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Pacific Life Annuities Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

Pacific Life has been around for 150 years, making it one of the oldest annuity and life insurance companies in the U.S. According to Pacific Life’s financial review from 2019, it has $171 billion in assets. In addition to fixed and variable annuities, Pacific Life also offers immediate annuities. If you’re wondering how an annuity might fit into your retirement income plan, it may be worth consulting with a financial advisor.

Annuity Fees Annuity Type Minimum Initial Premium More Information
Pacific Choice® Find an Advisor

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  • 0.25% administrative fee
  • 0.95% mortality and expense risk fee
  • $50 annual contract fee
  • Various benefit rider fees
Variable annuity $10,000

Annuity Type

Variable annuity

Minimum Initial Premium

Pacific Index Foundation® Find an Advisor

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  • No annual contract fees
  • 0.40% enhanced death benefit fee
Fixed indexed annuity $25,000

Annuity Type

Fixed indexed annuity

Minimum Initial Premium

Pacific Income Provider® Find an Advisor

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  • No annual fees
Single-premium immediate annuity $25,000

Annuity Type

Single-premium immediate annuity

Minimum Initial Premium

Pacific Secure Income® Find an Advisor

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  • No annual fees
Fixed deferred income annuity $15,000

Annuity Type

Fixed deferred income annuity

Minimum Initial Premium


There are four main entities that rate the financial strength of life insurance companies like Pacific Life: Fitch, Moody’s, Standard & Poor’s (S&P) and A.M. Best. Pacific Life received high ratings from each, as A.M. Best ranked it at A+ (superior), Fitch and S&P each ranked it at AA- (very strong) and Moody’s ranked it at A1 (good).

Pacific Choice®

The Pacific Choice® variable annuity from Pacific Life has a $10,000 minimum initial premium for non-qualified annuitants and a $2,000 minimum for qualified annuitants. The maximum issue age is 85 years old.

The core of any variable annuity is its investing capabilities. For the Pacific Choice annuity, you can either pick from pre-built asset allocations or build your own. Automatic rebalancing is also available on a quarterly, semiannual and annual basis, and you can cancel it at any time.

If you’re looking to expand your benefits, Pacific Life will allow you to buy riders at an additional cost. It has a few living benefits that can help you protect your income if the market experiences a downturn. Although the annuity comes with a standard death benefit, you can purchase two upgraded versions of it that will help you leave more for your beneficiaries when you pass away.


Like many comparable products, the Pacific Choice variable annuity comes with a $50 annual fee, though it’s waivable if your net contract value is more than $50,000. Additionally, you’ll need to pay a 0.25% annual administrative fee and a 0.95% annual mortality and expense risk fee.

Any money you earn through this annuity can be withdrawn, but you can only take out up to 10% of your purchase payments annually on a fee-free basis. Should you surpass that 10%, you’ll be subject to the withdrawal fees below. These charges are waived if the account holder is diagnosed with a terminal illness or is placed permanently in a nursing home.

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6+
7% 7% 6% 5% 3% 0%

As is mentioned above, there are a few death benefit riders available through this annuity. If you purchase them, you may need to pay additional fees.

The IRS may charge you a 10% income tax surcharge if you begin taking payments from your annuity before turning 59.5 years old. This is on top of the standard income tax rate you’ll have to pay.

Realistic Return Expectations

Variable annuities are highlighted by their ability to allow account holders to invest in various investment products. With the Pacific Choice annuity, there are a number of investment funds that track specific sectors of the market, including ones from Fidelity, Blackrock, JPMorgan and American Century. Because you can customize which investments you want in your portfolio, returns will vary on a customer to customer basis.

Pacific Index Foundation®

The Pacific Index Foundation® deferred fixed indexed annuity comes in 5-, 7- and 10-year variations. This means that you can choose how long you want your initial interest rate period to last before you receive a new rate. This must be decided on at contract issue.

If you want to open an account, you must be no more than 85 years old and have at least $25,000 ready to invest. You can make up to $100,000 in additional cash payments during the 60-day window after your contract becomes active.

Because this is a fixed indexed contract, you can earn interest based on both the fixed interest rate from Pacific Life and index-linked rates. Should you decide to utilize the indexes, you can pick from the S&P 500® Index and the MSCI EAFE® Index, which tracks large- and mid-cap stocks in markets throughout Europe, Asia and Australia.


This annuity product is devoid of most fees, including annual, administrative and mortality and expense charges. However, should you decide to add on Pacific Life's upgraded death benefit, you'll incur a 0.40% annual fee. This will increase your death benefit by the amount of interest your contract has earned, plus an extra 2%. This will apply for a maximum of 20 years or until you turn 85.

Your withdrawals may be subject to fees if you make a withdrawal prior to the end of your interest rate period. These will vary depending on the term you select at the outset of your contract.

Withdrawal Fee Schedule
Your Term Length Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11+
5-Year 9% 8% 8% 7% 6% 0%          
7-Year 9% 8% 8% 7% 6% 4% 4% 0%      
10-Year 9% 8% 8% 7% 6% 4% 4% 3% 2% 1% 0%

You can make fee-free withdrawals from your annuity within 30 days of opening it. During your first year of ownership, though, you can only withdraw 10% of your total purchase payments without incurring a fee. After that, you can withdraw as much as 10% of your previous anniversary’s contract value fee-free.

Don’t forget that if you begin taking withdrawals from your account before you turn 59.5, you’ll not only need to pay income taxes, but also a 10% income surtax.

Realistic Return Expectations

The interest rate and returns you receive as part of this annuity will vary depending upon when you open it. When you sign your contract, your rate will be specified to you, and it is guaranteed for the entirety of your term length. While indexed returns will vary, below are the fixed rates being offered by Pacific Life as of February 2021:

  • 5-Year Contract: 1.00%
  • 7-Year Contract
    • Less than $100,000: 1.00%
    • Above $100,000: 1.20%
  • 10-Year Contract
    • Less than $100,000: 1.15%
    • Above $100,000: 1.35%

Pacific Income Provider®

If you have at least $25,000 to invest, are no more than 90 years old and need to begin receiving payments as soon as possible, the Pacific Income Provider® immediate fixed annuity might be for you. You can choose one of two additional features for your account, though this must be done at contract issue:

  • Future Adjustment Option: This provides you with a chance to make either a one-time increase or decrease to your income payments. Increases can be made by up to three times the initial payment and decreases can be made by up to half of the initial payment.
  • Inflation Protection Option: This offers you annual payment increases in 2%, 3% and 4% intervals. You must select this when you buy your annuity.

Once you’ve been an account holder for a year, there are two other benefits you can take advantage of:

  • Income Payment Acceleration: If you are over 59.5 years old, receiving monthly payments and are in need of additional income, you can accelerate your payments. Should you do this, you’ll receive three- to six-times your typical monthly payment that month. Because of this, your normal monthly payments will pick back up in the fourth or seventh month. You can use this feature twice.
  • Withdrawal of Guaranteed Income Payments: Non-qualified contract holders can request a lump sum withdrawal from their account. This can be as much as 100% of the present value of your remaining guaranteed income payments.


Pacific Life does not have any annual contract, administrative or mortality and expense fees for this annuity contract. When it comes to withdrawals, you must be at least 59.5 years old to gain eligibility.

Realistic Return Expectations

Like all immediate annuities, the returns of a Pacific Income Provider are subject to the specifics of your personal situation. You can choose to receive payments on a monthly, quarterly, semiannual or annual basis.

Pacific Secure Income®

The Pacific Secure Income® annuity is a fixed, deferred contract that’s fee-free and requires a buy-in payment of no less than $15,000. This product can be purchased by anyone that’s at least 22 years old, though its maximum issue age varies by account type:

  • Traditional IRA: 70 years old
  • Non-qualified and Roth IRA: 85 years old
  • Qualified longevity annuity contract (QLAC): 82 years old

There are more than 10 different income options that you can select from with this annuity. You can also choose whether your payments are monthly, quarterly, semiannual or annual. Because of this, the Secure Income annuity can be easily customized to fit your needs.

If you’re in need of money and have begun receiving annuity distributions, Pacific LIfe will let you accelerate your payments in the form of a lump sum that’s worth anywhere from three to six months of typical payments. Furthermore, non-qualified contract holders can take out the entirety of their remaining guaranteed income payments, though an interest rate adjustment charge will apply.


Annual contract, administrative and mortality and expense fees are completely nonexistent with the Pacific Secure Income annuity. There are also no withdrawal charges, as you can make a 100% lump sum withdrawal of the current value of your remaining guaranteed income payments provided you are at least 59.5 years old.

If you’re forced to withdraw money from your contract before turning 59.5 years old, you may be charged a 10% income surtax by the IRS. This doesn’t even include the standard income tax rate, so be mindful of this when making an early withdrawal.

Realistic Return Expectations

Like the Pacific Income Provider immediate annuity above, these contracts’ returns are difficult to predict because they are so dependent on the specifics of your personal situation. These include how much money you decide to invest, the income options you select, your age and more.

Tips for Your Retirement

  • A financial advisor can help you put together a retirement income plan. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • It would be tough to survive on Social Security payments alone, but the extra income it provides can play a big role in your retirement income picture. To learn about how much you can expect to receive, stop by SmartAsset’s Social Security calculator.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset