Pacific Choice Income Variable Annuity review

Yes, for the right buyer. It is a reasonable option for someone who wants a structured lifetime income guarantee inside a variable annuity contract and is comfortable with the cost tradeoffs. It is not ideal for someone whose main goal is accumulation, who needs frequent access to principal, or who wants a low-cost retirement vehicle — the fee layers make it a poor fit for any of those purposes.

The primary reason to buy Pacific Choice Income is the Future Income Generator IX rider. Specifically, the 6% simple rollup on the Benefit Base before income starts means that a buyer who defers income for several years can build a meaningfully larger guaranteed withdrawal base than the actual account value alone. The secondary reason is carrier strength. Pacific Life is a large, established carrier with A.M. Best A+ and S&P AA- ratings, and for income-focused buyers, carrier financial strength matters more than it does in an accumulation-only context.

I think this annuity is best for someone in their 50s or early 60s who wants to use a portion of retirement assets to create a future income floor and is willing to accept the cost structure that comes with VA-based income guarantees. It works best when the buyer understands how GLWB riders work — that the income base and the account value are two different things — and plans to hold the contract long enough for the rollup to do meaningful work before activating income.

This is a poor fit for someone who mainly wants tax-deferred growth, expects to take large withdrawals before income begins, or has a short time horizon before needing access.

You are not primarily buying variable annuity subaccount returns. You are buying a lifetime income guarantee that happens to be wrapped around a variable annuity structure. The Future Income Generator IX rider is the core of what this product is designed to deliver. The subaccounts provide both growth potential and the account value that the income guarantee depends on — but the income guarantee itself is what justifies the cost stack.

That distinction matters because it affects how you should evaluate the product. The subaccount returns are secondary to whether the income design meets the buyer's actual retirement income needs.

The Future Income Generator IX is an optional GLWB rider elected at issue. It cannot be added later. Once elected, a Benefit Base is established equal to premium paid. Before income starts, the Benefit Base grows at **6% simple interest per year for up to 10 years** — regardless of investment performance. If the account value exceeds the Benefit Base on a contract anniversary, an **annual step-up** locks in the higher value, and subsequent rollups are calculated on the stepped-up base.

When the owner is ready to start income, the withdrawal percentage applied to the Benefit Base depends on age at commencement. For single-life contracts, those percentages range from **4.75% at ages 59.5–64 to 10.80% at ages 95 and older**. For joint-life contracts, percentages are 0.5 percentage points lower at each band. Those withdrawals are guaranteed to continue for life even if the account value is depleted to zero, as long as withdrawals do not exceed the allowed amount.

Withdrawals taken before age 59.5 reduce the Benefit Base proportionately or dollar-for-dollar, whichever results in a lower base — an important constraint for younger buyers. Excess withdrawals after income begins reduce the Benefit Base pro rata.

Because the GLWB restricts which investment options can be used, buyers electing the rider must allocate among a defined list of diversified asset-allocation subaccounts. That limits the buyer's ability to pursue more aggressive return strategies inside the same contract.

The optional return-of-premium death benefit is worth noting as a secondary feature. For an additional 0.15% per year, the death benefit becomes the greater of the contract value or premiums paid adjusted for withdrawals. In a down market scenario where the account value has fallen below the total invested, this provides a meaningful floor for beneficiaries.

Without this rider, the standard death benefit is simply the contract value — no guarantee above market performance. For income-focused buyers who also want to preserve a legacy in adverse markets, the return-of-premium feature adds real protection at a relatively modest cost, though it does layer another charge onto the contract.

This contract uses a 7-year surrender schedule: **8%, 8%, 7%, 6%, 5%, 4%, 3%, then 0%**. Each purchase payment starts its own surrender schedule clock.

Free withdrawals are available in the amount of **earnings plus 10% of remaining purchase payments annually** without surrender charges. That is somewhat more restrictive framing than the "10% of contract value" language common in many annuities — buyers should understand that the free amount may differ meaningfully from 10% of total contract value depending on where growth has occurred.

Surrender charges are waived for terminal illness after the first contract anniversary, for nursing home confinement after 90 days from issue, and for required minimum distributions when enrolled in Pacific Life's RMD program. Even with those provisions, this is a long-term commitment — 7 years is real, and the 8% first-year charge is steep.

The base contract charges are 0.90% for the mortality and expense risk fee plus 0.25% for the administrative fee, totaling **1.15% annually** before any rider costs or subaccount expenses. There is also a $50 annual contract fee, waived when the net contract value reaches $50,000 or more.

Add the GLWB rider at **1.55% per year (single life) or 1.65% (joint)** deducted quarterly from the account value based on the Benefit Base — meaning the rider charge continues even after the account value falls — and the base cost of the income-oriented contract reaches approximately **2.70% before subaccount expenses**. Subaccount expense ratios range from 0.35% to 1.18% depending on fund selection.

The total all-in cost for a buyer with mid-range subaccount expenses could easily reach 3.50% or more annually. That is a significant drag on accumulation and means the 6% rollup on the Benefit Base is doing meaningful compensatory work — it must outrun the fee burden to justify the contract over a simpler approach.

Pacific Choice Income is issued by Pacific Life Insurance Company (in most states) or Pacific Life & Annuity Company (in New York). Pacific Life traces its history to 1868 and operates under a mutual holding company structure. The company carries an A.M. Best rating of **A+** and an S&P rating of **AA-**, both strong marks for a life insurance carrier in the annuity space. Pacific Life has received multiple DALBAR service awards since 1997 and was recognized as a 2023 World's Most Ethical Companies honoree by the Ethisphere Institute.