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Life Insurance

Life insurance is most commonly used to help protect your family from any financial effects of your and/or your spouse's premature death. However, it can be difficult to think about or plan for such an event. And, unfortunately, adequate planning is often put off until it's too late.

Although it may sound simple, there are many things to consider. There are many ways to protect your family with life insurance. So, consulting with a life insurance producer can be vital!

Not Only For Family Protection
Life insurance planning is not only for those who support a family. There are several reasons for thorough life insurance planning. For example, have you recently purchased a new home? Have you recently been married? Have you made career changes? Other key purposes of life insurance include retirement and estate planning.

Life Insurance Proceeds & Taxes
Many people don't realize that even though life insurance death benefit proceeds should be paid income tax-free1 to the beneficiary(ies), there's a chance that such proceeds will be included in the value of the insured's estate, which may be subject to estate taxation.2

Employer-sponsored Life Insurance
People often make the mistake of assuming their employer-sponsored life insurance is adequate. However, employer-sponsored life insurance is typically equal to only one year's salary...far from enough for the family provider to protect his or her family adequately. And not enough for the average single person to repay any outstanding debts – often leaving parents and siblings dealing with such bills.

ICC13 CWS-L-1A

Only one premium is necessary to fund Pacific PremierCare Advantage. While this product allows additional premiums, they are not required and do not provide additional Long-Term Care Benefits, a greater Return of Premium Benefit, or increased Death Proceeds (unless a subsequent increase in the policy’s cash value requires a death benefit increase to satisfy IRC Section 7702 requirements). A premium load will apply to each premium payment. Once a sufficient premium has been paid, the long-term care coverage will continue as long as the insured lives; or until the policy is surrendered at the owner’s request; or until the maximum long-term care benefits have been paid; or until policy lapse. Policy charges (cost of insurance and coverage charges) are deducted from the policy’s accumulated value on a monthly basis. Policy lapse will only occur where the policy’s cash value less policy debt is not sufficient to cover monthly policy charges. Prior to lapse, the policy provides 61 days to pay premium sufficient to keep the policy in force.

Reimbursements for covered long-term care expenses are subject to an elimination period and are provided by the Accelerated Benefit Rider (ABR) for Long Term Care (Form #R12ABR or ICC12 R12ABR) and the Extended Benefit Rider (EBR) for Long Term Care (Form #R12EBR or ICC12 R12EBR). (Rider form numbers vary based on state in which policy is issued.) The amount and duration of the maximum long-term care benefits will be based on the benefit options elected at time of application. Coverage elected for longer than two years is only provided through a combination of ABR and EBR. Actual amount and duration of long-term care benefits will vary based on the use of policy benefits and features. Covered long-term care expenses will be reimbursed until the total long-term care benefits are exhausted, which may vary from the elected duration. Premiums for long-term care benefits will vary depending upon the benefit options elected. Charges for ABR, EBR, and any Inflation Benefit Option are included in the initial premium payment.

Pacific Life Insurance Company’s Pacific PremierCare Advantage is subject to underwriting and approval of the application. No medical exam is required, but a Medical Information Bureau (MIB) and prescription report will be ordered and a Personal History Interview and Cognitive Assessment will be performed via telephone as part of the underwriting process. 

Exclusions, Exceptions, and Limitations:  We will not pay benefits for any room and board, care, treatment, services, equipment, or other items for care or services: 1)provided by the Insured’s Immediate Family unless he or she is a regular employee of an organization which is providing the treatment, service, or care; and the organization receives the payment for the treatment, service or care; 2)for which no charge is normally made in the absence of insurance; 3)provided outside the United States of America, except as described in the International Benefit; 4)that result from an attempt at suicide (while sane or insane) or an intentionally self-inflicted injury; 5)provided in a governmental facility(unless otherwise required by law); 6)for which benefits are available under Medicare (including amounts that would be reimbursable but for the application of a deductible or coinsurance amount) or other governmental program(except Medicaid), any state or federal workers’ compensation, employer’s liability or occupational disease law, or any motor vehicle no-fault law.  No benefits will be paid for services received while the Accelerated Benefit Rider (ABR) for Long Term Care and the Extended Benefit Rider (EBR) for Long Term Care are not in force.

This is an insurance solicitation. Pacific Life Insurance Company will provide you with a sample Pacific PremierCare Advantage policy by clicking here.

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 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.

1For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC § 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 § 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 § 101(j). Additionally, a portion of the Pacific PremierCare Advantage’s Death Proceeds may be income taxable if the policy was issued as part of an IRC Sec. 1035 income tax-free exchange. Clients should consult with qualified and independent legal and tax advisors. 

2According 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%.

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. 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. Variable insurance products are distributed by Pacific Select Distributors, Inc. (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and are available through licensed third-party broker-dealers. 

Pacific Life’s Home Office is in Newport Beach, CA.