Pacific Life Insurance and Financial Ratings

Pacific Life has been providing insurance products since 1868 and the end of the Civil War. They are a well known and are highly visible in North America, noted for the whale in their logo and commercials. AM Best gives Pac Life an ‘A+’ for financial strength, which is a superior rating. Standard and Poor’s rates them with an ‘A+’ or strong rating when compared to other companies. Fitch also feels Pac Life is strong, giving them an ‘A+’ rating for financial strength and ability to meet obligations to policy and contract holders. Moody’s rates them as good, giving an ‘A1’ rating.

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Variable Universal Life: An Industry Leader

Pacific Life is among the industry leader with its variable universal life policies and index UL’s. Their policies are named with purposeful labels, clearly defining the priority of each policy type. The first example is the Pacific Select Estate Preserver VI, which is designed for estate and wealth preservation and transfer. This policy will maximize the cash accumulation goals and utilize the tax benefits of insurance to preserve the legacy for beneficiaries.

Pacific Life also offers two VUL policies designed with business owners and key persons in mind. The Pacific Select Exec IV and Exec V can serve as a kind of ‘super Roth’ for business owners that typically earn too much to participate in Roth IRA’s.

Indexed Universal Life Insurance Choices

The ‘indexed’ version UL’s are also aptly named by Pacific Life. The Pacific Estate Preserver is designed for wealth preservation and transfer; the primary difference being the investment is an index style account rather than managed money.

The Pacific Indexed Accumulator III is the accumulation focused option. This policy type will maximize cash value which can supplement income later in life. Through policy loans from the cash value, which simply reduce the death benefit when not repaid, the loans can become a tax friendly vehicle for many families.

Pacific Life does offer some exceptional participation rate and growth cap ranges. They currently offer 100% and even 105% participation rates with NO CAP on growth. If participants choose to implement a 3% minimum guaranteed rate, the policy will implement a 12% maximum growth cap for that year. The ‘High Par 5-Year Indexed account’ is the option offering a 105% guaranteed participation rate. It has no cap for growth and a minimum guaranteed 15% over five years (cumulative basis).

Universal Life Insurance Policies

Pacific Life has three options for universal life insurance. Designed for families not wanting variable investments, the UL’s can provide protection, flexibility, and preserve wealth for beneficiaries. The Pacific Versa Flex PRO is designed to be a flexible premium policy with a guaranteed permanent protection (death benefit). Families wanting a universal life policy focused on ‘PROtection’ will want to look at this policy.

The Versa Flex NLG is alternatively designed to be an accumulation tool with flexible premiums. The NLG, which stands for the build in ‘No Lapse Guarantee’ rider, is designed to set a premium and adjust coverage to cope with changing cash value. Pacific Estate Preserver III is the third option and is designed to preserve and pass wealth to beneficiaries. Flexible with flexible premium schedules and death benefit adjustability, the policy also offers a 3% rate guarantee and a built in ‘no lapse rider’ to further protect the owners.

Pacific Life has some unique and notable features with these policies. They have guaranteed cost of insurance rates for specific time periods, either five or ten years. The policies can also be converted to any other permanent insurance type any time during the eighth policy year.

Pacific Life Term Insurance

A very traditional spread of term insurance is currently available from Pacific Life. They are being marketed as term products with attractive pricing, conversion flexibility, and competitive underwriting. Pacific Life offers the Pacific-10 and Pacific-20, offering level premiums for either ten or twenty years. The policies have conversion options and owners can opt for a full complement of riders to customize the policy.

There is also a One Year Term policy and an ‘Annual Renewable Term’ called Pacific-ART. These policies can offer some premium saving, however, owners will want to be clear about insurability risk when considering such insurance. Pacific Life has added a ‘Last Survivor One Year Term’ policy, which will pay death benefits after both insured parties pass. Each year will require a renewal and proof of insurability.

A Unique Approach to Term: Income Term

Pacific Life offers a very unique term policy they call Pacific Income Term. This policy insures a family’s income, paying the death benefit as a stream of income over time rather than a lump sum. This innovative solution may be well suited for families that want to continue meeting fixed debt or business financial obligations. Upon the passing of the insured, a stream of monthly income will begin flowing to beneficiaries as outlined in the policy.

Riders to Consider

Pacific Life offers a number of riders to customize policies, including the full complement of ‘run of the mill’ options. Here is a brief summary of the more interesting riders worthy of some consideration. Some policies offer the Accelerated Living Benefit Rider which will allow for access to portions of the death benefit. In the event of a terminal illness diagnosis the benefit can be triggered.

The Conversion Rider allows for a universal, variable, or indexed policy to be converted to any other permanent policy offered at the time. The conversion can take place ONLY during the eighth year and will preserve the risk class of the original policy.

Pacific Life also offers two ‘Policy Split Option’ riders, which allow a last survivor policy to be split into two separate individual policies. It should be noted that evidence of insurability will be required by both parties. Also, this will NOT qualify as a tax free 1035 exchange and surrender charges may apply. The ‘Enhanced’ version of the rider waives the need for evidence of insurability if Estate Tax Laws change down the road. The Enhanced Policy Split Option Rider is offered at no charge.

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