A positive index return is credited to your contract at the end of each contract year, up to the cap. If the return is zero or negative, no interest will be credited, and there is no loss.
Cap: The maximum rate of interest that can be credited at the end of an index term.
A percentage of a positive index return, minus any spread amount, is credited as interest at the end of each index term. If the calculated return after the participation rate and spread are applied is zero or negative, no interest will be credited, and there is no loss.
Index Return x Participation Rate – Spread = Interest Credited
Participation Rate: The set percentage that determines how much of the positive index return will be credited at the end of an index term.
Spread: A percentage that is deducted after the index return is multiplied by the participation rate.
Similar to the Participation Rate method, a percentage of a positive index return is credited to your contract at the end of each index term. However, with this method, the participation rate is enhanced, meaning it is greater than the rate offered through the Participation Rate method. The spread for the Enhanced Participation Rate method will typically be larger than the spread for the Participation Rate method.
Index Return x Enhanced Participation Rate – Spread = Interest Credited
If the calculated return after the enhanced participation rate and spread are applied is zero or negative, no interest will be credited and there is no loss.
When the index return is flat or positive, a declared, fixed interest rate is credited to your contract at the end of each contract year. If the return is negative, no interest will be credited, and there is no loss.
When the index return is positive after the spread is deducted, interest will be credited to the contract at the end of each contract year.
If the calculated return after the participation rate and spread are applied is zero or negative, no interest will be credited, and there is no loss.
Examples above assume $100,000 purchase payment into a fixed indexed annuity on December 31, 2014. The contract owner elects the 10-year withdrawal charge period. The Index-Linked Options shown and term, including associated cap, declared interest rates, participation rates, and spreads, remain unchanged during the period. No withdrawals are taken. Pacific Index Dimensions was first available in 2015. The S&P 500® and MSCI indexes do not include the reinvestment of dividends. Your results may vary.
1The BlackRock iBLD Endura® VC 5.5 ER Index is referred to as the BlackRock Endura® Index for ease of reference.
2The index is composed of USMV (the iShares Edge® MSCI Min Vol USA ETF) and SHY (the iShares® 1–3 Year Treasury Bond ETF).
Not all products or optional benefits are available in all states or firms, and features may vary by state and firm. For more inforamtion, please talk to your financial professional or visit PacificLife.com.
Pacific Index Dimensions is not available in New York or Oregon.
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.
Insurance product and rider guarantees, including optional benefits and any fixed crediting rates or annuity payout rates, are backed by the financial strength and claims-paying ability of the issuing insurance company. They are not backed by the independent third party from which this annuity is purchased, including the broker/dealer, by the insurance agency from which this annuity is purchased, or any affiliates of those entities, and none makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.
Fixed indexed annuities are not securities and do not participate directly in the stock market or any index, so they are not investments.
Annuity withdrawals are taxable as ordinary income when distributed and may be subject to a 10% additional federal income tax if withdrawn before age 59½. For nonqualified contracts, an additional 3.8% federal income tax may apply on net investment income. Withdrawals will reduce the contract value and the value of the beneficiary benefits, and also may reduce the value of any optional benefit.
Rates, renewal caps, declared interest rates, participation rates, and spreads will never be set below the minimum or above the maximum stated in the contract. Pacific Life determines, at its discretion, rates, renewal caps, declared interest rates, participation rates in excess of the minimum guaranteed in the contract, and spreads below the maximum guaranteed in the contract.
The S&P 500® index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by Pacific Life Insurance Company. S&P®, S&P 500®, US 500, The 500, iBoxx®, iTraxx®, and CDX® are trademarks of S&P Global, Inc., or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Pacific Life Insurance Company. Pacific Life’s product is not sponsored, endorsed, sold, or promoted by S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500® index.
The Product and its MSCI EAFE Index-Linked Options referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such Products or any index on which such Products are based. The Policy Contract contains a more detailed description of the limited relationship MSCI has with Pacific Life Insurance Company and any related products.
BlackRock, Inc. and its affiliates (“BlackRock”) is not the issuer or producer of any annuity product associated with Pacific Life Insurance Company, and BlackRock has no responsibilities, obligations or duties to investors in such products. The BlackRock iBLD Endura® VC 5.5 ER Index (hereinafter, the “BlackRock Endura® Index”) is a product of BlackRock Index Services, LLC, and has been licensed for use by Pacific Life Insurance Company. BLACKROCK, BlackRock Endura Index, and the corresponding logos are registered and unregistered trademarks of BlackRock. While Pacific Life Insurance Company may for itself execute transactions with BlackRock in or relating to the BlackRock Endura Index in connection with its annuity products, investors acquire all such annuity products from Pacific Life Insurance Company and neither acquire any interest in the BlackRock Endura Index nor enter into any relationship of any kind with BlackRock upon investing in such products. Pacific Life Insurance Company annuity products are not sponsored, endorsed, sold, or promoted by BlackRock. BlackRock makes no representation or warranty, express or implied, to the owners of any Pacific Life Insurance Company annuity product or any member of the public regarding the advisability of investing in such products, nor does it have any liability for any errors, omissions, or interruptions of the BlackRock Endura Index. BlackRock shall not be liable in any way to the issuer, investors, or any other party in respect of the use or accuracy of the BlackRock Endura Index or any data included therein.
To derive back-tested data for the BlackRock Endura® Index, performance for periods longer than a year has been annualized using a geometric mean. Index returns are price-based total exchange-traded fund (ETF) returns (net of management fees) less 3-month LIBOR; for ETFs not in existence during the timeframe referenced, market and proxy benchmark returns are used which take index total returns less 3-month LIBOR. Proxy benchmarks are indexes that have similar historical exposures and characteristics to the ETFs they represent. Sharpe ratio uses the index’s standard deviation and its excess return (difference between the index’s return and the risk-free return of 3-Month LIBOR benchmark rate) to determine the reward per unit of risk. Back-tested data is calculated by Interactive Data Pricing and Reference Data LLC, the calculation agent of the BlackRock Endura® Index.
The indexes are not available for direct investment.
Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product/material availability and features may vary by state.
The home office for Pacific Life Insurance Company is located in Omaha, Nebraska.
Pacific Index Dimensions (ICC15:30-1401, 30-1401ID, 30-1401MA), including optional riders and endorsements (ICC15:20-1406, 20-1406, 20-1406-2, ICC15:20-1404, 20-1404, 20-1404-2, ICC15:20-1405, 20-1405, 20-1405-2, ICC17:20-1707, ICC16:20-1504, 20-1504, 15-1403MA, 15-1403), are issued by Pacific Life. State variations to contract form series, rider series, and endorsements may apply.