Understand the charges and risks
A VUL provides lifelong protection and growth potential, and it has costs and risks that deserve your full attention before you decide.
Where the costs come from
Pacific Select Harbor VUL’s charges, current and maximum, are listed in the prospectus. Your personalized illustration includes the Summary of Policy Charges & Credits Report.
| Charge | What it is | How it works |
|---|---|---|
| Premium load | Deducted from each premium payment before it is applied to the policy. | Reduces the amount added to your cash value. |
| Cost of insurance charge | The monthly charge for the death benefit protection, based on factors such as age, health rating and the amount at risk. | Generally increases with age. |
| Administrative charge | A monthly policy charge. | Deducted from cash value. |
| Coverage charge | A monthly charge described in the prospectus and shown in your illustration. | Deducted from cash value. |
| Asset charge | A monthly asset-based charge assessed across all investment options. | May reduce the effective yield of the fixed options. |
| Fund expenses | Each underlying variable investment option’s own management and operating expenses. | Reflected in investment option performance. |
| Surrender charge | May apply if you surrender the policy during its early years. | Your illustration and the prospectus show the schedule. |
| Loan interest | Interest charged on outstanding policy loans. | Unpaid interest adds to the loan balance. |
The risks to understand
Market risk
Subaccount values can fall. You could lose money, including principal, and cash value is not guaranteed.
Lapse risk
If cash value can’t cover monthly charges, the policy may lapse without additional premium, ending coverage.
Loan and withdrawal risk
Loans and withdrawals reduce cash value and death benefit. A lapse with a loan outstanding can create a tax bill.
Tax and MEC risk
Funding above IRS limits can make the policy a modified endowment contract, changing how withdrawals and loans are taxed.
Early surrender risk
Surrendering in the early years may return less than you paid because of surrender charges.
Insurer risk
Guarantees, including the fixed options’ minimum rates, depend on the claims-paying ability of the issuing insurer.
Habits that keep a policy healthy
- Fund the policy consistently and avoid long premium gaps
- Review an in-force illustration at least once a year
- Rebalance toward your target allocation
- Use loans and withdrawals sparingly and with a repayment plan
- Revisit coverage after major life events
Read the prospectus before you decide
A VUL policy is a variable product. The current prospectus describes the policy's features, charges, investment options and risks in full. Ask Markist for the current prospectus and review it carefully.
Questions to ask about any illustration
Your personalized illustration shows how Pacific Select Harbor VUL could work for you. These five questions help you read it with confidence, and Markist will walk through each one with you.
- What’s guaranteed?
Separate guaranteed values from non-guaranteed ones, which are not promises.
- What returns are assumed?
Ask to see low or negative investment performance, too.
- What does it cost?
The premium load, monthly policy charges and any surrender charge, plus the expenses of the investment options you choose. The prospectus lists them all.
- What if I take a loan?
How loans and withdrawals would reduce values and the death benefit.
Questions about costs?
Ask for a personalized illustration that shows current and maximum charges for your situation.