Pacific Horizon IUL 2 Review (2026)

How Pacific Horizon IUL 2 works

Pacific Horizon IUL 2 is indexed universal life insurance. It pays a death benefit when the insured dies. While the insured is alive, part of each premium builds a cash value that can earn interest tied to stock market indexes. Pacific Life launched it on April 8, 2024 and calls it its flagship IUL. It is issued by Pacific Life Insurance Company, which AM Best rates A+ (Superior). For the company's full record, see our Pacific Life company review.

Here is the money flow in plain terms:

1. You pay a premium. Pacific Life takes a premium load off the top.
2. The rest goes into the fixed account first. On the 15th of each month you can move money from there into the index accounts.
3. Each move into an index account starts a "segment" that runs one, two or five years, depending on the account.
4. Every month, Pacific Life deducts the policy's charges from your account value: an administrative charge, a coverage charge, the cost of insurance, and any rider or account charges.
5. When a segment ends, it earns a credit based on how its index moved, within its cap or participation rate. The credit is never below 0%.
6. Later, you can borrow against or withdraw from the cash value, often to supplement retirement income.

The key point: the 0% floor protects the index credit, not your cash value. In a year the index falls, the credit is 0%, but the monthly charges still come out. The cash value can shrink.

This is life insurance, not an investment account. If you are weighing it against one, read is IUL a good investment first.

The three coverage designs

At issue you choose one of three designs, and you cannot change it later:

• Enhanced early surrender value. Aims for higher cash surrender values in the early years, useful if you might need access to the money soon or want it to count as an asset.
• Balanced. Sits between the other two.
• Long-term performance. Aims for more cash value and supplemental retirement income later. This is the design most people buying for accumulation will look at.

Because the choice is permanent, ask for an illustration of each design at the same premium. Compare the cash surrender value in years 5, 10 and 20, not just the numbers at age 85.

Index accounts and current rates

Current caps and participation rates are available on request. Pacific Life's public account guide for this policy is dated November 2024, too old to present as current, so ask for the rates in effect on the date of your illustration. What the guide does give us are the guaranteed minimums, which are part of the contract:

The S&P 500 accounts exclude dividends. The BlackRock Endura Index mixes U.S. stocks and Treasuries and uses daily volatility controls, which is why it can carry high participation rates. See volatility-controlled indexes.

Two guarantees stand out as thin. The 1-Year cap can fall as low as 2%, and the Dynamic Par account's participation can fall as low as 5%. Pacific Life does publish recent declared rates for the Dynamic Par account: on this policy it was 65% in every month from November 2024 through February 2025, the latest entry on its page when we checked in September 2026.

What the terms mean

• Cap: the most the account can credit in a segment.
• Participation rate: the share of the index gain that counts. At 150%, a 6% gain counts as 9%.
• Point to last-year average: the High Par 5-Year account compares the starting index value with the average over the segment's final year, which smooths out a sharp move at the very end.

Hypothetical crediting examples

These examples are hypothetical. The rates below are made up to show the math. They are not Pacific Life's current rates and not a forecast.

Notice the pattern. The capped account does best in modest years. The no-cap account needs a big year to pull ahead. The High Cap account's charge comes out even when the credit is 0%. No one account wins every year, which is why many owners split their money. Our guide to IUL index crediting methods goes deeper.

Pacific Life's guide also shows back-tested crediting rates for each account, built by applying today's caps to past index data. Treat those as marketing math. The caps would not have been the same in those years, and the figures leave out policy charges.

The Enhanced Performance Factor Rider

This optional rider multiplies each segment's index credit by a performance factor in exchange for a monthly charge taken as a percentage of the segment's balance. Pacific Life offers three rider designs on this policy, including a Plus design with a level charge rate.

Pacific Life does not publish the factors and charges for Horizon IUL 2 in its consumer materials. It does publish them for its survivorship sibling, which gives a sense of scale. There, as of June 2026, the richest design carried a 2.36 current factor (1.72 guaranteed) for a guaranteed charge of 7.50% a year. Here is what that means on a hypothetical $10,000 segment:

The rider only helps when the extra credit beats the charge. At a 4% credit you end up with less than you would have without the rider, and in a flat or down year you pay the charge and get nothing. On Pacific Life's other Horizon policies you can switch designs once a year for new segments; ask whether the same applies here. Read IUL bonuses and multipliers before you add one, and ask for Horizon IUL 2's own factors and charges in writing.

Charges

Pacific Life's consumer materials for this policy name the charges but not their amounts. Ask for each one, current and guaranteed maximum, on a signed illustration that includes Pacific Life's "Summary of Policy Charges & Credits Report."

For scale only, Pacific Life's survivorship IUL publishes a current premium load of 6.80% on non-qualified premium (7.80% maximum) and a $10 monthly administrative charge. Horizon IUL 2's amounts may differ. Compare total charges in the illustration, not just the cap. See IUL fees and charges.

Loans and withdrawals

Horizon IUL 2 introduced the Fixed Charge Indexed Loan Rider. You borrow at a guaranteed 4.5% interest charge, and the borrowed amount is credited based on the Loaned 1-Year Volatility Control account. If that account credits more than 4.5%, you come out ahead. If it credits less, the loan grows faster than the money backing it. In a 0% year, you pay the 4.5% and earn nothing on the loaned amount.

Pacific Life's consumer materials for this policy do not list its other loan types or their rates. Its survivorship policy offers standard loans and a variable-rate indexed loan as well, so ask which types Horizon IUL 2 offers and what each costs. A standard loan is steadier. An indexed loan can do better or worse. See IUL policy loans and loans vs withdrawals.

Taxes. Withdrawals up to your premiums paid are generally not taxed, though withdrawals in the first 15 years that come with a cut in the death benefit can be. Loans are not taxed while the policy stays in force and is not a modified endowment contract (MEC). A policy that takes too much premium too fast in its first seven years becomes a MEC, and then loans and withdrawals are taxed as gain first, with a 10% extra tax before age 59 and a half, with certain exceptions. The biggest risk is a lapse: if the policy ends with a loan larger than your basis, the difference becomes taxable income that year. See IUL taxes.

Riders and built-in benefits

Included on eligible policies:

• No-lapse guarantee to age 90. Issued with policies that choose a level or increasing death benefit when the insured is 79 or younger at issue. If you pay the required no-lapse premiums, the death benefit stays in force to age 90 even if the cash value runs dry. Paying only those premiums builds little cash value, and loans or withdrawals can require more premium.

Optional (most carry an extra cost):

• Flexible Duration No-Lapse Guarantee Rider. Extends the guarantee, up to the insured's lifetime, depending on how the policy is structured.
• Enhanced Performance Factor Rider. See above.
• Premier Chronic Illness Rider, Premier LTC Rider and Premier Living Benefits Rider 2. These let you use part of the death benefit for a qualifying chronic illness, long-term care or, under the Living Benefits rider, a terminal illness. Payments reduce the death benefit. Ask what each costs and whether it is available in your state. See IUL living benefits.

We did not find an overloan protection rider in Pacific Life's consumer materials for this policy. If you plan to borrow heavily in retirement, ask whether one is available.

How the illustration is built

You will decide on this policy by reading an illustration, a year-by-year projection of premiums, cash values and death benefits. The guaranteed column assumes maximum charges and minimum crediting. The non-guaranteed column assumes today's charges and an illustrated rate held level for decades.

The NAIC's AG 49-A limits how high that illustrated rate can be. It also limits how much extra credit a multiplier rider or an indexed loan can receive in the projection. Pacific Life does not publish Horizon IUL 2's maximum illustrated rate in its consumer materials, so ask for it. Its guide notes that illustrations assume a 50% participation rate on the Dynamic Par account. Our own rule for hypotheticals is to stay at or below the AG 49-A limit and never above 6.5%. We also suggest running a second illustration 1 to 2 points lower, because real crediting varies and the order of good and bad years matters once loans begin.

Ask for three versions: with and without the performance factor rider, and with standard loans instead of indexed loans. If the policy only works with the rider and indexed loans, you are relying on them. Our guide on how to read an IUL illustration walks through each column.

Who Pacific Horizon IUL 2 fits

• You need permanent life insurance and have used cheaper tax-advantaged options first, such as a 401(k) match and an IRA. See IUL vs 401(k).
• You can fund the policy at or near the tax limit for many years. That is what max-funded IUL means.
• You want to choose between early cash value and long-term growth in one policy, and you will compare all three designs before you pick.
• You value a no-lapse guarantee as a backstop.
• You live outside New York.

Who should look elsewhere

• You may need the money in the first 10 years. Surrender charges apply, and the premium load means early cash values can sit well below premiums paid. Pacific Life's Horizon ECV IUL is built for early cash value.
• You mainly want a death benefit at the lowest cost. Term insurance or guaranteed universal life is built for that. If you want an IUL that leans on guarantees, look at Pacific Life's Trident IUL.
• You cannot commit to steady premiums. Underfunded accumulation IULs are the ones that lapse. See IUL lapse risk.
• You want your cap locked. No IUL does that. Caps and participation rates are current rates that can fall for new segments, down to the contract minimums.
• You live in New York. Pacific Life does not sell this policy there.

To see how this policy stacks up against other accumulation designs, compare it in our IUL comparison tool or see the best IUL for cash accumulation.