Announcing IRC Sec. 7702 System Readiness and Policyowner Notice for Pacific PremierCare® Choice

From PacLife:

We are updating our illustration and administrative systems so that Pacific PremierCare Choice 1 life insurance policies with long-term care benefits issued or paid on or after Jan. 1, 2021 will reflect the new tax-related premium limits outlined under IRC Section 7702, per the Consolidated Appropriations Act, 2021 (H.R. 133).

Important dates:

September 17, 2021 – Navigator quote system updated

September 24, 2021 – Administrative systems updated

October 1, 2021 – Existing policies issued or paid on or after Jan 1, 2021 reprocessed

October 5, 2021 – Policyowner notifications sent

Impact to Existing Policyowners

Existing policyowners do not need to take any action currently.

The new tax limits have no impact on Pacific PremierCare Choice required premiums, death benefits, long-term care benefits, or cash values. The only impact is to increase the tax-related premium limits that may impact some policies’ modified endowment contract (MEC) status.

The new tax-related premium limits will automatically be applied to Pacific PremierCare Choice policies issued on or after Jan 1, 2021. Certain multi-pay policies may no longer be considered modified endowment contracts (MECs) as a result. Policies issued before January 1, 2021 are not affected.

Policyowner Notice

We will begin notifying impacted policyowners of the new tax-related limits and potential changes to MEC status via a mailing (see sample letter A and sample letter B) beginning the week of October 5, 2021.

Inflight Cases

A new quote may be required for any inflight cases not issued or paid by September 24, 2021.