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Pacific Life Insurance Company
                                                                    Is Your Client’s
                                                                       Portfolio an
                                                                Unfinished Work of Art?


                                                                            Color It with a
                                                                   Life Insurance Retirement Plan


4/12
MKT12-6                            For Life Insurance Producer Use Only. Not for Use with the Public.
Will There Be Enough?
2/3 of investors between age 21 and 50 doubt they
      will have ENOUGH MONEY FOR RETIREMENT*


64% of Gen X and Gen Y investors expect that retirement
      income will come FROM NON-RETIREMENT ACCOUNTS*


1/3 of small-business owners do not have a PERSONAL
      OR BUSINESS-SPONSORED RETIREMENT **


*“Gen X and Y Investors Worry Retirement Savings Won’t Be Enough,” Michael S. Fischer, AdvisorOne, March 9, 2012.
**”Many Small-Business owners aren’t prepared for Retirement,” Laura Petrecca, USA Today, March 1, 2012.            2 of 21

                                              For Life Insurance Producer Use Only. Not for Use with the Public.
Aspiring to Financial Independence
                                 Client Portrait

   Business
    Owner
   Joe Mitchell
                                                                 Good Saver
                                                              Contributes yearly
                                                           maximum to 401(k) plan &
                                                              non-deductible IRA

                                                  Goals: Save more for retirement and
 Balanced Approach                          protect family while saving for retirement.
                                                                                      3 of 21

             For Life Insurance Producer Use Only. Not for Use with the Public.
3 Financial Challenges
Financial Vulnerability

Outliving Retirement Assets

Rising Taxes




                                                                           4 of 21

      For Life Insurance Producer Use Only. Not for Use with the Public.
Is Your Client Using the
                                            Right Mix?
       ASSETS HELD INSIDE                                                                  ASSETS HELD OUTSIDE                                                                          THE OVERLOOKED
       RETIREMENT PLANS                                                                     RETIREMENT PLANS                                                                                 ASSETS




                                                                                                                                                                                               • Life Insurance
                                                                                                                                                                                           Retirement Plan (LIRP)
                       • 401(K)                                                                                • Stocks                                                                        Death Benefit*
                   • Pension Plan                                                                         • Mutual Funds                                                                  • Roth IRA Distributions
                  • Traditional IRA                                                                         • Real Estate                                                                    • Municipal Bond
                                                                                                                                                                                                    Interest



  Why failing to diversify tax liabilities at retirement could
  potentially hurt your client’s retirement income…
*For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j).                                    5 of 21

                                                                For Life Insurance Producer Use Only. Not for Use with the Public.
Failing To Use Tax Diversification
    ASSETS HELD INSIDE
    RETIREMENT PLANS                                                      What happens if Income Tax
                                                                          Rates go up?
                                                       $100,000                        35% Tax Rate*               50% Tax Rate*

                                                     Withdrawal:                               $100,000                $100,000
                 • 401(K)
             • Pension Plan                          Less Taxes:                                 -35,000                 -50,000
            • Traditional IRA
                                                     Net After Tax                                65,000                 50,000
                                                     Withdrawal:

                                                                             Loss from Taxes:                        $15,000


*Based on the Top Current Federal Income Tax Rate.                                                                                 6 of 21

                                              For Life Insurance Producer Use Only. Not for Use with the Public.
Failing To Use Tax Diversification
  ASSETS HELD OUTSIDE
   RETIREMENT PLANS                                                       What happens if Capital Gains
                                                                          Tax Rates go up?
                                                       $100,000                        15% Tax Rate*               50% Tax Rate*
                                                     Taxable
                                                                                               $100,000                $100,000
                                                     Amount:
                   • Stocks
              • Mutual Funds                         Less Taxes:                                 -15,000                 -50,000
                • Real Estate
                                                     Net After Tax                                85,000                 50,000
                                                     Withdrawal:

                                                                             Loss from Taxes:                        $35,000


*Based on the Top Current Federal Income Tax Rate.                                                                                 7 of 21

                                              For Life Insurance Producer Use Only. Not for Use with the Public.
Failing To Use Tax Diversification
         THE
   OVERLOOKED ASSETS                                                                                What happens if Income Tax
                                                                                                    Rates go up?
                                                                      $100,000                                       35% Tax Rate**                                       50% Tax Rate**
               • Life Insurance
           Retirement Plan (LIRP)                                   Withdrawal:                                                    $100,000                                             $100,000
               Death Benefit*
          • Roth IRA Distributions                                  Less Taxes:                                                                     -0                                                   -0
             • Municipal Bond
                    Interest                                        Net After Tax                                                     100,000                                              100,000
                                                                    Withdrawal:

Has your client                                                                                         Loss from Taxes:
Overlooked this bucket?                                                                                                                                                                               $0
* For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j).                                                                                                                                                                8 of 21
**Based on the Top Current Federal Income Tax Rate.
                                                        For Life Insurance Producer Use Only. Not for Use with the Public.
Characteristics of a LIRP
                                                                                                                                                                                                    PLUS:
                                                                                                                                                                                            Premium Flexibility
                                                                                                                                                                                                     &
                                                                                                                                                                                             Potential Creditor
          More                                                          Tax                                                             Financial                                             Protection***
        Retirement                                                   Advantages                                                         Security
                                                                                                                                           Tax-Free
          Assets                                                               Tax-Free
                                                                            Distributions*                                              Death Benefit**
               Tax-Deferred
               Accumulation
*Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not
occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC §§ 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will
reduce policy values and may reduce benefits.
** For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j).
***State law may provide life insurance and annuities with certain asset protection benefits. As a general rule, a debtor may not transfer property with the intent to avoid debt due to his creditors. The laws
governing asset protection, however, are complex and the consequences of poor planning may be both civil and criminal penalties. Anyone contemplating an asset protection plan should not undertake such without the                     9 of 21
advice of legal counsel.
                                                               For Life Insurance Producer Use Only. Not for Use with the Public.
Framing the Details of LIRP




*Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals
taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See
IRC Secs. 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits.                                                                       10 of 21

                                                          For Life Insurance Producer Use Only. Not for Use with the Public.
Personalize the Proposal
   NEW Navigator Presentation Format




                                                                        11 of 21

   For Life Insurance Producer Use Only. Not for Use with the Public.
Coordinate the Timing
                                                                of Policy Distributions with Other Retirement Sources

                                                                              Qualified Plans & IRAs                                          Life Insurance Retirement
                                                                                                                                                         Plan
   Maximum Age to Defer                                                                          70 1/2                                                              None
   Distributions

   Subject Minimum                                                                                  Yes                                                                 No
   Distribution Requirements


   Death Benefit Proceeds                                                        Generally subject to                                                   Income tax-free*
                                                                                   income taxes*
   Life insurance may be a more attractive asset to die with than a Qualified Plan or IRA.
*For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec.
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 Sec. 101(j).


                                                                                                                                                                                                         12 of 21

                                                     For Life Insurance Producer Use Only. Not for Use with the Public.
LEVEL PREMIUM:                                                                                            $42,896 Annual Premium to Age 65
                                                                                                                                  Total Premiums Paid: $986,618



         What Joe’s Beneficiaries Potentially                                                                        What Joe Potentially
         Could Receive                                                                                               Could Receive
                    Illustrated Net                                                                                            Illustrated Hypothetical
                    Death Benefit*                                                                                                    Distributions
        Assumes Insured’s                                                                                            Assumes Insured’s
                                                                                                                                                     Age 65
        Death At                                                                                                     Retirement At
        Age 42                      $1,037,273                                                                       Distribution Amount:             $163,860
        Age 65                                                                   $2,873,264                          Years Payable:                                                               25
        Age 85                                                                    $816,477                           Total Distributions:                                                 $4,096,500


Assumptions: Male, age 42, Super Preferred Nonsmoker. Pacific Life Insurance Company’s indexed universal life insurance product Pacific Prime IUL, Policy Form #P11P1I or ICC11 P11P1I - Form
number based on state in which policy is issued, current policy charges, assumed indexed crediting rate 7.0%. Initial Face Amount: $1,000,000). Increasing death benefit option policy years 1 – 23 and level
thereafter. Initial Face Amount: $1,000,000. Increasing death benefit option policy years 1 – 23 and level thereafter.
*Net Death Benefit is the death benefit payable to the designated beneficiary after withdrawals and any outstanding policy loans are paid off.
Riders will likely incur additional charges and are subject to availability, restrictions and limitations. Clients should be shown policy illustrations with and without riders to help
show the rider’s impact on the policy’s values.                                                                                                                                                       13 of 21

                                                          For Life Insurance Producer Use Only. Not for Use with the Public.
BENEFITS OF WAITING                3 OPTIONS for the
                                                                        Life Insurance Retirement Plan

                                                       Pacific Prime IUL Illustrated Distributions* at

                                                                 A                Insured’s B                              Insured’s C Insured’s Age 70 with
                                                                                    Age 65                                   Age 70      2% Annual Increase
        Annual Distributions                                                      $163,860                                 $228,653       Initially: $190,760
        Amounts:                                                                                                                            Age 75: 210,614
                                                                                                                                            Age 80: 232,535
                                   40% increase in total amount                                                                             Age 85: 256,738
                                           from age 65
        Years Payable:                                                                           25                                       25                                                         25


        Total Distributions:                                                  $4,096,500                               $5,716,325                                                  $6,110,088
Assumptions: Male, age 42, Super Preferred Nonsmoker. Pacific Life Insurance Company’s indexed universal life insurance product Pacific Prime IUL, current policy charges, indexed interest crediting rate 7.0%.
Initial Face Amount: $1,000,000. Increasing death benefit option policy years 1 – 23 and level thereafter.
*Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the
first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Sections 7702(f)(7)(B),
7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits.

                                                                                                                                                                                                     14 of 21

                                                       For Life Insurance Producer Use Only. Not for Use with the Public.
“By failing to prepare, you are
              preparing to fail.”
                                                                         --Benjamin Franklin




                                                                                       15 of 21

    For Life Insurance Producer Use Only. Not for Use with the Public.
Looking ahead…


                                                                     16 of 21

For Life Insurance Producer Use Only. Not for Use with the Public.
Start NOW…More Flexibility In the Future
                             START                                                       ASSESS                                                      ACCESS                                                      LEAVE
                      Ages: 35 - 48                                         LTC Need Ages: 50-55                                                In Retirement                                                   A Legacy

             Life Insurance                                                                                                          Use LIRP to                                                Death Benefit (less
             Death Benefit                                                                                                           supplement                                                 withdrawals/policy
             PROTECTION +                                                                                                            income for                                                 loans) PAID INCOME
             Tax-deferred                                                                                                            INFLATION,                                                 TAX-FREE3 to the
             GROWTH of Cash                                                                                                          LONGEVITY, or                                              beneficiary
                                                                               DEFEND
             Value                                                           RETIREMENT                                              BOTH with
                                                                             Asset-based                                             INCOME TAX-
                      Policy                                                                                                                                                                                           Asset-
                   Withdrawal or
                                                                           Long-Term Care                                            FREE2 Distributions                                                               based
                       Loan1                                               (LTC) Insurance                                                                                                                              LTC
                                                                                                                                                                                                                     Insurance




               Life Insurance                                                                                                                                                                           Life Insurance
              Retirement Plan                                                                                                                                                                          Retirement Plan
1Distributions from a life insurance to purchase another life insurance policy is considered a replacement of the current life insurance policy under state insurance laws. Any policy withdrawals, loans and loan interest will reduce policy values and may

reduce benefits. There are circumstances in which replacing your client’s existing life insurance or annuity can benefit your client. As a general rule, however, replacement is not in your client’s best interest. You should make a careful comparison of the
costs and benefits of your client’s existing policy and the proposed policy to analyze how a replacement may affect your client’s plan of insurance. You should provide this detailed information to your client and discuss whether replacement is in your
client’s best interest.
2Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the

time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC §§ 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and
may reduce benefits.
3For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). Additionally, a portion of the Pacific PremierCare’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 their independent tax advisor.
                                                                                                                                                                                                                                                   17 of 21
Pacific PremierCare is a flexible premium adjustable life insurance policy with long term care insurance payable through reimbursements.
                                                                   For Life Insurance Producer Use Only. Not for Use with the Public.
Visualize the BIG Picture …


                                                    … By Helping Your
                                                   Clients Complete Their
                                                     Retirement Picture
                                                                          18 of 21

     For Life Insurance Producer Use Only. Not for Use with the Public.
The Art of Retirement Workbook
                                       Portraits to help you identify
                                        the right clients
                                       Benefits of adding life
                                        insurance as an asset to your
                                        clients’ portfolios
                                       Step-by-step guide to the
                                        Life Insurance Retirement Plan



                                                                            19 of 21

       For Life Insurance Producer Use Only. Not for Use with the Public.
Where Do I Start?
       Request the
 “Art of Retirement” Kit



             Visit
  www.paintingretirement.com
           to order


                                                                                 20 of 21

            For Life Insurance Producer Use Only. Not for Use with the Public.
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 Insurance Company, 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.
Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product availability and features may vary by state.
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 this product is purchased. Neither these entities nor their
representatives make any representation or assurance regarding the claims-paying ability of the life insurance company.
Pacific Life Insurance Company’s individual life insurance products are marketed exclusively through independent third-party life insurance producers,
which may include bank affiliated entities.
Non-guaranteed elements are not guaranteed by definition. As such, Pacific Life Insurance Company reserves the right to change or modify any non-
guaranteed element. This right to change non-guaranteed elements is not limited to a specific time or reason.
Some independent third-party life insurance producers, which may include bank affiliated entities, may limit availability of some optional riders based on
their client’s age and other factors.
                                                     Investment and Insurance Products: Not a Deposit – Not FDIC Insured –
                                             Not Insured by any Federal Government Agency – No Bank Guarantee – May Lose Value




                                                            Pacific Life Insurance Company
                                                                         Newport Beach, CA
                                                               (800) 800-7681 * www.PacificLife.com                                                 21 of 21

MKT12-6                                 For Life Insurance Producer Use Only. Not for Use with the Public.

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Art of Retirement LIRP_prime iul_final

  • 1. Pacific Life Insurance Company Is Your Client’s Portfolio an Unfinished Work of Art? Color It with a Life Insurance Retirement Plan 4/12 MKT12-6 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 2. Will There Be Enough? 2/3 of investors between age 21 and 50 doubt they will have ENOUGH MONEY FOR RETIREMENT* 64% of Gen X and Gen Y investors expect that retirement income will come FROM NON-RETIREMENT ACCOUNTS* 1/3 of small-business owners do not have a PERSONAL OR BUSINESS-SPONSORED RETIREMENT ** *“Gen X and Y Investors Worry Retirement Savings Won’t Be Enough,” Michael S. Fischer, AdvisorOne, March 9, 2012. **”Many Small-Business owners aren’t prepared for Retirement,” Laura Petrecca, USA Today, March 1, 2012. 2 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 3. Aspiring to Financial Independence Client Portrait Business Owner Joe Mitchell Good Saver Contributes yearly maximum to 401(k) plan & non-deductible IRA Goals: Save more for retirement and Balanced Approach protect family while saving for retirement. 3 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 4. 3 Financial Challenges Financial Vulnerability Outliving Retirement Assets Rising Taxes 4 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 5. Is Your Client Using the Right Mix? ASSETS HELD INSIDE ASSETS HELD OUTSIDE THE OVERLOOKED RETIREMENT PLANS RETIREMENT PLANS ASSETS • Life Insurance Retirement Plan (LIRP) • 401(K) • Stocks Death Benefit* • Pension Plan • Mutual Funds • Roth IRA Distributions • Traditional IRA • Real Estate • Municipal Bond Interest Why failing to diversify tax liabilities at retirement could potentially hurt your client’s retirement income… *For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). 5 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 6. Failing To Use Tax Diversification ASSETS HELD INSIDE RETIREMENT PLANS What happens if Income Tax Rates go up? $100,000 35% Tax Rate* 50% Tax Rate* Withdrawal: $100,000 $100,000 • 401(K) • Pension Plan Less Taxes: -35,000 -50,000 • Traditional IRA Net After Tax 65,000 50,000 Withdrawal: Loss from Taxes: $15,000 *Based on the Top Current Federal Income Tax Rate. 6 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 7. Failing To Use Tax Diversification ASSETS HELD OUTSIDE RETIREMENT PLANS What happens if Capital Gains Tax Rates go up? $100,000 15% Tax Rate* 50% Tax Rate* Taxable $100,000 $100,000 Amount: • Stocks • Mutual Funds Less Taxes: -15,000 -50,000 • Real Estate Net After Tax 85,000 50,000 Withdrawal: Loss from Taxes: $35,000 *Based on the Top Current Federal Income Tax Rate. 7 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 8. Failing To Use Tax Diversification THE OVERLOOKED ASSETS What happens if Income Tax Rates go up? $100,000 35% Tax Rate** 50% Tax Rate** • Life Insurance Retirement Plan (LIRP) Withdrawal: $100,000 $100,000 Death Benefit* • Roth IRA Distributions Less Taxes: -0 -0 • Municipal Bond Interest Net After Tax 100,000 100,000 Withdrawal: Has your client Loss from Taxes: Overlooked this bucket? $0 * For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). 8 of 21 **Based on the Top Current Federal Income Tax Rate. For Life Insurance Producer Use Only. Not for Use with the Public.
  • 9. Characteristics of a LIRP PLUS: Premium Flexibility & Potential Creditor More Tax Financial Protection*** Retirement Advantages Security Tax-Free Assets Tax-Free Distributions* Death Benefit** Tax-Deferred Accumulation *Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC §§ 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits. ** For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). ***State law may provide life insurance and annuities with certain asset protection benefits. As a general rule, a debtor may not transfer property with the intent to avoid debt due to his creditors. The laws governing asset protection, however, are complex and the consequences of poor planning may be both civil and criminal penalties. Anyone contemplating an asset protection plan should not undertake such without the 9 of 21 advice of legal counsel. For Life Insurance Producer Use Only. Not for Use with the Public.
  • 10. Framing the Details of LIRP *Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Secs. 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits. 10 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 11. Personalize the Proposal NEW Navigator Presentation Format 11 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 12. Coordinate the Timing of Policy Distributions with Other Retirement Sources Qualified Plans & IRAs Life Insurance Retirement Plan Maximum Age to Defer 70 1/2 None Distributions Subject Minimum Yes No Distribution Requirements Death Benefit Proceeds Generally subject to Income tax-free* income taxes* Life insurance may be a more attractive asset to die with than a Qualified Plan or IRA. *For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). 12 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 13. LEVEL PREMIUM: $42,896 Annual Premium to Age 65 Total Premiums Paid: $986,618 What Joe’s Beneficiaries Potentially What Joe Potentially Could Receive Could Receive Illustrated Net Illustrated Hypothetical Death Benefit* Distributions Assumes Insured’s Assumes Insured’s Age 65 Death At Retirement At Age 42 $1,037,273 Distribution Amount: $163,860 Age 65 $2,873,264 Years Payable: 25 Age 85 $816,477 Total Distributions: $4,096,500 Assumptions: Male, age 42, Super Preferred Nonsmoker. Pacific Life Insurance Company’s indexed universal life insurance product Pacific Prime IUL, Policy Form #P11P1I or ICC11 P11P1I - Form number based on state in which policy is issued, current policy charges, assumed indexed crediting rate 7.0%. Initial Face Amount: $1,000,000). Increasing death benefit option policy years 1 – 23 and level thereafter. Initial Face Amount: $1,000,000. Increasing death benefit option policy years 1 – 23 and level thereafter. *Net Death Benefit is the death benefit payable to the designated beneficiary after withdrawals and any outstanding policy loans are paid off. Riders will likely incur additional charges and are subject to availability, restrictions and limitations. Clients should be shown policy illustrations with and without riders to help show the rider’s impact on the policy’s values. 13 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 14. BENEFITS OF WAITING 3 OPTIONS for the Life Insurance Retirement Plan Pacific Prime IUL Illustrated Distributions* at A Insured’s B Insured’s C Insured’s Age 70 with Age 65 Age 70 2% Annual Increase Annual Distributions $163,860 $228,653 Initially: $190,760 Amounts: Age 75: 210,614 Age 80: 232,535 40% increase in total amount Age 85: 256,738 from age 65 Years Payable: 25 25 25 Total Distributions: $4,096,500 $5,716,325 $6,110,088 Assumptions: Male, age 42, Super Preferred Nonsmoker. Pacific Life Insurance Company’s indexed universal life insurance product Pacific Prime IUL, current policy charges, indexed interest crediting rate 7.0%. Initial Face Amount: $1,000,000. Increasing death benefit option policy years 1 – 23 and level thereafter. *Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Sections 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits. 14 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 15. “By failing to prepare, you are preparing to fail.” --Benjamin Franklin 15 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 16. Looking ahead… 16 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 17. Start NOW…More Flexibility In the Future START ASSESS ACCESS LEAVE Ages: 35 - 48 LTC Need Ages: 50-55 In Retirement A Legacy Life Insurance Use LIRP to Death Benefit (less Death Benefit supplement withdrawals/policy PROTECTION + income for loans) PAID INCOME Tax-deferred INFLATION, TAX-FREE3 to the GROWTH of Cash LONGEVITY, or beneficiary DEFEND Value RETIREMENT BOTH with Asset-based INCOME TAX- Policy Asset- Withdrawal or Long-Term Care FREE2 Distributions based Loan1 (LTC) Insurance LTC Insurance Life Insurance Life Insurance Retirement Plan Retirement Plan 1Distributions from a life insurance to purchase another life insurance policy is considered a replacement of the current life insurance policy under state insurance laws. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits. There are circumstances in which replacing your client’s existing life insurance or annuity can benefit your client. As a general rule, however, replacement is not in your client’s best interest. You should make a careful comparison of the costs and benefits of your client’s existing policy and the proposed policy to analyze how a replacement may affect your client’s plan of insurance. You should provide this detailed information to your client and discuss whether replacement is in your client’s best interest. 2Tax-free income assumes, among other things: (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC §§ 7702(f)(7)(B), 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits. 3For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 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 Sec. 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 Sec. 101(j). Additionally, a portion of the Pacific PremierCare’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 their independent tax advisor. 17 of 21 Pacific PremierCare is a flexible premium adjustable life insurance policy with long term care insurance payable through reimbursements. For Life Insurance Producer Use Only. Not for Use with the Public.
  • 18. Visualize the BIG Picture … … By Helping Your Clients Complete Their Retirement Picture 18 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 19. The Art of Retirement Workbook  Portraits to help you identify the right clients  Benefits of adding life insurance as an asset to your clients’ portfolios  Step-by-step guide to the Life Insurance Retirement Plan 19 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 20. Where Do I Start? Request the “Art of Retirement” Kit Visit www.paintingretirement.com to order 20 of 21 For Life Insurance Producer Use Only. Not for Use with the Public.
  • 21. 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 Insurance Company, 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. Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product availability and features may vary by state. 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 this product is purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Pacific Life Insurance Company’s individual life insurance products are marketed exclusively through independent third-party life insurance producers, which may include bank affiliated entities. Non-guaranteed elements are not guaranteed by definition. As such, Pacific Life Insurance Company reserves the right to change or modify any non- guaranteed element. This right to change non-guaranteed elements is not limited to a specific time or reason. Some independent third-party life insurance producers, which may include bank affiliated entities, may limit availability of some optional riders based on their client’s age and other factors. Investment and Insurance Products: Not a Deposit – Not FDIC Insured – Not Insured by any Federal Government Agency – No Bank Guarantee – May Lose Value Pacific Life Insurance Company Newport Beach, CA (800) 800-7681 * www.PacificLife.com 21 of 21 MKT12-6 For Life Insurance Producer Use Only. Not for Use with the Public.