What do we cover in this review?
In this review of the Pacific Life Insurance Company’s Pacific Income Provider annuity, we will be discussing the following information:
- 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.
Over the past decade or so, as life expectancy has significantly increased, one of the primary fears on the minds of retirees is outliving income in the future. Adding fuel to the fire is the extremely volatile market, which – given even a slight “correction” – could essentially wipe away years of savings.
The good news is that there is a solution to the income dilemma. One way to help you ensure that you not only have an ongoing retirement income but one that could last for the remainder of your life is to purchase an annuity. These products, issued by insurance companies, will typically offer a lifetime income option that guarantees you an incoming cash flow for as long as you need it.
But, before you run out and sign on the dotted line for any annuity, it is important to understand that not all annuities are alike. In addition to that, these products will often come with an insane amount of “fine print”, so while you may think that the product will offer you certain benefits, you may actually need to endure certain fees, charges, and/or tradeoffs in order to get the benefits you had anticipated.
Therefore, because immediate annuities require that you contribute a large amount of money into the account right from the get-go, it is extremely important that you know exactly what it is that you’re getting into, as well as what could happen if you decide that you want to get out of it.
That’s where we come in!
Annuity and Retirement Income Planning Advice You Can Trust
If you’ve never been to our website, please allow us to personally welcome you to Annuity Gator. We make up a team of annuity experts who focus on providing comprehensive and unbiased annuity reviews.
We’ve been at this for quite some time now – longer than our competitors – and because of that, we have come to be known as a trusted source of annuity information. But, just like anything that works well, there have also been a number of “copycat” websites that have popped up over the years.
There are some websites out there that will make some pretty serious claims about the annuities they offer, with the primary intent of luring you in so that you part with your contact information.
If you run across sites like this, be sure that what they are stating is actually true before you part with your hard-earned life savings. One big reason for this is because annuities can be difficult – and expensive – to get out of if you determine that the product you purchase isn’t really performing the way you expected it to.
In order to be perfectly clear here, we want to say that we feel annuities can, in fact, be good products for some people – provided that they are in line with your overall financial goals and needs.
That being said, let’s dive into this annuity review!
The Pacific Life Pacific Income Provider SIPA Annuity at a Glance
|Product Name||Pacific Income Provider|
|Issuer||Pacific Life Insurance Company|
|Type of Product||Single Premium Immediate Annuity (SPIA)|
|Phone Number||(800) 772-4448|
Opening Thoughts on the Pacific Life Pacific Income Provider Annuity
Pacific Life has been helping clients grow and protect wealth for nearly a century and a half. Throughout the years, this insurer has grown and expanded, both in terms of client base and assets under management.
The company held approximately $158 billion in total assets as of year-end 2017, as well as more than $11.2 billion in equity. With more than $9.4 billion in operating revenues and operating income in excess of $774 million, Pacific Life is more than able to uphold its promises to policyholders.
Because of its strong financial footing, as well as its timely payout of policyholder claims, Pacific Life has earned high ratings from the insurer rating agencies, including the following (as of 2018):
- 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
Pacific Life is currently ranked as #313 on the 2018 Fortune 500 list, based on its gross revenue. The company is also ranked as one of the world’s most ethical companies for 2019, and in 2018 earned a DALBAR Insurance Services Award.
Today, with so many employers getting rid of their defined benefit pension plans, it has really become the responsibility of individuals to make sure that they convert their savings over into an income stream – and that the income continues to last throughout the remainder of their lifetime.
A single premium immediate annuity, or SPIA, like the Pacific Life Pacific Income Provider, could fit the bill for solving these issues. However, it is also important to remember that, just like any other financial product, not all annuities are the same. So, it is highly recommended that you take a good, close look at this – or any other annuity that you are considering – before you commit to it.
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 Insurance Company 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.
Want to more about how annuities really work? Click here to receive our updated annuity report.
How Pacific Life Describes the Pacific Income Provider Single Premium Immediate Annuity
On the Pacific Life Insurance Company’s website, the Pacific Income Provider is described as a product that provides predictable income that starts within one year of contract issue and pays out over one life, two lives, or for a specified period of time.
There are several different income options to choose from, including a period certain of up to 30 years, as well as single and joint life options. With the life only option, income can be received for the remainder of the annuitant’s lifetime – regardless of how long that may be. Likewise, the joint life only option will pay an income to the annuitant, and then to another individual, for the remainder of his or her life. (Note that income payments may be reduced to 50%, 67%, or 75% once the first individual passes away).
The product offers a death benefit whereby a named beneficiary will receive a return of the paid-in premium if the owner or the annuitant dies or is diagnosed with a terminal illness that results in a life expectancy of 12 months or less before the first annuity payment date.
There are some optional features that may be added to the Pacific Income Provider annuity, such as a(n):
- Future Adjustment Option. This is a one-time increase or decrease in payments, based on an anticipated event. Here, you can increase your annuity income payment by up to three times the initial payment, or you may decrease it by up to half of the initial payment.
- Inflation Protection. With the inflation protection option, you can increase your annual annuity payments by 2%, 3%, or 4%.
- For more details on the Pacific Income Provider from Pacific Life, you can check out the product guide HERE.
You can also find an updated product fact sheet HERE.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
If you’ve been presented the Pacific Life Pacific Income Provider Single Premium Immediate Annuity (SPIA) by your current insurance or financial advisor, there are likely a few key items that he or she touched on in order to entice you to purchase it.
First, this product can offer you a guarantee when it comes to income in retirement. This includes providing you with an income stream that will last throughout the remainder of your lifetime, as well as the life of another individual if you so choose. Plus, you have the opportunity to increase the amount of your income over time if you opt for the cost of living adjustment (COLA).
But, while these features could certainly help to ease your worries about running out of income in the future, there are some other areas that you need to also consider prior to plunking down a significant chunk of your hard earned savings.
First and foremost, once this annuity has been converted to income, the decision is non-reversible. This means that you will not be able to dig into your lump sum of cash at will – at least not without having to go through some hoops and abide by the rules of the annuity’s liquidity feature. Given that, it is imperative to keep in mind that the purchase of an annuity is a long term decision.
If the advisor who told you about the Pacific Life Pacific Income Provider annuity did not provide you with a product brochure, you can access one HERE.
Are there Fees and/or Taxes Associated with the Pacific Income Provider Annuity?
If you have been thinking about purchasing an immediate annuity for retirement income purposes, then there is some fee and tax information that you need to consider. These could differ, based on the type of contribution(s) you put into the annuity.
As an example, if you fund the annuity with money from a traditional IRA or 401(k) plan – with funds that have not yet been taxed – then be prepared to pay tax on 100% of your withdrawals.
Today, while income tax rates are still near historical lows, Uncle Sam’s cut of your money can still be significant…and if – or better yet, when – taxes rise in the future, you could end up handing over 50% or more of your income to your “favorite” uncle.
The Annuity Gator’s End Take on the Pacific Life Pacific Income Provider SPIA Annuity
Where it works the best:
Although an immediate annuity might not be right for everyone, the Pacific Income Provider from Pacific Life Insurance Company could be a good option for you if you are seeking the following benefits:
- A reliable income stream right away (or one that starts within 12 months after purchasing the annuity)
- A place to move funds from an IRA, 401(k), or other types of retirement plan so that you can convert it from a lump sum of savings into income
- A solution to the worry about running out of income in retirement
Where it works the worst:
Even though this annuity offers some nice benefits, it might not be for you if you:
- Feel that you may need some (or all) of your funds for other requirements and/or emergencies
- Do not plan to use the annuity for income
If you’ve been considering the purchase of an immediate annuity, but you are still unsure about moving forward because you just don’t know if this is the right financial vehicle for you, then it is imperative that you further your understanding of this product, and that you get all of your questions answered. We can assist you with any of the questions or concerns that you may have. Please feel free to reach out to us directly via our secure online contact form here.
With regard to this particular annuity, the good news is that you (as well as another individual, if applicable) can be assured that you will have income for as long as you need it, based upon the income payout option that you choose.
Even so, though, the only way to really know whether or not this annuity will work well for you and your situation is to have it tested. We can perform this testing for you, using our annuity calculator, and we will provide you the results at no charge or obligation. If you are interested in this information, just simply let us know here through our secure online contact form.
Has This Annuity Review Sparked Any Additional Questions? Did You See Any Mistakes?
Annuities can be complex financial vehicles – and an immediate annuity will often require that you contribute a significant portion of your savings in order to generate income. Given that, it is absolutely essential that you know what you’re purchasing before you lock into a long term financial commitment.
With that in mind, even after reading over our lengthy review here, if you still have any additional questions or concerns regarding the Pacific Income Provider annuity from Pacific Life, please feel free to reach out and contact us, and we will be more than happy to help answer them. If you found that this annuity review was helpful to you, you can also feel free to forward it on and share it with others who you think would also benefit from it.
Because the information about annuities is changing all the time, if you happened to notice any details in this annuity review that should be updated or corrected, then please also let us know that and we will get on the revisions asap.
Are there any other annuities that you would like to see reviewed on our website?
If so, please provide us with the name of the annuity (or annuities), and our team of annuity “geeks” will get on the case and begin adding this information. So, be sure to check back in to AnnuityGator.com again soon.
The Annuity Gator
P.S If you would like to read more of our Pacific Life annuity reviews here are some links to check out:
- Independent Review of the Pacific Life Frontiers ll Fixed Deferred Annuity
- Independent Review of the Pacific Life Expedition Fixed Deferred Annuity
- Independent Review of the Pacific Life Secure Income Deferred Income Annuity as a QLAC
- Independent Review of the Pacific Life Core Protect Advantage Variable Annuity
- Independent Review of the Pacific Life Pac Mariner 7 Year Guaranteed Rate (MYGA) Annuity
- Independent Review of the Pacific Life Pacific Index Choice 6 Fixed Indexed Annuity
- Independent Review of the Pacific Life Pacific Frontiers II, 1 Year Guarantee Fixed Annuity
- Independent Review of the Pacific Life Pacific Odyssey Variable Annuity
- Independent Review of the Pacific Life Pacific Index Foundation Fixed Indexed Annuity
- Independent Review of the Pacific Life Pacific Index Edge Fixed Indexed Annuity
- Independent Review of the Pacific Life Insurance Company’s Pacific Index Advisory Annuity