Pacific Secure Income®

A Fixed, Deferred Income Annuity

Pacific Secure Income is not available in California, Illinois, North Carolina, Oregon, Pennsylvania, and Texas.

For predictable income that begins on a date in the future and lasts for one life, two lives, or a specified period of time.


Client Profiles

Consider Pacific Secure Income for conservative pre-retirees and retirees who are:

  • Concerned about expenses later in life.
  • Want predictable income starting in the future so they may more effectively manage their portfolio
  • Want to potentially reduce taxes and increase lifetime income with a qualified longevity annuity contract (QLAC).

Key Features

Flexible Premium

Make a lump-sum purchase payment or build income over time through multiple purchase payments (not available with the Period Certain income option).

Purchase payments can be made regularly or intermittently at any time from contract issue until 13 months prior to the date when annuity income payments begin, which is called the Annuity Payment Start Date.

Annuity Income Options (Fixed Annuitization Only)

One annuity income option may be selected per contract. The income option and frequency of payments (monthly, quarterly, semiannually, or annually) is set at contract issue and cannot be changed.  Income payments must begin no earlier than 13 months after the latest purchase payment and no later than 30 years after contract issue. 

Period Certain Option
Up to 30 years.1, 2  No subsequent purchase payments are permitted if this income option is selected.

Single/Joint Life Options

  • Life/Joint Life Only
  • Life/Joint Life Only with 100% Return of Purchase Payments Death Benefit
  • Life/Joint Life with Period Certain (up to 30 years)1, 2
  • Life/Joint Life with Cash Refund
  • Life/Joint Life with Installment Refund2

For Joint Life Options, income payments can be reduced to 50%, 67%, or 75% of the current income payment upon the death of either annuitant.

Joint and Survivor Life Options

  • Joint and Survivor Life Only
  • Joint and Survivor Life Only with 100% Return of Purchase Payments Death Benefit
  • Joint and Survivor Life with Period Certain (up to 30 years1, 2)
  • Joint and Survivor Life with Cash Refund
  • Joint and Survivor Life with Installment Refund2

For Joint and Survivor Life Options, income payments can be reduced to 50%, 67%, or 75% of the current income payment upon the death of the primary annuitant.

While the Life Only, Joint Life Only, and Joint and Survivor Life Only annuity options generally offer the highest payments, if death occurs before the Annuity Payment Start Date, a death benefit is not payable and no income payments will have been paid.


Optional Features

Advance or Defer Income Start Date
Before annuity income payments begin, there is a one-time opportunity to advance or defer the Annuity Payment Start Date up to five years in either direction using the Annuity Payment Start Date Adjustment Feature. (Not available in CT or NY.)

Annuity Payment Start Date Adjustment

  • The adjusted Annuity Payment Start Date must be at least 13 months after the most recent purchase payment was received and no later than 30 years from the contract issue date.
  • The owner(s) must not exceed the applicable maximum Annuity Payment Start Date age (age 70½ for traditional IRAs, age 85 for QLACs, and age 90 for nonqualified and Roth IRA contracts).
  • The annuity income payment amount will be adjusted by using this feature. If the Annuity Payment Start Date is advanced, the income payment amount will be reduced. If the Annuity Payment Start Date is deferred, the income payment amount will increase.
  • Available with all annuity income options except Life Only, Joint Life Only, Joint and Survivor Life Only, or Period Certain.
  • Changes to the Annuity Payment Start Date for qualified contracts must meet applicable required minimum distribution (RMD) requirements (Roth IRA excluded).

Inflation Protection

Must be elected at issue. Once annuity income payments begin, annual increase of 2%, 3%, or 4%.

Not available with QLAC or with traditional IRA contracts.


Additional Information

After annuity income payments begin, there are two ways to access additional amounts.

Income Payment Acceleration

After reaching age 59½, if clients elect to receive monthly annuity income payments, they may accelerate income payments and receive a lump-sum amount equal to three or six times the normal monthly payment (for qualified contracts, the entire payment acceleration period must be in the same tax year).

  • Normal income payments will resume in the fourth or seventh month, respectively.
  • Available with all annuity income options.
  • This feature can be exercised a maximum of two times.
  • After using the feature, clients must receive at least one normal monthly income payment before using it again.
  • Not available with QLACs.

The following chart assumes normal monthly payments are $1,000 and demonstrates how the Income Payment Acceleration feature works.
 


Withdrawals of Guaranteed Income Payments

For nonqualified contracts, clients may make a lump-sum withdrawal of up to 100% of the present value of the remaining guaranteed income payments. (Not available in MO, OR, or PA, or with the Period Certain option in NC.)

  • Available with all options except Life Only, Life Only with 100% Return of Purchase Payments Death Benefit, Joint Life Only, Joint Life Only with 100% Return of Purchase Payments Death Benefit, Joint and Survivor Life Only, or Joint and Survivor Life Only with 100% Return of Purchase Payments Death Benefit.
  • Interest-rate adjustment will apply.
  • Owner(s) must be age 59½ or older at the time of the withdrawal.
  • Making a withdrawal will lower or may stop remaining guaranteed income payments. However, with the exception of the Period Certain option, if the client is still living at the end of the period when remaining guaranteed income payments would have stopped, Pacific Life will resume income payments until the annuitant’s death.

Please note: If clients elect the Income Payment Acceleration feature, there is a six-month waiting period before they may make a withdrawal. Likewise, if clients make a withdrawal, there is a six-month waiting period before they may elect the Income Payment Acceleration feature.

Also, if clients adjust the Annuity Payment Start Date, there is a six-month waiting period before they may use the Income Payment Acceleration feature or before they may make a withdrawal.

Before Annuity Income Payments Begin

If death occurs before annuity income payments begin, a return-of-purchase-payments death benefit applies (except for the Life Only, Joint Life Only, and Joint and Survivor Life Only annuity income options).

  • For contracts with a non-natural owner: A death benefit becomes payable at the death of the first annuitant.
  • For Single Life options or the Period Certain option: The contract is terminated at the death of the first owner or annuitant, and a return-of-purchase-payments death benefit is paid (except for the Life Only annuity income option).
  • For Joint Life and the Joint and Survivor Life options: The contract is terminated at the death of the first owner or the last annuitant and a return-of-purchase-payments death benefit is paid (except for the Joint Life Only and Joint and Survivor Life Only annuity income options). At the time of death, if the surviving spouse is an annuitant and a joint owner (if applicable), the spouse can continue the contract instead of receiving the death benefit.
  • The recipient of the death benefit will receive a lump-sum payment.
  • If an owner or an annuitant is diagnosed with a terminal illness resulting in a life expectancy of 12 months or fewer on or after the contract issue date, a death benefit will be paid (except for Life Only, Joint Life Only, or Joint and Survivor Life Only annuity income options). Other restrictions may apply and availability may vary by state. Please refer to the contract for details. Not available in CA, OR, or PA.

After Annuity Income Payments Begin

If death occurs on or after the Annuity Payment Start Date, the selected annuity income option will determine any additional payments made.

Premium: Flexible premium. Multiple purchase payments are permitted only with the lifetime annuity income options. Subsequent purchase payments are not permitted within 13 months of the Annuity Payment Start Date. 1035 exchange/transfer requests will not be accepted within 16 months of the Annuity Payment Start Date. For the Period Certain annuity income option, multiple purchase payments or 1035 exchange/transfers are permitted with the application, and the funds must be received within 60 days of contract issue, but no subsequent purchase payments are permitted (90 days in New York).

Payee will receive one annuity income payment, either monthly, quarterly, semiannually, or annually, regardless of the number of purchase payments.

Minimum Initial Purchase Payment: $15,000 (nonqualified and qualified)

Maximum Purchase Payment: $1 million; total purchase payments more than $1 million require Pacific Life home-office approval in advance.

Maximum Qualified Longevity Annuity Contract (QLAC) Purchase Payment: As of January 1, 2018, the lesser of $130,000 or 25% of aggregated IRA account values (including existing QLAC purchases, subject to inflation) as of 12/31 of the prior year.

Minimum Subsequent Purchase Payment: $500

Maximum Issue Age: 85 (nonqualified and Roth IRA); 68 (traditional IRA); 82 (QLAC)

Minimum Issue Age: 22

Ownership Guidelines:

  • An owner must also be an annuitant (unless the owner is a non-natural person).
  • Joint owners and joint annuitants must be spouses.
  • Joint annuitants are not permitted with the Period Certain option or with non-natural owners.
  • Joint owners are not permitted with the Period Certain option or any of the Single Life options.

Guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.

1For qualified contracts, the maximum length of time for the Period Certain options may be less than 30 years, if necessary to comply with RMD regulations for annuities.

2Not available with a QLAC.

Broker/dealer and state variations may apply. Contact your broker/dealer for availability.

Qualified contracts, including traditional IRAs and Roth IRAs, are eligible for favorable tax treatment under the Internal Revenue Code (IRC). Certain payout options and certain product features may not comply with various requirements for qualified contracts, which include required minimum distributions and substantially equal periodic payments under IRC Section 72(t). Therefore, certain product features, including the ability to change the annuity payment start date and to exercise withdrawal features, may not be available or may have additional restrictions. The payment acceleration feature is available but may be considered a modification to the 72(t) program and may subject the series of 72(t) withdrawals, including any prior withdrawals, to an additional 10% federal tax. In addition, certain payout options may not be available for qualified contracts or QLAC.

Pacific Secure Income can be used as a qualified longevity annuity contract (QLAC), subject to state and firm availability. For the contract to be eligible as a QLAC, certain requirements under Treasury Regulations must be met, including limits on the total amount of purchase payments that can be made to the contract. Compliance with the QLAC purchase payments limit is the owner’s responsibility, and failure to adhere may result in the contract no longer being considered a QLAC, and would subject the value of the QLAC to required minimum distribution requirements that may not be accessible through the contract. In addition, there are restrictions on annuity payout options that can be elected under a QLAC contract, and the commutation, payment acceleration, and inflation protection features are not available. Changes to marital status may require a change to the annuity payments to maintain the QLAC status.

Income from annuity payments received from Pacific Secure Income cannot be aggregated or combined with income from other IRA contracts/assets for purposes of satisfying the required minimum distributions.

For Roth IRAs, upon the Roth IRA owner’s death, distributions to the designated beneficiaries may be subject to IRS required minimum distribution rules. If the designated beneficiary is not the spouse, the beneficiary may be required to take a lump sum payment of the present value of the guaranteed payments if a death benefit becomes available. For the purpose of qualified distributions from a Roth IRA, since the five-year waiting period is tracked by the Roth IRA holder, the designated beneficiary and/or spouse who elects to treat the Roth IRA as his or her own will also need to take on this responsibility going forward when claiming qualified distributions.

Nonqualified contracts may not be subject to the various requirements for qualified contracts, but are still subject to an additional 10% federal tax for annuity payments, withdrawals, and other distributions made prior to age 59½. While there are exceptions to this additional federal tax under IRC Section 72(q), certain payment options may not comply. The payment acceleration feature may be considered a modification to the 72(q) program and may subject the series of 72(q) withdrawals, including any prior withdrawals, to an additional 10% federal tax. For nonqualified contracts, an additional 3.8% federal tax may apply on net investment income.

Pacific Secure Income (30-1294, ICC15:30-1401, 30-1305NJ, 12-1300, ICC14:20-1309, ICC15:15-1400, subject to state variations) are issued by Pacific Life. 

For Use With Clients
 
FINANCIAL PROFESSIONALS

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Pacific Life, its distributors, 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 advisor or attorney.

Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.

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. 

Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.

No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency