PACIFIC INDEXEDESTATE PRESERVER 2Last Survivor Indexed Universal Life Insurance

ESTATERETIREMENTBUSINESSFAMILY

16-6

Client Guide

Pacific Life Insurance Company

THE FLEXIBILITY OF CASH VALUE LIFE INSURANCE

02

FINANCIAL PROTECTION

A policy’s proceeds are

paid to policy beneficiaries

when both insureds die.

FINANCIAL POTENTIAL

A policy’s cash value

has the potential to grow,

less policy charges.

FINANCIAL FEATURES

A policy’s optional

features are available for

additional life insurance

and financial needs.

SHARE YOUR SUCCESS

You are proud of the life you’ve built together. The memories. The

stories. The cherished assets.

Now might be a good time to start thinking about how to share your success with the next generation.

Pacific Indexed Estate Preserver 2 is last survivor indexed universal life

insurance from Pacific Life Insurance Company. It can help provide your

policy beneficiaries with financial protection through policy proceeds

payable when both insureds have passed away.

After you are both gone, these policy proceeds can be used to help

pay estate settlement costs.

While one or both of you are living, the policy offers flexible features to

help you respond to changing life insurance and estate planning needs.

Policy form #P15SIL, S15IEP2 or ICC15 P15SIL, ICC15 S15IEP2, based on

state of policy issue.

03

ESTATE

Premiums, Charges, and Current Rates

POLICY PREMIUMS: Premiums are flexible. Policy-

owners choose the payment amount and timing. As

long as the policy’s cash value is sufficient to pay

ongoing policy charges, the policy will stay in force.

Indexed universal life insurance generally requires

additional premiums after the initial payment. If either

no premiums are paid or subsequent premiums are

insufficient to continue coverage, it is possible the

coverage will expire.

POLICY CHARGES: The cost of insurance and benefits

provided through the policy is deducted monthly in the

form of policy charges, which include an Administrative

Charge, Coverage Charge, Cost of Insurance Charge,

and any applicable rider charges. Additionally, a premi-

um load is deducted from each premium payment.

To understand how policy charges affect the policy’s

cash value, request a personalized illustration that

includes an Analysis of Charges. Policy charges will

reduce the policy’s effective rate of return.

POLICY SURRENDER CHARGES: If the policy

is surrendered within the first 10 policy years, a

surrender charge will apply. A surrender charge will

reduce the policy’s cash value payable at policy

surrender.

POLICY FACE AMOUNT CHANGES: The face

amount may be increased or decreased, subject to

restrictions, which may impact policy charges and

surrender charges.

NON-GUARANTEED ELEMENTS: Non-guaranteed/

current elements are not guaranteed by definition.

As such, Pacific Life Insurance Company reserves

the right to change or modify any of these elements.

This right to change these elements is not limited to a

specific time or reason.

04

LEAVE A LOVING LEGACYWhat of your legacy will live on? Your smile? Your eyes? Your sound

business sense?

How about your financial legacy? How much of what you’ve worked so hard to build will remain after the financial impact of settling your estate?

Your estate may be comprised of illiquid assets like real estate, rare

art, or other treasured heirlooms. Unless adequately planned, estate

settlement costs may force the liquidation of these prized assets.

Pacific Indexed Estate Preserver 2 may help your beneficiaries pay

any federal or state inheritance, income, or estate taxes and keep your

other assets intact.

05

ESTATE

06

STRATEGIES FOR ESTATES UNDER $10 MILLION

INSURE TWO LIVES MORE EFFICIENTLY

If you’re a married couple or two business owners

with a significant age difference, one of you may

be less insurable than the other. Buying one policy

insuring two lives may be easier to qualify for and

fund than buying two separate policies one on

each insured.

Even if one insured dies and the other lives for years

to come, the policy’s available accumulated value may

be accessed to offer the surviving insured financial

flexibility. At the death of the surviving insured, the

policy’s proceeds are paid to policy beneficiaries to

help preserve estate or business assets by paying

any estate settlement costs due.

OPTIONAL ONE-LIFE INSURED COVERAGE

Pacific Indexed Estate Preserver 2 policy proceeds

are not paid until both insureds have died. If only one

insured dies, premiums may still be due.

To help expand the policy’s flexibility, consider

the optional one-life insured term rider that pays a

separate death benefit at the named insured’s death.

This type of coverage can insure one or both of you

individually. The proceeds may be used to pay final

expenses or help keep the policy going after one of

you dies.

The Annual Renewable Term Rider-Individual must be

elected at policy issue for additional cost. Rider form

#R13ARI or ICC13 R13ARI, based on state of policy

issue. Riders will likely incur additional charges and

are subject to availability, restrictions and limitations.

When considering a rider, request a policy illustration

from your life insurance producer to see the rider’s

impact on your policy’s values.

Premiums, Payments, and Charges

ESTATES OVER $10 MILLION: Estates over $10

million ( joint) and $5 million (single), adjusted annually

for inflation, will be taxed at a maximum estate tax

rate of 40%, according to the American Taxpayer

Relief Act of 2012.

ESTATES UNDER $10 MILLION: These estates are

not likely to face a federal estate tax liability. However,

currently 20 states have estate and/or inheritance

taxes, some of which have rates as high as 20%,

according to the 2015 U.S. Census Bureau of state

statutes available at taxfoundation.org.

FLEXIBILITY IF NEEDS CHANGE

What if your life insurance or estate tax planning needs

change and you no longer need the policy in its

totality? Talk to your life insurance producer about

your policy’s options, which may include adjusting

your policy life insurance benefit.

If you and your life insurance producer decide

replacing your policy is in your best interest, your

policy comes with options that allow you to convert

your existing policy into a new one—one on both

lives—or split your existing policy into two new ones—

one on each insured.

These options are included with your policy at no

additional charge through the Conversion Rider (Form

#R13CON or ICC13 R13CON, based on state of policy

issue), Policy Split Option Rider (Form #R03PSO), and

Enhanced Policy Split Option Rider (Form #R03ESO).

Riders will likely incur additional charges and are

subject to availability, restrictions and limitations.

When considering a rider, request a policy illustration

from your life insurance producer to see the rider’s

impact on your policy’s values.

There are circumstances in which replacing your

existing life insurance can benefit you. As a general

rule, however, replacement is not in your best interest.

Your life insurance producer can provide you with

detailed information as to how a replacement may

affect your plan of insurance. You should make

a careful comparison of the costs and benefits,

including any applicable surrender charges, of your

existing policy and the proposed policy to determine

whether replacement is in your best interest.

07

ESTATE

08

STRATEGIES FOR ESTATES OVER $10 MILLION

BUILD AN ILIT WITH FLEXIBILITY

If your policy will be owned by an irrevocable life insurance trust (ILIT), adding the right

trust access provisions can build in future flexibility. Talk to your independent legal and tax

advisors about your circumstances.

For example, you may give the ILIT trustee the discretion to borrow or take withdrawals

from the policy’s available cash value. The proceeds may be used to lend the insureds,

or grantors, money as long as the loan bears adequate interest and security. Proceeds

may also be payable to the trust’s beneficiaries, which may be a way to provide care for

dependents with special needs.

By granting the ILIT trustee policy ownership rights, the ILIT trustee may also request policy

changes like lowering the policy’s face amount and premiums, surrendering the policy for

its cash surrender value, or exchange the existing policy for a newer, more recent product

if needs dictate.

BUY TIME TO ESTABLISH AN ILIT

An ILIT by definition is irrevocable. If you are considering establishing an ILIT to own your

policy, consider that, under current tax laws, a transfer of a life insurance policy to an ILIT

within three years of your death may be considered a gift and the amount of the policy’s

death benefit may be included in your estate for estate tax purposes.

You can help offset such a cost by electing the optional Estate Preservation Rider for

additional cost at policy issue. The rider pays an additional death benefit if both insureds

die within the first four policy years to help offset any applicable estate tax incurred.

Effectively, such a benefit gives you the flexibility to buy the policy now and take up to a

year to move the policy into a trust.

Estate Preservation Rider, form #R13EPR or ICC13 R13EPR, based on state of policy issue.

Riders will likely incur additional charges and are subject to availability, restrictions, and

limitations. When considering a rider, request a policy illustration from your life insurance

producer to see the rider’s impact on your policy’s values.

GRANT YOUR SPOUSE ACCESS TO THE POLICY’S CASH VALUE

If the ILIT is drafted as a Spousal Lifetime Access Trust, your nongrantor spouse may be a

beneficiary of the trust. As such, the ILIT trustee may use policy loans and withdrawals to

make distributions directly to your spouse.

09

ESTATE

10

Zero FloatsWhat goes up must come down. Or does it?

Indexed universal life insurance is a form of cash value life insurance. What makes it

different is the way it credits interest to your policy’s cash value if you allocate among

the indexed accounts. Imagine the interest rate your policy credits as a buoy riding

along the waves of stock market movements.

Your policy’s buoy is anchored, meaning it can only float up to a certain point. This

maximum is called the growth cap and it limits your interest crediting rate on the upside.

Your interest rate is guaranteed to be no less than 0%. If the market drops, your cash

value stays where it was, reduced only by policy charges and any distributions you take,

such as withdrawals and policy loans.

With 0% guaranteed, your policy’s cash value is protected against market-based losses.

Indexed accounts do not directly participate in any stock or equity investments, but they

do credit an interest rate based in part on the movements of stock market indexes.

11

THE POTENTIAL TO GROW

The cash value of a Pacific Indexed Estate Preserver 2 life insurance policy has the potential to accumulate and grow.

Each premium you pay, less a premium load, is applied to the policy’s

fixed account, where it will earn a current interest rate, less monthly

policy charges.

You may transfer your policy’s accumulated value from the fixed

account to any combination of available indexed accounts on the 15th

of each month. Each transfer into an indexed account creates a unit of

value called a segment. Any applicable interest is credited at the end

of each segment’s term, based in part on the performance of a major

stock market index, excluding dividends.

Talk to your life insurance producer about your financial goals

and the accounts that might match your current and

long-term needs.

ESTATE

Tax Considerations:

POLICY PROCEEDS: For federal income tax

purposes, life insurance death benefits generally

pay income tax-free to beneficiaries pursuant to IRC

Section 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 Section 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 Section 101( j).

POLICY LOANS AND WITHDRAWALS: For federal

income tax purposes, 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 72, 7702(f)(7)(B), 7702A. Any policy

withdrawals, loans, and loan interest will reduce policy

values and may reduce benefits.

12

13

POLICY PROCEEDS Your policy’s proceeds are paid tax-free to your policy beneficiaries

once both insureds have died. The proceeds might be used to pay

off the family home, satisfy debts, provide for business succession

planning, and/or help ensure efficient estate transfer.

You have three choices for your policy’s payout structure:

A Level Death benefit equals the policy’s face amount.

B IncreasingDeath benefit equals the policy’s face amount,

plus the policy’s accumulated cash value.

C Return of Premium

Death benefit equals the policy’s face

amount plus the sum of premiums paid,

less any withdrawals.

How you structure your policy will affect its charges and surrender

charges, so work with your life insurance producer to build the coverage

that meets your needs.

Accessing the Cash ValueAny available cash value accumulated in a Pacific Indexed Estate

Preserver 2 policy may be accessed through policy loans and

withdrawals tax-free.

ESTATE

Financial Features

Your policy offers optional features called riders for

additional life insurance and financial needs. Riders

help expand the flexibility and protection of your

policy. Some riders are automatically included with

eligible policies. Other riders must be elected at

policy issue for additional costs.

Ask your life insurance producer to provide you with

more details on the financial features available to

you through riders.

Riders will likely incur additional charges and are

subject to availability, restrictions and limitations.

When considering a rider, request a policy

illustration from your life insurance producer to see

the rider’s impact on your policy’s values.

14

15

PACIFIC LIFE THE POWER TO HELP YOU SUCCEEDWhen it comes to choosing the company you will trust with the purchase

of your life insurance policy, consider their treatment of the policyowners

who have purchased before you. Pacific Life has a history of passing along

savings to our policyowners in the form of over 120 pricing improvements to

our inforce policies since 1985.

When you buy a policy from Pacific Life, you become a voting member in our

mutual holding company structure. We make decisions that benefit you and

the long-term financial strength of the company.

You matter to us.

Buying life insurance is a long-term commitment. The company you choose matters.

ESTATE

16-6 15-44240-00 5/16

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, its affiliates, their distributors and 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 or attorney.

Pacific Life Insurance CompanyNewport Beach, CA

(800) 800-7681 • www.PacificLife.com

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 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 products are 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. Some selling entities may limit availability of some optional riders based on their client’s age and other

factors. Your broker-dealer or firm can help you determine which optional riders and investment options are available and appropriate for your clients.

Investment and Insurance Products: Not a Deposit Not Insured by any Federal Government Agency

Not FDIC Insured No Bank Guarantee May Lose Value