1. Estate Protection using Life Insurance
Beth Zervas
Manager, Risk Selection
Pacific Life Insurance Company
16-213
For Life Insurance Producer Use Only. Not for use with the public.

2. Disclosure Notice Pacific Life Insurance Company 45 Enterprise
This presentation is designed to provide introductory information in regard to the subject matter covered.
Neither Pacific Life Insurance Company, nor it’s representatives offer legal or tax advise. Your clients
should consult their attorney or tax advisor for complete up-to-date information concerning federal and
state tax laws in this area.
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.
Investment and insurance Products: Not a Deposit – Not FDIC Insured – Not Insured by any Federal
Government Agency – No Bank Guarantee – May Lose Value
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 Company
45 Enterprise
Aliso Viejo, Ca 92656
For Life Insurance Producer Use Only. Not for use with the public.

3. Financial Underwriting
Does it make sense?
Insurable interest for the beneficiary
Economic loss to the beneficiary
Ultimate total line consistent with the need
Affordability
Persistency
For Life Insurance Producer Use Only. Not for use with the public.

4. Estate Protection
Replace the loss to the estate at the death of the insured due to reasonably expected estate settlement costs:
Federal and state transfer taxes
Generation skipping taxes
Funeral and disposition expenses
Debt payment and other settlement costs
For Life Insurance Producer Use Only. Not for use with the public.

5. Financial Underwriting Tools
Application
Inspection Report
Database Search: Prescriptions, Credit Check, and Criminal Court Records
(No contact with the proposed insured)
Cover Letter
3rd Party Financials by CPA or Attorney
Tax Returns
Internet
For Life Insurance Producer Use Only. Not for use with the public.

6. Estate Protection Financial Underwriting Guidelines
Nature of the assets and how their value has changed over time.
Reasonable rate of growth, compounded up to 20 years, depending on the client’s age and risk class.
75% of the life expectancy
Offset by the expected tax rate.
Legacy Planning: Protecting, not Creating Wealth
For Life Insurance Producer Use Only. Not for use with the public.

7. Estate Protection Financial Underwriting Guidelines
Premiums can be paid from current earned or unearned income and, within limitation, liquidation or repositioning of assets.
Generally no more than 20% of assets can be liquidated or repositioned to pay premium on policies purchased for estate protection.
For Life Insurance Producer Use Only. Not for use with the public.

8. Generation 3 (G3) Case Study
Female, Age 32 *
Occupation: Yoga Instructor, Scuba Instructor
Earned Income: $40,000
Male, Age 34 *
Occupation: Teacher
Earned Income: $47,000
*Each has a net worth of over $75,000,000 based on Inspection Report, 3rd party financials, and CPA documentation.
For Life Insurance Producer Use Only. Not for use with the public.

9. Generation 3 (G3) Case Study
Female, Age 30 *
Occupation: Mother
No Earned Income
Male, Age 33 *
Occupation: Sales
Earned Income: $125,000
*Each has a net worth of over $75,000,000 based on Inspection Report, 3rd party financials, and CPA documentation.
For Life Insurance Producer Use Only. Not for use with the public.

10. Cover Letter
Individualized cover letter received with each member of current group of four individuals (G3)
The goal is to purchase life insurance to conserve the estate and pass along as much as possible to the third (G3), fourth (G4), and fifth (G5) generations
Each in their early 30’s & each has a Net Worth over $75,000,000
The plan is to purchase up to $50,000,000 of life insurance on each individual
For Life Insurance Producer Use Only. Not for use with the public.

11. Letter from Estate Planning Attorney
Letter goes into great depth about how the family fortune was made
Reiterated relationship between family members
Provided details of each member of G1, G2, G3
Included details about the value of each trust, their inheritance
Purpose/need of life insurance consistent to previous correspondence
For Life Insurance Producer Use Only. Not for use with the public.

12. Proactive Underwriting Case Study
$16,000,000 Survivorship life insurance on a couple in their 50s
Applying for $10,000,000 life insurance with another carrier
Ultimate Total Line of life insurance = $30,000,000
Application states Income = $2,300,000
Application states Net Worth ~ $40,000,000
Premium Financing
Deferred financial questions on the Inspection Report
For Life Insurance Producer Use Only. Not for use with the public.

13. Proactive Underwriting Case Study
CEO, Publicly Traded company on the NYSE.
Quite a bit of financial information on the internet:
2015 compensation was $4,800,000
June 2016 form 4 SEC filing indicates he owns almost 600,000 shares either directly or via trust
With a share price close to $46, stock alone would be valued at $27MM
With the public financial information available on him, we had sufficient financial justification, waived Tax Returns and 3rd Party information, and issued life insurance coverage being requested.
For Life Insurance Producer Use Only. Not for use with the public.

14. Enlist Your Underwriter? ?
ask ? ?
For Life Insurance Producer Use Only. Not for use with the public.

15. Thank You
For Life Insurance Producer Use Only. Not for use with the public.
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