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Pacific Life Insurance Company Review

pacific life insurance company review

Pacific Life is a top life insurance company in the US. In the following review, we will take a deeper look into the company to see what makes it so great.

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About Pacific Life

Known for its iconic humpback whale advertisements, Pacific Life has been a player in the life insurance industry for the better part of a century.  The company began its run in 1868 Sacramento, when it was founded as The Pacific Mutual Life Insurance Company of California.

Next came a quarter century stay in San Francisco—followed by relocation to Los Angeles after a 1908 earthquake wrecked the prior home office.

Today, Pacific Life still maintains its headquarters in nearby Orange County.  But, in 2005, the company’s insurance division shifted its legal home state to Nebraska.  The Cornhusker State promised lower taxes and a more insurance-friendly regulatory environment—but far fewer of the humpback whales that have been Pacific Life’s public visage since 1997.

Throughout its long history, Pacific Life has built a reputation as a financially stable life insurance carrier.

Indeed, Pacific Life reports that just last year the company paid out a death benefit on a policy originally issued nearly ninety years earlier in 1930.

Perhaps more relevantly to prospective insureds, the company also reported $171 billion in total assets and over $12 billion in annual revenue, which places Pacific Life comfortably within the Fortune 500.

Pacific Life predominately markets its insurance products through a nationwide network of independent agents, including multiple internet-oriented brokers.

Most policies are issued by Nebraska-chartered Pacific Life Insurance Company, a subsidiary of Pacific Mutual Holding Company.  In New York, Pacific Life policies are issued by the related Pacific Life & Annuity Company.

Overall, Pacific Life offers a diverse line of life insurance products, with the notable exception of whole life insurance, having recently parted ways with the old tried and true to focus on universal life.

Pacific Life claims the top spot in indexed universal life sales nationally and is in fourth place for all life insurance.  The company serves nearly 900,000 clients with coverage currently in place, good for over $1 trillion in in-force insurance policies outstanding.

Pacific Life does not currently ranks as one of the best no exam life insurance companies, as it has had a slow move into the world of automated underwriting.  All applicants need to go through full underwriting, which nearly always includes a medical exam.

But, on the other hand, Pacific Life lets existing insureds request re-evaluation of premium rates if, for example, they quit smoking for a year or lose weight.

Pacific Life Financial Ratings

Pacific Life is one of the highest rated life insurance companies.

A.M. Best: A+
Fitch: AA-
Moody’s: A1
S&P Global:  AA-
Comdex Ranking: 93

Pacific Life is a financially sound company with a strong track record for reliability.  The big financial ratings services score Pacific Life just outside the top-tier.

That means policyholders face very little risk that Pacific Life won’t be able to meet its policy obligations.  But there are a few companies that are a little stronger.

Though still conservative-minded, Pacific Life is perhaps a little more adventurous in its investment philosophy than some of its peers at the top of the life insurance industry heap.

Investment-grade fixed-maturity securities and mortgage loans make up the bulk of Pacific Life’s holdings, but substantial investments in real estate and private equity allow the company more potential upside.

In terms of customer satisfaction, Pacific Life scored slightly above average in J.D. Power’s most recent survey of the life insurance industry.

And Pacific Life draws fewer than average consumer complaints to state regulators compared to similarly situated insurance companies.

Pacific Life is not accredited by the Better Business Bureau, and, though the BBB grades Pacific Life at an A-, BBB provides relatively little information on Pacific Life.

Products Offered by Pacific Life:

  • Term Life Insurance
  • Whole Life Insurance
  • Universal Life Insurance
  • Variable and Indexed Universal Life Insurance
  • Annuities, Mutual Funds, and other investment options.

Life Insurance Policies Offered by Pacific Life

Term Life Insurance:

PL Promise Term is Pacific Life’s level-term offering that will be relevant to most consumers.  Coverage levels start at $50,000, and term lengths are available of 10, 15, 20, 25, and 30 years.

Pacific Life offers some of the most competitive term life insurance rates in the marketplace.

Although longer term lengths are limited for older applicants and smokers, the 30-year term is available for new insureds as old as 55.

Promise Term policies include a standard conversion option that lets policyholders convert the term coverage to cash-value life insurance without any additional underwriting.  The option can be exercised any time during a policy’s initial term or until the insured reaches age 70, whichever occurs first.

Pacific Elite Term:  Another level-term policy, Pacific Elite Term, is intended for insureds in the market for higher-dollar term coverage, but with an eye on eventually trading up to universal life.

Policy death benefits start at $750,000 and can go over $3 million for eligible insureds.  Elite Term is available with initial term periods of 10, 20, or 30 years for new insureds between ages 18 and 75.  The twenty and thirty-year terms are unavailable for new insureds older than 50 and 65, respectively.

Like Promise Term, Elite Term also includes a conversion option that allows term coverage to be swapped for a cash-value policy without any additional underwriting.

Elite Term’s conversion option provides for a conversion credit applied to the new policy.

Or, instead of converting, policyholders can opt to renew coverage annually (for an increased premium) when a policy’s initial term concludes.

Final Expense (whole life): Pacific Life does not currently offer any whole life policies marketed as final expense insurance.

Universal Life Insurance

Pacific Life is an industry leader in universal life and has the product lineup to prove it.  Prospective policyholders looking for the flexibility and growth potential that UL provides have nine policy options to choose from—highlighted by four different indexed UL (IUL) policies, three variable UL (VUL) policies, and two ordinary UL policies.

The two UL options from Pacific Life are Versa-Flex Venture UL and PL Promise GUL.  Versa-Flex Venture is what you might call a standard UL policy.

It features long-term coverage and flexible premiums and coverage amounts, subject to minimum premium requirements.  A standard no-lapse rider guarantees coverage for up to 20 years, which can be extended through purchase of a No Lapse Guarantee Rider.  Cash value is guaranteed to grow at least 2% annually, with rates increasing if market rates do.

PL Promise Guaranteed UL provides permanent UL coverage that is guaranteed not to lapse until age 90 or for life, as long as minimum premium obligations are met.

Though the policy is designed to emphasize permanent coverage over cash value, an optional Return of Premium Feature lets policyholders who surrender the coverage obtain a refund of some or all premiums paid to date.

Indexed Universal Life

Pacific Life is the industry’s top seller of IUL, with a suite of IUL options linking cash-value growth to equity market indexes and mitigating losses in down markets.    The four IUL policies vary in the differing policyholder goals prioritized.

Discovery Xcelerator IUL II is intended for purchasers who want extended life insurance coverage but are focused more on cash-value growth for retirement funding. Policyholders can apportion cash value between several equity-index options and a guaranteed-growth fixed account.

Indexed Accumulator 6 is marketed to businesses and business owners, prioritizing high cash value in the early years after a policy is issued.  Like the Flex 16 whole life policy, it could be used to protect a business against a key person’s death or provide a source of liquidity through a cash-value surrender.

Discovery Protector IUL is designed as an estate-planning tool for efficiently transferring wealth to succeeding generations and guarantying estate liquidity.  The policy is alternatively marketed as a tool for funding business-continuity plans.

And Indexed Estate Preserver III is a survivorship policy covering two insureds and paying out upon the death of the second.  The policy can be useful in estate planning and also provides potential for early growth and easy cash-value access that helps protect a surviving insured after the other insured’s death.

Variable Universal Life

Pacific Life’s variable UL policies are intended for policyholders who want both a permanent death benefit and increased cash-value growth potential—but are also willing to undertake some risk of non-performance in down markets.  In each case, policies have typical UL premium and benefit flexibility, with cash-value growth linked to the performance of investments chosen by the policyholder from among multiple options offered by Pacific Life.

Select VUL II is geared toward flexibility in coverage, premiums, and investment options.  Select Harbor VUL is designed as a long-term wealth-building tool.  And Admiral VUL emphasizes investment options with relatively low fees.

Available Life Insurance Riders

Accelerated Death Benefit Rider (Terminal Illness):  If the insured is diagnosed with less than 12 months to live, the policyholder can elect to receive a portion of the policy’s proceeds early, with any accelerated amounts deducted from the future death benefit.

Waiver of Premium Rider:  If the insured becomes totally disabled for at least six months, premium obligations are waived while the insured remains disabled.

Children’s Level Term Insurance Rider:  This rider provides for up to $10,000 in term coverage for an insured’s children up to 18 years old.

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