Variable annuities issued by Pacific Life Insurance Company ("Pacific Life") are distributed by Pacific Select Distributors, Inc. (member FINRA & SIPC), a subsidiary of Pacific Life, and are available through licensed third party broker/dealers.
Investors should carefully consider a variable annuity's risks, charges, limitations and expenses, as well as the risks, charges, expenses and investment objectives of the underlying investment options. This and other information about Pacific Life are in prospectuses that should be read carefully by clients before investing.
Pacific Life:
Variable annuities are long-term investments designed for retirement. The value of the variable investment options will fluctuate and, when redeemed, may be worth more or less than the original cost. Withdrawals and other distributions of taxable amounts, including death benefit payouts, will be subject to ordinary income tax. If withdrawals and other distributions are taken prior to age 59½, a 10% federal tax penalty may apply. A withdrawal charge may also apply. Withdrawals will reduce the value of the death benefit and any optional benefits.
Guarantees are subject to Pacific Life's claims-paying ability and do not protect the value of the variable investment options.
Pacific Life Insurance Company is licensed to issue individual life insurance and annuity products in all states except New York. Product availability and features may vary by state.
IRAs and qualified plans — such as 401(k)s and 403(b)s — are already tax-deferred. Therefore, an annuity should only be used to fund an IRA or qualified plan to benefit from the annuity's features other than tax deferral. These include lifetime income, death benefit options and the ability to transfer among investment options without sales or withdrawal charges.
As investment adviser, Pacific Life Fund Advisors LLC (PLFA), a wholly owned subsidiary of Pacific Life, has limited discretion to periodically make changes in the Portfolio Optimization investment options and to reallocate your contract values, in accordance with the model you have selected, because the model may be updated from time to time. Asset allocation does not guarantee future results. Asset allocation matches risk to a portfolio. It does not guarantee future results, assure a profit or protect against loss.
Dollar Cost Averaging (DCA) can be a convenient way to continuously invest, regardless of changing prices. However, it does not assure a profit or protect against loss in declining markets. Investors should consider their financial ability to continue to invest, even when prices are low. The stated minimum interest rate is credited on a declining balance as money is transferred out of the DCA Plus Fixed Option. Pacific Life assumes the investment risk on the Fixed Options and GIOs and payment is guaranteed by Pacific Life, subject to its claims-paying ability.
The following considerations apply to the portfolios underlying the variable investment options within Pacific Life's variable annuities:
The Money Market Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency, and it is possible to lose money investing in the portfolio.
High-yield bonds have greater credit risk than higher quality bonds. Small-cap, mid-cap and emerging-growth company stocks may be riskier and more volatile than larger, more established company stocks. International investing is subject to currency fluctuations and political changes. Real estate investments involve risks such as refinancing, economic impact on industry, changes in property values, dependency on management skills and risks similar to small company investing. Sector and concentrated portfolios with fewer securities may be subject to greater price volatility. Floating rate loans involve risk of default on interest and principal payments or price changes due to changes in credit quality of the issuer. The value can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market, or economic developments.
Although some portfolios may have names or investment objectives that resemble retail mutual funds managed by the same money manager, these portfolios may not have the same underlying holdings or performance as the retail mutual funds. Investment results may be higher or lower.
Indices are unmanaged and cannot be invested in directly.
Amounts withdrawn before the end of a guarantee term, except for previous 12 months' earnings, may be subject to a Market Value Adjustment (MVA) and a withdrawal charge. Amounts withdrawn before the end of a subsequent guarantee term, except for previous 12 months' earnings, will be subject to an MVA. The MVA is based on a formula guaranteed to respond to interest rate movements. As a general rule, if the current crediting rate is less than your guaranteed interest rate, the MVA can increase the amount withdrawn. Otherwise, the MVA can reduce the amount withdrawn. Pacific Life Insurance Company is licensed to issue individual life insurance and annuity products in all states except New York. Product availability and features may vary by state.
Pacific Frontiers is issued by Pacific Life Insurance Company ("Pacific Life") and assumes the investment risk on the fixed options, and payment is guaranteed by Pacific Life, subject to its claims-paying ability.
Pacific Life guarantees, including interest rates and subsequent income payouts, are backed by the claims-paying ability of Pacific Life Insurance Company.
Credit enhancements are treated as additional earnings when distributed for tax purposes and will be subject to market risk when invested in the variable investment options. In certain scenarios, Pacific Life will recapture the credit enhancement; see the prospectus for more information. Contracts with credit enhancements may have higher fees and expenses and longer surrender periods than contracts that do not provide credit enhancements. Any Pacific Value credit enhancement will not apply to the Flexible Lifetime Income, Income Access, Lifetime Income Access Plus or GPA5 guarantees, unless a step-up occurs.
Check with your registered representative regarding age restrictions. Only one Guaranteed Minimum Withdrawal Benefit (GMWB) rider can be elected on a Pacific Life variable annuity. GMWB withdrawals are not annuity payouts. Annuity payouts generally receive a more favorable tax treatment than other withdrawals.
GPA5 withdrawals during the 10-year term reduce the protected amount in direct proportion to the percentage that the contract value was reduced. A step-up cannot be elected if the new 10-year term will extend beyond the date the contract is converted to a payout stream (annuity date). GPA5 additions to the contract will be treated as earnings for income tax purposes.
GIA Plus is named "Guaranteed Income Annuity" in the contract rider. Although the step-ups cease and the guaranteed income base (amount invested grown at 5% annually) calculation ends after the annuitant reaches age 80, annual charges will apply as long as GIA Plus is in effect. It's possible that your income payouts could be higher without GIA Plus. If this occurs, you will receive the higher amount. You will have incurred the annual fee and receive no additional benefit.
Earnings Enhancement Guarantee is named "Earnings Enhancement Guarantee" in the contract rider.
Flexible Lifetime Income (Single Life) is named "5% Guaranteed Withdrawal Benefit" in the contract rider. Flexible Lifetime Income (Joint Life) is named "Joint Life 5% Guaranteed Withdrawal Benefit" in the contract rider. While Flexible Lifetime Income doesn't guarantee you a 5% return or growth rate, you can continue to take withdrawals regardless of your annuity's actual value — even if it is $0. The Flexible Lifetime Income 6% credit increases the protected amount that can be withdrawn in later years, but it is not added to your contract value. Flexible Lifetime Income credits will be treated as earnings for income tax purposes. A reset may change the protected amount and withdrawal amounts after a reset may be higher or lower.
Income Access doesn't guarantee you a 7% return or growth rate, you can continue to take withdrawals regardless of your annuity's actual value — even if it is $0.
Lifetime Income Access Plus is named "Enhanced Guaranteed Withdrawal Benefit" in the contract rider. Lifetime Income Access Plus credits will be treated as earnings for income tax purposes. A reset may change the protected amount and withdrawal amounts after a reset may be higher or lower.
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, its distributor and 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 adviser.
The federal and state income tax laws regarding variable annuities are complex and subject to change. Representations made herein are neither complete nor necessarily up to date. For example, no attempt is made to describe the tax rules related to IRAs and qualified plans. Contracts owned by entities, such as corporations, partnerships and certain trusts, are not eligible for tax deferral. Pacific Life does not provide administrative services for qualified plans and does not act in a fiduciary capacity. Neither Pacific Life nor its representatives give tax or legal advice. You should consult your tax adviser regarding your specific situation.
In-service withdrawals be can very complex. Employer-sponsored plans are not required to offer them. Participants in such plans should know that each plan is different and as such, they should contact their plan's appropriate parties for more detailed information about restrictions and possible drawbacks to in-service withdrawals. This piece is for information purposes only and should not be construed as tax, accounting or legal advice.
| No bank guarantee |
Not a deposit |
| Not FDIC/NCUA insured |
May lose value |
| Not insured by any federal government agency |
|
