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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

Pacific Life, renowned for its iconic humpback whale advertisements, has been a major player in the life insurance industry for almost a century. The company was founded as The Pacific Mutual Life Insurance Company of California in Sacramento in 1868.

After a quarter-century in San Francisco, the company moved to Los Angeles following the 1908 earthquake that destroyed its previous home office. Today, Pacific Life is headquartered in nearby Orange County, though in 2005, its insurance division shifted its legal home state to Nebraska, attracted by the state’s lower taxes and insurance-friendly regulatory environment. However, this move came at the cost of fewer humpback whales, which have been Pacific Life’s public face since 1997.

Over its long history, Pacific Life has established a reputation as a financially stable life insurance carrier. The company reports having paid out a death benefit on a policy that was issued nearly ninety years earlier in 1930, and it has $171 billion in total assets and over $12 billion in annual revenue, making it comfortably placed within the Fortune 500.

Pacific Life predominantly markets its insurance products through a nationwide network of independent agents, including multiple internet-oriented brokers. Most policies are issued by the 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.

Pacific Life offers a diverse line of life insurance products, with the notable exception of whole life insurance, as the company has recently focused on universal life. Pacific Life claims the top spot in indexed universal life sales nationally and ranks fourth for all life insurance. The company currently serves nearly 900,000 clients, with coverage in place worth over $1 trillion in outstanding insurance policies.

While Pacific Life is not one of the best no-exam life insurance companies, as it has been slow to adopt automated underwriting, all applicants must go through full underwriting, which usually includes a medical exam. On the other hand, existing insureds can request a re-evaluation of premium rates if they quit smoking or lose weight for a year.

Overall, Pacific Life has a strong financial foundation, a diverse product line, and a sizable customer base, making it a reputable life insurance carrier for potential customers to consider.

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 stable company with a strong track record of reliability. While the company is just outside the top tier according to major financial ratings services, policyholders face minimal risk that Pacific Life will fail to meet its policy obligations. However, there are some stronger companies.

Pacific Life is relatively conservative in its investment philosophy, but it is also somewhat more adventurous than some of its peers at the top of the life insurance industry. Although investment-grade fixed-maturity securities and mortgage loans comprise the bulk of Pacific Life’s holdings, significant investments in real estate and private equity allow the company more potential for upside.

In terms of customer satisfaction, Pacific Life received slightly above-average scores in J.D. Power’s most recent survey of the life insurance industry. Additionally, Pacific Life receives fewer consumer complaints from state regulators than other similarly situated insurance companies.

While Pacific Life is not accredited by the Better Business Bureau, the BBB grades the company at an A-. However, the 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 at 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 the 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 guaranteeing estate liquidity. The policy is also marketed as a tool for funding business continuity plans.

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 up to $10,000 in term coverage for an insured’s children up to 18 years old.

Final thoughts…

Pacific Life Insurance is a reputable company that has been around for over a century and has strong financial stability. However, just because it may be a good fit for some people, it doesn’t necessarily mean it is the best option for everyone. The life insurance market is highly competitive, with a vast array of companies offering various types of policies at different prices. To ensure that you get the best policy to suit your needs and budget, it’s essential to shop around and compare quotes from different insurers. By doing so, you can determine which insurance company offers the best value for your money and provides you with the coverage you need. So, while Pacific Life Insurance may be the right fit for you, it’s important to explore other options to make an informed decision.

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