to change these elements is not limited to a specific time or reason. 6. 2% Interest Guarantee on Termination Rider (Form #R15IGT or ICC15 R15IGT, based on state of policy issue) is included with all policies at no additional cost. The rider guarantees an alternate accumulated value (AAV) that, if higher than the policy s actual cash value, will be used to determine the amount available at the insured s death, policy surrender, or help in preventing lapse. This AAV is calculated the same way as the policy s actual cash value but credits the current allocations among the fixed account, one-year indexed accounts, and loan account with 2% annual interest from the date of policy issue. This guarantee is based only on the policy s current allocations among the fixed account, one-year indexed accounts, and loan account and excludes any interest bonuses or indexed interest credits. 7. 1 Year Indexed Account 5 in the contract. The 1-Year High Cap Indexed Account guarantees a 4% minimum growth cap, 100% minimum participation rate, and 0% minimum annual interest crediting rate. Assesses an annual charge of 0.80% (~0.067% monthly) of the accumulated value allocated to the 1-Year High Cap Account as part of the policy s monthly charges. 8. Children s Term Rider (Form #R84-CT) is available for additional charge at policy issue. 16-VER-13 For Life Insurance Producer Use Only. Not for Use with the Public. Page 4 of 5
9. One of the following are available at policy issue for additional charge: Waiver of Charges Rider (Form #R84-WC), Owner Waiver of Charges Rider (Form #R84-OWC), or Payor Waiver of Charges Rider (Form #R84-PWC). Pacific Life Insurance Company, Newport Beach, CA 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 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. Pacific Life Insurance Company s individual life insurance products are marketed exclusively through independent thirdparty 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 broker-dealer or firm can help you determine which optional riders and investment options are available and appropriate for your clients. Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency Not FDIC Insured No Bank Guarantee May Lose Value 16-VER-13 For Life Insurance Producer Use Only. Not for Use with the Public. Page 5 of 5