What We Will Cover in this Annuity ReviewIn this annuity review, we will be covering the following details regarding the Pacific Life Expedition Fixed Deferred Annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How this annuity is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
If you’ve been in the process of looking for a financial vehicle that can provide you with the security of principal, as well as an ongoing stream of income in retirement, then the Pacific Life Expedition Fixed Deferred Annuity may be a viable option for you. That’s because this annuity offers safety from market ups and downs, as well as other guarantees that have been built directly into the contract. But prior to moving forward with the purchase of this, or any other annuity, it can be extremely advantageous to have a deeper understanding of how fixed deferred annuities work, and how they may – or may not – work well with your particular financial objectives, both now and in the future. Over the past decade or so, annuities have risen substantially in popularity. One reason for this is because they can offer a guaranteed income stream during retirement – and because of this and other benefits that they provide, the number of financial advisors who offer annuities has also risen a great deal. Unfortunately, though, some of the advisors who offer annuities may not always be presenting them in the proper manner. Not that they are trying to do their clients wrong, but more so because annuities can be somewhat confusing. In turn, without the proper training and experience, some advisors may not be presenting annuities the way that they should be presented. They may also not be able to answer all of the more in-depth questions that you may have – but that is necessary in order to make a well-informed annuity purchase decision. Even for very well-educated consumers, there are many annuities out there in the market – and particularly those that provide more “bells and whistles” – that are difficult to comprehend. Yet, when you are considering the purchase of any annuity, steps should be taken to ensure that you have a firm grasp on what it is that you are buying – particularly because you could be plunking down a substantial amount of your overall retirement savings. Also, annuities are always considered to be a long-term financial vehicle. Once you have purchased one, it can be difficult – and quite costly – to get out if you happen to change your mind. This is where the Annuity Gator comes in!
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- Highest income payouts
- Lowest Fees
- Top-rated annuity carriers
- Guaranteed income for life
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Pacific Life Expedition Fixed Deferred Annuity at a Glance
|Type of Product||Fixed Deferred Annuity|
|Standard & Poor's Rating||AA-|
|Phone Number||(800) 722-4448|
Opening Thoughts on the Pacific Life Expedition Fixed Deferred AnnuityPacific Life has more than 145 years of experience in helping its clients to grow and protect wealth. The company works with individuals, families, and businesses – and it provides a long list of financial and insurance products. As of year-end 2016, Pacific Life held roughly $143 billion in total assets, and for the year 2016, it paid out $2.3 billion in insurance and annuity benefits to its clients, policyholders, and beneficiaries. The company has received very high ratings from the insurer rating agencies, including a(n):
- A+ (Superior) from A.M. Best Company
- A+ (Strong) from Fitch Ratings
- A1 (Good) from Moody’s Investor Service
- AA- (Very Strong) from Standard & Poor’s
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Pacific Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners. For more details on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How Pacific Life Describes the Expedition Fixed Deferred AnnuityAccording to Pacific Life, the Expedition Fixed Deferred Annuity is a long-term contract between you and the insurance company that helps:
- Grow retirement income through the power of tax deferral
- Lock in guaranteed interest rates for a term that you choose
- Convert your assets into guaranteed lifetime retirement income
How an Insurance or Financial Advisor Might Pitch this AnnuityGiven that life is filled with so many uncertainties, when you have the opportunity to receive a guarantee, it can be a nice benefit – particularly when they have to do with your financial options. With that in mind, when it comes to the Pacific Life Expedition Fixed Deferred Annuity, it is likely that an insurance or financial advisor would key in on the fact that you can obtain a guaranteed rate of interest for a set period of time, and that you can also count on a set amount of income from this annuity in the future. However, whenever you have a guarantee presented to you, you could also find that there are certain “tradeoffs” that you need to accept in order to attain those benefits. This can be the case with the Pacific Expedition Fixed Deferred Annuity. Here, for instance, the longer your interest rate guarantee period, the longer you will also be subject to surrender charges on the annuity. So, for instance, a five-year rate guarantee will also have five years of surrender charges. Likewise, seven years of interest rate guarantee will equate to seven years of surrender charges if you should take more than 10% of your contract value out of the annuity. Plus, while guaranteed interest rate period can be nice, and can provide you with some predictability, this isn’t necessarily always a good thing for other reasons, too. For instance, what if rates rise and you miss out on the opportunity of earning more on your money? You could opt for the RateAdvantage feature on the Expedition annuity. But, while this optional feature allows you the possibility of getting a higher rate down the road, if you take a close look at the fine print, choosing this option will result in an initial guaranteed interest rate that is lower than those who do not choose this feature. Does that really make much sense? Only if you are the offering insurance company! On top of that, according to Pacific Life, “The amount of the rate increase will be subject to a maximum, known as the Maximum Anniversary Rate.” What?! It is important to note that the credit enhancement that you receive is not counted as a part of your purchase payment. So, if you need access to your money and you surrender the annuity contract, while you are guaranteed to get back at least your total purchase payments (minus any fees and/or withdrawals), the enhancement amount is not included. In addition, the amount of the credit enhancement that you receive is considered to be earnings and is there for considered to be taxable upon withdrawal. Also, while tax-deferred compounding can indeed help to grow and compound your money exponentially, this is a feature that is found on all annuities, so that really doesn’t make the Expedition fixed deferred annuity from Pacific Life stand out.
What About Any Fees on the Pacific Life Expedition Fixed Deferred Annuity?You may also need to be mindful of any fees that are associated with this annuity. Here, even though you are allowed to withdraw up to 10% of your purchase payment(s) in the first year, and 10% annually during the remainder of the withdrawal charge period, you could incur surrender charges if you take out more than that. In this case, the duration of the surrender charge period will be the same as the interest rate guarantee period, as follows:
|5 Years (% Charge per Withdrawal)||7||7||7||6||4||0||0||0|
|7 Years (% Charge per Withdrawal)||7||7||7||6||5||4||3||0|
The Annuity Gator’s End Take on the Pacific Life Expedition Fixed Deferred AnnuityWhere it works the best: The Pacific Life Expedition Fixed Deferred Annuity, while not for everyone, could be a good option if you are seeking:
- A guaranteed rate of interest for a set period of time (in this case, either 5 or 7 years)
- Safety of principal, regardless of what happens in the market
- A lifetime income that you can count on
- Want the potential for higher growth
- Need to access your money during the annuity’s surrender period
- Do not plan to use the lifetime income feature