Pacific PRIME UL-NLG Flexible Premium, Universal Life Insurance
Flexible and Efficient Asset Protection
Pacific Life Insurance Company
Pacific PRIME UL-NLG Help Protect Your Assets with Life Insurance
In planning for a financially secure future for yourself and your loved ones, have you considered the impact of taxes? Without proper planning, your financial legacy can be eroded by 39.6%1 or more due to income and estate2 taxes at your death.
tial tax-deferred growth of the policy’s cash value. So discuss the impact of taking withdrawals and loans from your policy with your life insurance producer and choose wisely when considering accessing your policy’s cash value.
Life insurance is designed to help. Cash value life insurance is the only asset that can offer all three of the following tax benefits: 1) a tax-free3 death benefit for loved ones, 2) taxdeferred growth of the policy’s cash value, and 3) a potential tax-free4 income stream through withdrawals and policy loans. Keep in mind that withdrawals and loans will shorten or negate the no-lapse guarantee of this policy and the poten-
Flexible and efficient, life insurance can be used to transfer and preserve wealth for generations. See what it can do for you. Help protect your assets with Pacific PRIME UL-NLG5, a universal life insurance policy that provides flexible no-lapse guarantees of up to a lifetime. Flexible and Efficient Asset Protection
Pacific PRIME UL-NLG offers:
Helping You Protect Your Assets
e No-Lapse Guarantee Durations of Up to a Lifetime e Guaranteed Interest Crediting Rates e Flexible Premiums
Pacific PRIME UL-NLG may help you if you have the following traits:
Plus… e Tax-Free3 Death Benefit for Loved Ones e Tax-Deferred Growth of Cash Value e Tax-Free4 Access Options for You
e e e e e
Moderate to high net worth Age 50 or older, but flexible enough for any age Have sufficient source of retirement income elsewhere Need for legacy planning or estate tax planning Potential desire for charitable gifting
Investment and Insurance Products: Not a Deposit — Not FDIC Insured — Not Insured by any Federal Government Agency — No Bank Guarantee — May Lose Value
It Can Be as Easy as 1 - 2 - 3.
Is Pacific PRIME UL-NLG right for you? Start by asking yourself just 3 simple questions:
Do you want flexible life insurance coverage that can cover your whole family in one convenient policy?
Do you want a guarantee that your coverage will stay in place, no matter what happens to your policy’s performance?
Do you want extra protection in case you become disabled, terminally ill, or die due to an accident?
Take a closer look at how Pacific PRIME UL-NLG can help you address these questions.
1 Top marginal income tax bracket, irs.gov, Jan. 2013. 2 According to the American Taxpayer Relief Act of 2012, the federal estate, gift and generation skipping transfer (GST) tax exemption amounts are all $5,000,000 (indexed for inflation effective for tax years after 2011); the maximum estate, gift and GST tax rates are 40%. 3 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). 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. 5 Policy Form #P10P1N.
Flexible Coverage Options for the Whole Family
Pacific PRIME UL-NLG can help provide financial protection for you, your family, your business, and your legacy through a tax-free6 death benefit. You can structure your policy to cover just you or, through optional policy benefits called riders,7 your whole family.
Death Benefit Coverage Basic Coverage on the primary insured (you).
Optional level term insurance on any member of your immediate family. Annual Renewable Term Rider–Additional Insured (Form #R08RTA)7—Covers any member of the primary insured’s immediate family. Children’s Term Rider (Form #R84-CT)7—Covers primary insured’s children aged 14 days to 25 years.
Adjust Your Coverage Amount After policy issue, increases are not allowed. However, you may scale down your coverage as soon as the second policy year. Your Basic Coverage amount after all decreases have been taken must be at least $1,000. Policy charges may or may not be affected accordingly. See your policy for details.
6 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). 7 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.
Flexibility for Growing Families
What if you get married, or have a baby, or need to increase your coverage before your 40th birthday? You can buy additional Death Benefit death benefit coverage without requiring further medical underwriting through the Guaranteed Insurability Rider (Form #R93-GI).7 Just contact us within 31 days of a qualifying event. Request the rider and see your policy for age-based coverage limits and e alu other guidelines. dV late u Accum
Adjust the Payout Structure
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Choose one of the following Death Benefit Options at issue and you may switch it as often as yearly, subject Time to certain policy limits: Time
C (Return of Premium)8 Death Benefit
Death Benefit Equals...
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Premium – Withdrawals Amount
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Face Amount plus accumulated value
Face Amount plus sum of premiums, less any withdrawals
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Premium – Withdrawals Amount
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Death Benefit 8 The maximum issue age for Death Benefit Option C isPremium 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– Withdrawals in the Death Benefit Qualification Test,Tax Qualification as Life Insurance, and Modified Endowment Contract Tax Amount Status sections of the Policy. lue
Guarantee Your Death Benefit for the Duration You Choose
We understand that you have better things to worry about than your life insurance policy. That’s why Pacific PRIME UL-NLG features a guarantee to help keep your policy in-force even if your policy’s cash value drops to zero. Without this guarantee, as long as your policy has enough cash value to pay monthly policy charges, your policy would stay in force. But if policy charges increased or crediting rates decreased beyond expectations, you may have to pay more in premiums than you planned to keep your policy in place.
To provide the security of guaranteed coverage at predictable premiums, the Flexible Duration No-Lapse Guarantee III Rider (Form #R03FNL)9 guarantees that your policy will stay in force for the duration you choose, no matter how your policy performs.10 Choose your no-lapse guarantee duration and pay your premiums as planned.11 It’s that easy.
The hypothetical chart to the right illustrates that longer no-lapse guarantee periods will require higher premiums.
9 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 The no-lapse guarantee is based on the net no-lapse guarantee value being greater than zero.The net no-lapse guarantee value is a policy calculation that mirrors the growth of your policy’s cash value, but grows at a different interest rate and is reduced by different charges than your policy’s cash value. It cannot be accessed through withdrawals or policy loans and is merely a calculation to determine whether your no-lapse guarantee is in effect. 11 If the policy is being maintained solely by the no-lapse guarantee, you will be foregoing the advantage of building cash value. A policy will enter a grace period if both the cash value and no-lapse guarantee value (net of loans) reach zero and if no further (or insufficient) premium payments are made.To keep the policy from entering the grace period and eventually lapsing, an additional amount, representing the lesser of uncollected monthly deductions with interest, or the amount required to bring the net no-lapse guarantee value to a positive value, must be paid. 12 The Flexible Duration No-Lapse guarantee, 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
You Choose Your No-Lapse Guarantee Duration
Lifetime Examples of No-Lapse Guarantee Durations
To Age 110 To Age 105 To Age 100 To Age 96 low
Optional Rainy Day Protection Life is full of uncertainties. You can plan for success in the event of an emergency by having a backup plan. Pacific Prime UL-NLG offers optional riders14 that can provide benefits in the event of disability, terminal illness, or death due to an accident.
e Accelerated Living Benefit Rider (Form #R06ALB)15,16,17 — If the primary insured is diagnosed as terminally ill (12 months or fewer to live), a portion of the tax-free death benefit13 will be available for the policyowner to use for any reason. e Accidental Death Benefit Rider (Form #R84-AD) — Provides an additional death benefit to the policy’s beneficiaries if the primary insured dies due to an accident.
e Waiver of Charges (Form #R84-WC) — Helps keep coverage in place by waiving all policy charges if the primary insured is diagnosed with a total disability prior to age 60. Benefit takes effect after a three-month qualifying period. e Owner Waiver of Charges (Form #R84-OWC) — Waives policy charges if the policyowner (who is not the primary insured) becomes totally disabled before age 60.
13 For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). 14 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. 15 Some states may require a diagnosis of terminally ill with 24 months or fewer to live. 16 The cost of exercising the rider is that the death benefit is reduced by an amount greater than the rider benefit payment itself to reflect the early payment of the death benefit. Rider benefit payments will reduce the death benefit, cash surrender value, and any policy debt. Additionally, rider benefit payments may adversely affect the benefits under other riders. 17 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 1986.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 qualified and independent legal and tax advisors for more information.
Product Guarantees & Charges
Flexible Duration No-Lapse Guarantee12 Provided through the Flexible Duration No-Lapse Guarantee III Rider (Form #R03FNL), your policy’s no-lapse guarantee will be in effect for the duration of your choosing as long as the policy’s net no-lapse guarantee value is greater than zero. The net no-lapse guarantee value grows at a different interest rate and is reduced by different charges than your policy’s cash value. You may take withdrawals and loans from your policy’s cash value, but doing so may reduce or negate your no-lapse guarantee. If you plan on taking withdrawals or loans from your policy, you should request illustrations from your life insurance producer to understand the potential impact. Interest Rate Guarantee Your policy’s cash value will be credited with a current rate that Pacific Life guarantees for the first policy year. The current rate may change periodically, but is guaranteed to never be less than 3.00%. Additionally, in policy year 21 and afterward, Pacific Life currently credits an additional 0.60% to the current crediting rate, though this is not a policy guarantee.
Policy charges will reduce the policy’s accumulated cash value. Please refer to your policy for more detailed information. e Premium Load — This charge is assessed on each premium payment we receive from you. Maximum of 6.95%. (Current premium load: 5.95%.) e Administrative Charge — $7.50/month through insured’s age 120. e Coverage Charge — Monthly charge for first 10 policy years on a current basis, through age 120 on a guaranteed basis, for administration and maintenance of the policy. Rate varies based on issue age, gender, risk class, and Death Benefit Option. e Cost of Insurance Charge (COI) — A rate per $1,000 multiplied by the Net Amount at Risk (difference between your policy’s death benefit and its cash value). This charge is deducted monthly through age 120. e Surrender Charge — An amount deducted from the cash value if the policy is surrendered within the first 10 policy years. e No-Lapse Guarantee Charge — An amount deducted monthly from the cash value and based on the policy’s cash value and Net Amount at Risk.
The Power to Help You Succeed Offering insurance since 1868, Pacific Life provides a wide range of life insurance products, annuities, and 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 www.PacificLife.com.
Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Client count as of May 2012 is compiled by Pacific Life using the 2012 FORTUNE 500® list.
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.
Pacific Life Insurance Company Newport Beach, CA (800) 800-7681 • www.PacificLife.com 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. 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.
Life Insurance Producer’s Name
State Insurance License Number (or affix your business card) 10-3401A PP-2B