How it works
Pacific Life Index Advisory Fixed Indexed Annuity: product description and policy
The Pacific Life Index Advisory is a Fixed Indexed Annuity (FIA) plan that offers the annuitant (annuity investor) the opportunity to earn a portion of an index-linked market return without incurring the risk of market downside. This is a suitable plan for people looking for a straightforward fixed-indexed annuity to grow and protect their retirement savings.
Let’s look at the high-level fine print of the Pacific Life Index Advisory Fixed Indexed Annuity, and then we will discuss each point in detail.
| Product Name | Index Advisory |
|---|---|
| Issuing Company | Pacific Life |
| AM Best Rating | A+ (2nd of 13 ratings) |
| Initial Guaranteed and Withdrawal Charge Period(s) | 5 and 7 years |
| Maximum Issue Age | 85 Years |
| Minimum Initial Purchase Amount | $25,000 |
| Interest Crediting Options | - 1-year point-to-point with cap - 1-year performance-triggered - Fixed interest rate |
| Plan Types | Qualified and Non-qualified |
| Indexes | S&P 500 Index and MSCI EAFE Index |
| Free Withdrawals | 10% after the first completed contract year through the end of the Surrender Charge period |
| Death Benefit | The death benefit will be equal to the greater of the contract value or the Guaranteed Minimum Surrender Value and is paid upon the death of the first owner or last annuitant. Pro rata index-linked interest is credited to the contract value on the Notice Date (the date Pacific Life receives the death benefit claim in good order) |
| Optional Riders | - Paid Interest Enhanced Death Benefit |
| Surrender Value | Guaranteed to receive the greater of the contract value (minus applicable optional benefit charges, a market value adjustment (MVA), and/or withdrawal charges) or the Guaranteed Minimum Surrender Value. |
| Guaranteed Minimum Surrender Value | The Guaranteed Minimum Surrender Value equals 91% of purchase payments (minus any withdrawals), accumulated at a fixed interest rate, which is set at contract issue. |
The Pacific Life Index Advisory Annuity is almost identical for both policy tenures, except for the crediting period, surrender charge schedule, and indexing rates. For ease of discussion and better clarity, we will discuss the Pacific Life Index Advisory 5 (unless otherwise mentioned) for the rest of the article.
Any annuitant (maximum age at the time of policy issue: 85) can purchase the Pacific Life Index Advisory Annuity with a minimum initial purchase amount of $25,000. In return, they will earn a portion of market index returns (calculated using a formula we will discuss shortly), credited over the chosen crediting period. Apart from the regular crediting period, various events may trigger earnings credit: free withdrawals, a long-term care/terminal illness/injury event, or a death benefit payable.
At the time of this review (Aug 2025), this was the published figure. For current rates, see Current Rates ↓.
The Pacific Life Index Advisory Annuity allows the annuitant to choose one or more crediting strategies tied to the S&P 500 and the MSCI EAFE Index to determine the earnings crediting formula. Both of these indexes offer two crediting strategies each, along with a fixed-rate guaranteed interest strategy (bringing the total to five strategy options). Below, we briefly discuss each of the available index options.
- S&P 500 Index: The S&P 500 index is one of the most popular and oldest indexes in the world. It tracks 500 large-cap publicly traded stocks listed in the United States, serving as a barometer for the overall U.S. equity market. It is a reliable index and has often succeeded in the test of time.
- MSCI EAFE Index: The MSCI EAFE Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia, and the Far East, excluding the U.S. and Canada. The Index is available for a number of regions and market segments/sizes and covers approximately 85% of the free float-adjusted market capitalization in each of the 21 countries.
It's important to understand that, like all fixed indexed annuities, the crediting strategies associated with the Pacific Life Index Advisory Fixed Indexed Annuity come with earning rate limiting mechanisms like cap rates, performance triggers, etc., meaning that you will be credited only a part of the index return to your annuity. These rates change frequently; I will discuss more on these rates more shortly.
Note: In addition to allocating the funds in the following indexes, the annuitant also has the option to allocate funds at a fixed interest. These Fixed Rates tend to change from time to time. The Fixed Value Rate for the 5-year withdrawal charge period at the time of writing this article was 4.25%.
Rates and costs
Rates, bonus, surrender charges, and costs
The earnings crediting formula
The earnings crediting formula is the most important part of this annuity discussion. It is important to know that we don’t simply get the index return credited to our annuity. The company has a few rate-limiting mechanisms (cap rates, trigger rates, and others) that affect our earnings. These rates tend to change over time, and the updated rates can always be checked on the company’s website or with your trusted financial advisor. You can view the latest indexing rates of this annuity here.
The Pacific Life Index Advisory Annuity uses five crediting strategies:
| Index | Crediting Strategy |
|---|---|
| S&P 500 Index | Point-to-Point Option with Cap |
| Performance-Triggered Index Option with Declared Rate | |
| MSCI EAFE Index | Point-to-Point Option with Cap |
| Performance-Triggered Index Option with Declared Rate | |
| Fixed Account Option | Declared Rate |
Let’s explore the Pacific Life Index Advisory Annuity rate chart to gain a better understanding of earnings crediting strategies. Please note that these rates were last updated in March 2026 and may change over time. For the most current Pacific Life Index Advisory Annuity rates, contact your trusted financial advisor.
The table above shows that the annuitant can choose from two underlying indexes - the S&P 500 Index and the MSCI EAFE Index, offering a total of 5 crediting options (4 index-based and 1 fixed). These indexes offer multiple interest crediting options, such as performance-triggered and cap rates. Additionally, there is an option to allocate funds to a fixed account with a declared interest rate. As an annuitant, you can allocate your premium to one or more of these crediting strategies.
Let’s now explore how each of these crediting strategies works.
- Point to point with Cap: Cap rate is the most important terminology in an FIA. It means the rate at which your interest-earning capacity is capped. For example, if an index returned 13% but your contract’s cap rate is 7%. In this situation, you will be eligible for an interest credit of only 7%. It doesn’t matter how much the index goes above the cap rate; the maximum interest you can earn is the cap rate.
- Performance-Triggered Index Option with Declared Rate: A flat or positive index return triggers the declared interest rate to be credited to the contract value. If the index return is negative, no interest is credited, but there will be no loss, and the contract value will remain the same. The declared interest rate is set at contract issue and applies for the 1-year indexed term. In this case, the performance-triggered rate for the S&P 500 Index is 7.60%. It means that if the S&P 500 Index doesn’t go negative for a given 1-year period (even if the growth is 0% and not negative), the interest credited will be 7.60% irrespective of the S&P 500's actual return. It is noteworthy that the company offers a good performance triggered rate for the S&P 500 Index when compared to other similar policies.
- Fixed Account Option: If you opt for a fixed account option, you simply earn the fixed rate for a particular period specified by the company before your policy begins. These rates are usually low compared to other fixed avenues, such as CDs and MYGAs, so you should avoid fixed rates in a general scenario. The 1-year fixed rate on this policy at the time of writing this article was 4.25%.
At the time of this review (Aug 2025), this was the published figure. For current rates, see Current Rates ↓.
I believe that, at this time, the 1-Year S&P 500 Performance Triggered strategy, the MSCI EAFE point-to-point with cap, and the S&P 500 point-to-point with cap offer the most compelling value. These strategies provide a strong balance of growth potential and downside protection.
Liquidity
How can you access your money?
Each year, you are allowed a 10% free withdrawal of your contract value without incurring charges, fees, or penalties.
At the time of this review (Aug 2025), this was the published figure. For current rates, see Current Rates ↓.
Should your needs change unexpectedly, and you need to take an excess withdrawal (a withdrawal above the free withdrawal amount available in a given contract year), you may be entitled to access additional monies. However, certain charges and penalties may apply. Any amount withdrawn over the remaining free withdrawal amount is subject to a Surrender Charge. Below is the Surrender Charge schedule for the Pacific Life Index Advisory Annuity.
In case you need to surrender your policy, a Market Value Adjustment (MVA) will be applied to the portion of the withdrawal or surrender that exceeds the free withdrawal amount during the withdrawal charge period.
This surrender charge schedule is only valid for select states (California usually has a different rate structure) for the Pacific Life Index Advisory Annuity product. For complete details about each state, you may contact your trusted financial advisor.
Once the surrender charge period ends, you can typically access your full account value without fees. However, any withdrawal reduces both your account value and, if applicable, the income base tied to optional riders, which may impact future guaranteed income.
Current surrender charges
See the live surrender scheduleAnnuitization options
- Life Only – Provides income for as long as you live.
- Joint and Survivor Life – Continues payments over two lifetimes, often used by couples.
- Life with Period Certain (up to 30 years) – Pays income for life, but guarantees payments for a minimum period even if death occurs earlier.
- Period Certain (up to 30 years) – Provides guaranteed payments for a set number of years, regardless of lifespan.
- Single Life or Joint Life with Cash Refund – Ensures that if the annuitant(s) pass away before receiving payments equal to the original premium, the difference is refunded to beneficiaries.
- Single Life or Joint Life with Installment Refund – Similar to the cash refund, but any remaining balance is paid out over time in installments.
Riders and waivers
Riders and waivers
In an insurance policy, riders are an additional provision that can be added to enhance the benefits of the base policy. The Pacific Life Index Advisory Annuity comes with an optional death benefit, enabling annuitants to help protect and enhance the legacy they leave to their beneficiaries.
Interest Enhanced Death Benefit
Interest Enhanced Death Benefit is an optional benefit that guarantees your death benefit will grow annually by the amount of interest credited to your contract, plus an additional 2%, for either 20 years or until age 85, whichever is earlier (different terms for different states). The charge for this benefit is 0.40% of the Death Benefit Base, deducted annually from your contract value (not the Death Benefit Base). Your beneficiaries will receive the greater of your Interest Enhanced Death Benefit Base or the standard death benefit amount upon your death. This optional benefit is subject to state and broker/dealer availability and variations. Please refer to the Interest Enhanced Death Benefits brochure for more information and work with your financial professional to determine if this optional benefit is appropriate for your financial needs.
At the time of this review (Aug 2025), this was the published figure. For current rates, see Current Riders ↓.
Also, as with most annuities, the Pacific Life Index Advisory fixed-indexed annuity has free in-built nursing home and terminal illness waivers.
Qualified Nursing Care Benefit – After 90 days of contract, free withdrawal of up to 100% of the contract value is allowed if the owner is confined in a qualified care facility for a minimum of 30 days. Confinement must begin after the contract issue date, and written proof is required from both the qualified care facility and the recommending physician.
Terminal Illness Benefit – After the first contract year, free withdrawal of up to 100% of the contract value is allowed if the owner is diagnosed with a terminal illness. Diagnosis must occur after the contract is issued, and written proof with supporting documentation is required from a qualified physician. Contract/Administrative Charge
The Pacific Life Index Advisory Annuity levies no annual contract or administrative fees.
Note: You may only purchase a Pacific Life Index Advisory Fixed Indexed Annuity if you are a participant in an account established under a fee-based program that is sponsored and maintained by a broker/dealer or other financial intermediary approved by Pacific Life Insurance Company.
Carrier
Company details
You must always keep in mind that, unlike CDs, annuities are not guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other federal insurance agency. An annuity's "guarantee" is only as strong as the insurance company that issues the annuity, so it is always important to assess the issuing company before buying an annuity.
Pacific Life Insurance Company
Pacific Life Insurance Company has been in business since 1868. It has been one of the largest providers of annuities in the US for many years and has regularly been in the top ten Fixed Indexed Annuity Sales. It is one of the Fortune 500 companies, with a ranking of #272 (at the time of writing this article)
It is rated as follows by the rating agencies:
| Rating Agency | Rating |
|---|---|
| AM Best | A+ (2nd of 13 ratings) |
| S&P | AA- (4th of 21 ratings) |
| Fitch | AA- (4th of 19 ratings) |
| Moody’s | Aa3 (4th of 21 ratings) |
Pacific Life Insurance Company has managed to maintain decent ratings for many years. It is considered to be strong and stable financially. As of year-end 2024, some of the financial highlights for Pacific Life include its:
- $16.01 billion in operating revenues
- $15.99 billion of total stockholders’ equity
- $1.47 billion in adjusted operating income
- $238.90 billion in total assets
Thus, going by the operating history and financial numbers, we can safely gauge that you can trust your savings with Pacific Life Insurance Company.
Pros
The plan offers well-known indexes with established histories
Free Enhanced Withdrawal Benefit
This no-fee rider is automatically included for owners under age 65 and includes both a Qualified Nursing Care and Terminal Illness Benefit.
High Guaranteed Minimum Surrender Value
The Guaranteed Minimum Surrender Value is equal to 91% of purchase payments minus prior withdrawals, accumulated at a fixed interest rate, which is set at contract issue. Meanwhile, for other popular annuities, this rate is usually 87.5%.
Multiple Payout Options
Life Only, Life with Period Certain, Joint and Survivor Life, Period Certain, Single Life or Joint Life with Cash Refund, and Single Life or Joint Life with Installment Refund.
Conclusion
Conclusion
With the advancements in healthcare and technology, the average American today lives longer than ever. So, it’s very important to have a stream of income that can grow safely and steadily and that has the ability to provide a fixed, guaranteed income during the retirement years. This helps you mitigate the risk of outliving your income and ensures that you continue to live a decent life even in your retirement.
The Pacific Life Index Advisory Annuity helps you grow your retirement savings with much less risk. Through its indexed annuity, it offers principal protection and the opportunity to participate in the market index without any downside risk. If you are considering buying a Fixed Indexed Annuity that works on the growth front, the Pacific Life Index Advisory Annuity might be an ideal product to look at. However, you must keep in mind that this is a growth annuity and may not be the best suited for people who are super-conservative or at later stages of retirement.