Catch the Global Wave. Pacific Indexed Accumulator III-NY. Client Brochure. Indexed Universal Life Insurance PIA3NY-1E

Transcription

1 Catch the Global Wave Pacific Indexed Accumulator III-NY Indexed Universal Life Insurance Client Brochure PIA3NY-1E

2 :::1 Benefits of Indexed Universal Life Insurance Protect your family and assets with life insurance proceeds that are paid tax-free 1 at the insured s death. Benefit from index-based growth potential, up to current growth caps. Help prevent index-based losses with guaranteed minimum interest rates. Supplement your income with tax-free 2 policy loans and withdrawals from the available cash value. 1 For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Section 101(a)(1). In certain situations, however, life insurance death benefits may be partially or wholly taxable. Situations include, but are not limited to: the transfer of a life insurance policy for valuable consideration unless the transfer qualifies for an exception under IRC Section 101(a)(2) (i.e. the transfer-for-value rule ); arrangements that lack an insurable interest based on state law; and an employer-owned policy unless the policy qualifies for an exception under IRC Section 101(j). 2 For federal income tax purposes, 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), and 7702A. Any policy withdrawals, loans, and loan interest will reduce policy values and may reduce benefits. 3 Policy Form #P08PI3. Indexed universal life insurance does not directly participate in any stock or equities investments.

3 2::: Balance Growth Potential with Protection The ocean extends as far as the eye can see, sending one wave curling after another. Surfers dot the coast line, patiently waiting for the wave they will ride to shore. Some paddle furiously to catch rip curls while others wait for gentler swells. Which Wave Is Right for You? All waves will get you to shore. The only question is how rocky a ride will you accept to get you where you need to go? The same concept applies to choosing a life insurance product. All will offer potentially lifelong protection when adequately funded, but growth potential will vary by product. Find a Balance with Indexed Universal Life In indexed universal life insurance, you can expect growth potential based in part on the performance of a major stock market index while limiting your losses to guaranteed interest crediting floors. This can be an attractive choice if you want growth potential that s intended to help outpace inflation while avoiding market-based losses. The Right Tool Now that you ve caught the wave, Flexible premiums and flexible life insurance coverages for use the right tool to navigate it. you and the whole family. See page 5. Pacific Indexed Accumulator III-NY 3 Choice of three indexed accounts and a fixed account to help indexed universal life insurance provides: drive your policy s cash value growth potential. See page 3. Guaranteed minimum annual interest rates in all accounts. See page 4. No-lapse guarantee that keeps policy in-force, regardless of performance, from 4 to 20 years (duration based on issue age). See page 6. Pacific Indexed Accumulator III-NY Power of Guarantees, Performance Based in Part on Global Indexes

4 Find a World Full of Opportunity in Pacific Indexed Accumulator III-NY. :::3 Indexed coverage current as of July U.S. potential from 1-Year Indexed Account International potential from 1-Year International Indexed Account 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. 4 MSCI Emerging Markets Index 10 Measures the equity performance of companies domiciled in 23 emerging markets countries representing approximately 13% of the world s stock market capitalization. 4 Hang Seng Index8 Measures the performance of Hong Kong s 50 largest, most liquid companies. 4 EURO STOXX 50 Index9 Measures the performance of 50 blue-chip stocks from 12 Eurozone countries, like Finland, France, and Germany. 4 Guaranteed Floor Prevent Exposure to Market-Based Losses Each indexed account guarantees a 0% interest crediting floor to help prevent exposure to losses due to market downturns. With 0% guaranteed, the only reductions to your policy s cash value will be for policy charges and any policy distributions, like loans or withdrawals you take. See why sometimes zero counts. 4 Based on index fact sheets retrieved from standardandpoors.com, hsi.com.hk, stoxx.com, and mscibarra.com July 2015.

5 4::: Choose Your Growth Strategy You may allocate among any combination of a fixed account and three indexed accounts to help drive your policy s ability to accumulate cash value. Fixed Account Credits a currently declared interest rate. Guarantees current rate for first policy year. Guarantees at least 2% crediting rate annually, thereafter. Indexed Account Each indexed account credits interest using a formula that includes the performance of an index or indexes, excluding dividends. Since no one can predict future performance, you may want to consider allocating among one or more accounts. Indexed Account 1-Year 1-Year High Par 1-Year International Current Interest Crediting Potential (all indexes exclude dividends) 100% of S&P 500 index s performance up to the current Growth Cap (Cap); 0% guaranteed minimum interest rate (floor) 150% of S&P 500 index s performance, not to exceed the current Cap; 0% guaranteed floor Average of 3 international indexes 1-year performance after each is applied to the current Cap and 0% guaranteed floor Hang Seng EURO STOXX 50 MSCI Emerging Markets Credit Applied to Maturing Segments at End of months 12 months 12 months Guaranteed Minimum Annual Crediting Rates 2% in Fixed Account 0% in All Indexed Accounts 5 Each transfer into an indexed account creates a unit of value called a segment. Interest is credited to each segment once it reaches the end of its one-year segment term. Each indexed account uses a point-to-point measurement of the index performance rate (excluding dividends). Indexed accounts contract names and guaranteed elements: 1-Year (1 Year Indexed Account), 1-Year International (1 Year Indexed Account 2), and 1-Year High Par (1 Year Indexed Account 3). Guaranteed 0% minimum annual interest rate in all accounts and guaranteed 100% participation rate in all accounts except the 1-Year High Par (140%). Guaranteed minimum growth caps: 3% in 1-Year and 1-Year International; 2% in 1-Year High Par.

6 :::5 Flexible Life Insurance Coverage Now and Later Pacific Indexed Accumulator III-NY provides potentially lifelong protection. You can build the right coverage based on your current life insurance needs. If your needs should later change, you can adjust your policy s coverage to meet new needs. Build Protection for Now Your life insurance producer can help you choose from among the following coverages to help you meet your current life insurance needs. Choose... Basic Coverage on the primary insured (you). Consider adding optional coverage on yourself or any member of your immediate family: Increase your coverage with cost-effective Additional Coverage. Include any member of your immediate family with Annual Renewable Term Rider Additional Insured Coverage 6 (Form #R08RTA-NY1). Insure your children aged 14 days to 25 years with Children s Term Rider 6 Coverage (Form #R98-CT-NY1). SVER Coverage provides life insurance coverage on the primary insured and can help boost policy s cash surrender value in its early years for improved balance sheet reporting and other financial needs. Adjust Your Coverage Amounts Later After policy issue, you may increase or decrease your coverage amounts, within certain limits. Each increase must be at least $25,000 and your Basic Coverage amount after all decreases have been taken may not be less than $1,000. Policy charges and premiums may be affected. See your policy for additional details. 6 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.

7 Flexibility for Growing Families If you get married, have a baby, or on certain birthdays up to your 40 th birthday, you can add coverage on your life without further medical underwriting through the Guaranteed Insurability Rider (Form #R93-GI-NY1). 6 Just contact us within 31 days of a qualifying event. Age-based coverage limits and other guidelines apply. Request the Guaranteed Insurability Rider and see your policy for details. 6::: Automatic No-Lapse Guarantee Once you ve built your life insurance protection, you can guarantee it remains in force no matter how your policy performs. Simply pay at least the No-Lapse Guarantee Premiums stated in your policy and the Short-Term No-Lapse Guarantee Rider (Form #R02NL5-NY1) 6 will protect your policy from lapse from four to 20 years depending on your age at policy issue. This rider is automatically included with all eligible policies. Your guarantee will remain in force as long as you pay your Short-Term No-Lapse Premiums. Paying only these premiums 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. If policy loans or withdrawals or taken, additional premiums may be required to keep the no-lapse guarantee in force. Talk to your life insurance producer for details.

8 Potential to Access Your Cash Value for Income Your life insurance protects your loved ones, business, or estate plan. But your policy also provides benefits you can enjoy in your lifetime, including tax-free 7 policy loans and withdrawals from your available cash value. The ability to take policy loans and withdrawals expands the flexible uses of your policy, but remember that any withdrawals, policy loans, and accrued policy loan interest will reduce policy values and may reduce your policy s benefits. :::7 Withdrawals Available after first policy year. $25 fee for each withdrawal (currently waived). Minimum amount: $200. Policy Loans Minimum amount: None. Maximum amount: Cash value minus the sum of total policy debt, three times the most recent monthly policy charges, and any applicable surrender charges. Net-cost of the loan is the difference between the interest rate we charge and the interest rate we credit based on the loaned amount. See chart below. 0% Net-Cost Loans (based on current rates) Annual Interest Charged (in arrears) Annual Interest Credited Annual Net Cost Current 2.25% 2.25% 0.00% Guaranteed 2.25% 2.00% 0.25% 7 For federal income tax purposes, 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), and 7702A. Any policy withdrawals, loans, and loan interest will reduce policy values and may reduce benefits.

9 8::: Automate Your Income You can help structure a recurring income stream from policy loans and withdrawals using the optional Automated Income Option service. Eligibility restrictions apply. Talk to your life insurance producer for details. Protect Your Heavily Loaned Policy from Lapse Tax-free 1 policy loans can be an efficient way to boost your income. But if your policy lapses while your total policy debt (including interest) is greater than the sum of your premiums paid, a taxable event may be triggered. To help prevent this, you may exercise the Overloan Protection II Rider (Form #R08OLP-NY1) 9 at the end of your income-drawing years. It will help protect your policy from lapse in later years but will lock your policy from further distributions, premium payments, and benefit changes. There are eligibility requirements and a one-time charge will apply to exercise the rider. 9 The potential tax consequences of the Overloan Protection II Rider have not specifically ben ruled on by the IRS or courts. Clients should consult their tax advisors. 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.

10 :::9 Options for Additional Flexibility Pacific Indexed Accumulator III-NY offers the following riders to enhance the protection and flexibility provided through your policy. 2% Interest Guarantee Rider (Form #R08PI3) Guarantees an alternate accumulated value that, if higher than the policy s actual accumulated value, may be used to help prevent potential policy lapse or may increase the amount available for policy loan, policy surrender, or death benefit payout. The rider s alternate accumulated value is calculated using current policy charges but earns 2% annual interest from the date of issue. Conversion Rider (Form #R03CON-NY1) Allows you to exchange this policy for any other cash value life insurance product we have available for such conversions in this policy s eighth policy year. No new evidence of insurability will be required and any applicable surrender charges on this policy will be waived. See policy for details. Disability Benefit Rider (Form #R84-DB-NY1) Allocates a monthly disability benefit to the policy s accumulated value during the primary insured s qualifying disability, up to the insured s age 65. Waiver of Charges Rider (Form #R84-WC-NY1) Waives all policy charges in the event of the total disability of the primary insured following a threemonth qualifying period.

11 10::: 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. Pacific Life The Power To Help You Succeed Offering insurance since 1868, Pacific Life provides a wide range of life insurance products, annuities, mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Pacific Life also counts more than half of the 100 largest U.S. companies as its clients. For additional company information, including current financial strength ratings, visit Pacific Life online at Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Client count as of June 2014 is compiled by Pacific Life using the 2014 FORTUNE 500 list.

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 & Annuity 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. Newport Beach, CA Visit us at our Web site: (888) Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York, and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. 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 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 this product is purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Pacific Life & Annuity 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. Non-guaranteed elements are not guaranteed by definition. As such, Pacific Life & Annuity 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. Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency Not FDIC Insured No Bank Guarantee May Lose Value Policy Form #P08PI3 PIA3NY-1E /15