It offers death benefits and accrues cash value on a tax-deferred basis. Keep in mind that with the Pacific Discovery Xelerator you can mix and match any combination of these strategies together. When you can soften the blow of down-years with zeroes (minus charges), and you can sometimes multiply up-years, this may prove to be winning proposition with less volatility than the actual market. Needless to say, you should verify the concepts and hypothetical projections discussed in this article with a licensed professional using your own data. However, due to the extra charges of the Performance Factor coupled with a top-end participating loan rate of 7.5%, you should proceed with caution when trying to achieve the same effect with the PDX. We’re relegated to showing you a linear 6.21 or worse on their illustration software. Once the Tech-Bubble started popping in 2000 followed by the terrorist attacks on September 11, 2001, we saw every major market index lose somewhere around half of its value or more. Pacific Life Pacific Discovery Xelerator IUL 2 was the #1 selling product for non-variable universal life sales, for all channels combined, for the 4 th consecutive quarter. 5. Click here to learn the difference between mutual vs. stock insurance companies. 1 Pacific Life Insurance Company’s Pacific Discovery Xelerator IUL 2 (Policy Form #P15IUL and S18PDX2 or ICC15 P15IUL and ICC18 S18PDX2, based on state of policy issue). We consider it our mission to balance the sea of opinions out there with indisputable facts coupled with critical thinking. BUT...It needs to be structured properly with a reputable company. Take withdrawals rather than policy loans when optimal in retirement. Pacific Life’s PDX product may not be for ideal for every consumer. 2 … So what did Pacific Life decide to do since they had one of the lower 1-year S&P 500 caps in the industry? 19-70 1 of 6 CLIENT GUIDE PACIFIC DISCOVERY XELERATOR IUL 2 Flexible Premium Indexed Universal Life Insurance 2 This was the $64,000 question for me. Pacific Life uses a higher schedule of charges at the onset of the policy if you elect an increasing death benefit. They thought outside the box and decided to add value horizontally instead of vertically. Therefore, you will find a direct relationship between prevailing bond yields and IUL caps. Some are at 11%, 12%, 13%, even 14% (as of March 2018). The extra silos depicted in blue represent additional indexed crediting potential from the Performance Factor. And remember, these are the three worst periods I can find in the S&P 500’s last 81-years, and they’re not that bad (even without any Performance Factor). IUL’s caps are created with S&P 500 Index options purchased by the insurance company’s bond yield. Click here to read more details from Pacific Life about these 125 different pricing improvements and the savings they passed on to consumers. At Pacific Life, creating analysis for indexed products usually means you will see a graph they call a “Galaxy Chart”. Pacific Indexed Accumulator 5 – perfect … In 2008-2009 the Great Recession delivered a second knock-out blow to markets (as well as investor complacency). Although it may not be suited for every type of consumer, the Pacific Life’s PDX (Pacific Discovery Xelerator) product may be ideal for clients wanting maximum tax-exempt retirement income by channeling market volatility using the traditional 0% floor of an Indexed Universal Life policy along with their new mechanism for growth. Thankfully, Pacific Life is one of the top IUL carriers that allows you to essentially refinance your policy loan between the fixed and participating loans each year on the loan anniversary. Indexed Universal Life Insurance. They knew that the other IUL carriers offering significantly higher caps were defying the math. There may be an argument for having some portion of your cash value allocated to one of Pacific Life’s 1-year uncapped option in all years. However, there’s an incredibly strong argument for tactically allocating even more to the 1-year uncapped option after: You now know that the when your cash value decreases the Performance Factor is more likely to multiply whatever crediting you get the following year. Since your cash value technically doesn’t go down with a policy loan, this would obviously not influence the Performance Factor. Crediting Methods. I’m not sure why that was deemed bad for consumers, but we can no longer do that. 1 selling product for non-variable universal life sales, for all channels combined, for the fourth consecutive quarter. If you choose either the 1-year uncapped S&P 500 option or the 5-year uncapped S&P 500 option, there’s no telling how much indexed crediting you can earn, especially during a jolting bounce-back rally following a market crash. Substantially higher charges supporting this unique opportunity for additional indexed crediting, A mysterious formula as to how these credits will be applied. So before we head into the weeds with algebraic formulas, this schematic below is how I was able to mentally simplify the Pacific Discovery Xelerator’s Performance Factor and wrap my head around it. All of this was fine and good until we entered a multi-year environment with historically low yields. 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