Indexed universal life insurance (IUL) has become increasingly popular among individuals as a means to protect their loved ones and grow their wealth. However, misinformation and dishonest business practices have plagued the IUL industry, leading to many companies offering bogus scam products to customers. These companies might mislead policyholders about the benefits of an IUL or insert hidden costs that drain their bank accounts. In either case, policyholders can find themselves losing money and unsure of how to proceed.
If you believe you have been subject to fraudulent IUL practices or have been the victim of an IUL scam, contact the IUL lawsuit lawyers at RP Legal LLC. Our attorneys have extensive experience pursuing insurance companies for bad faith and illegal practices. Our firm is one of the leading litigators for IUL disputes and lawsuits and has more experience than any other firm nationwide. Our work and advocacy have recovered millions of dollars for victims of insurance fraud all over the country. We can bring our experience and knowledge to manage your case to help you recover your losses and hold insurance companies accountable for fraudulent business practices. Contact our offices online or call today to speak to an IUL lawsuit attorney serving Arizona.
What Is Indexed Universal Life Insurance?
Indexed universal life insurance (IUL) is a type of life insurance policy with a cash value component and a death benefit. The defining feature of IUL is that its cash value component is tied to a stock or bond market index, like the S&P 500. As stock grows, the cash value component accrues value. IUL is a permanent life insurance policy, so it does not expire, and coverage lasts as long as you continue to pay premiums.
IUL is similar to whole life insurance in that both types of policies contain a death benefit and cash value component. However, whole life insurance’s cash value component is not based on the stock market but instead on a fixed interest rate from the insurance company. With an IUL, the insurance company takes your premiums and invests them in the relevant index (after taking a significant fee for itself). If the stock market does poorly, the cash value component also grows poorly.
The fluctuating rate of return means that IUL policies are generally riskier than whole life insurance policies but carry a higher potential for returns. The more variable nature means that IUL policies generally require more active management than other types of life insurance policies with an investment component.
Despite what the insurance company might tell you, IULs are not investment products. You are not directly buying exposure to the stock market when you buy an IUL. Companies market IULs as investment products to entice people with the promise of high-value tax-deferred growth. Regardless of whether the policy increases in value, the insurance company gets paid from fees they take out of the premiums you pay.
Reasons to File an IUL Lawsuit in Arizona
IULs are much more complex to manage than typical life insurance policies, and the potential to lose money is higher than normal. As such, insurance companies often use deceptive practices to market and sell IUL policies. Insurance companies might withhold key information about the product or make false claims about the financial returns you can expect. Insurance agents and advisors can make a handsome commission from selling IUL policies, so there is an added incentive for them to recommend the product, even if it’s not ideal for the customer.
If your insurance provider has withheld or lied about product information and you wound up losing money, you may be able to sue the insurance company. Below are some of the most common violations that could be grounds for an IUL lawsuit against an insurance provider.
Firm Misconduct
Insurance companies are subject to strict rules concerning how they sell and manage their products. In many instances, lawsuits stem from firm misconduct concerning policy management and employee training.
Insurance brokers have a duty to train their agents responsibly so that they do not make misleading or false statements about their products. If insurance companies fail to properly train their agents or instruct them to make false or misleading statements, you could potentially file a lawsuit against the insurance broker for negligent business practices.
A major problem with insurance companies is that they only present the positives of IULs. The downsides are relegated to footnotes in the materials, if they are even mentioned at all. Insurance companies are legally obligated to fully disclose certain facts about their policies, and misrepresentations and withholding information are grounds for a lawsuit.
Recommending IULs for Older Customers
Insurance companies often promote IULs to older customers who may not have the time to achieve the promised returns. Additionally, older policyholders may be subject to exorbitant fees and high front-end costs that reduce their promised returns.
Deceptive Marketing Practices
Insurance companies and agencies might also use deceptive marketing practices, portraying IUL policies as something they are not. For example, they might market IULs as an investment product or misrepresent management fees you’ll have to pay. Below are some deceptive marketing messages and phrases insurers might use:
- “Tax-free retirement income”
- “Be your own bank”
- “No downsides or market risks”
- “Outperform your 401(k)”
- “Tax shelter for high-income earners”
Overestimating Returns
Insurance agents often rely on pre-made illustrations to demonstrate potential growth. These illustrations are often based on limited data and may significantly overexaggerate your expected investment returns. Insurance companies may also cherry-pick their best historical outcomes and present them as average, leaving out all outcomes where the policyholder lost money.
Fraudulent Practices
Insurance companies may also engage in directly fraudulent practices, such as overcharging fees or stealing money from policyholders. Direct fraud can often be hard to prove due to the complex nature of IUL contracts and their conditions. Some insurance firms have been charged with racketeering through controlling marketing agencies to promote their products fraudulently.
Financial and Insurance Firms We Target
Several large insurance firms have been implicated in class action IUL lawsuits. Below is a list of some of the brokerages and firms we might investigate:
Insurance Companies
- Allianz
- Columbus Life
- Family First Life
- Minnesota Life/Securian Financial
- National Life Group
- Pacific Life
- Protective
- Prudential
- Transamerica
Financial Firms
- Ameritas
- Equis Financial
- Equitable AXA
- Five Rings Financial
- Global Atlantic (Accordia)
- Integrity Marketing Group
- John Hancock
- LifePro Financial
- Mutual of Omaha
- North American
- Penn Mutual
- PHP Agency
- Symetra
- Symmetry Financial Group
- World Financial Group
Often, customers will buy a policy from these groups under false pretenses and end up receiving a massive premium bill they cannot pay. By that time, it’s too late, though – the insurance company has already gotten its money and left you holding the pieces. If one of these companies or organizations has sold you a scam IUL product, the attorneys at RP Legal LLC will spare no resource or effort to hold them accountable under the law.
Examples of IUL Lawsuits in Arizona
In Arizona, there has been significant action against a company called The Quantum Group (formerly called Shurwest) for fraudulently selling IUL policies with illegal interest provisions. In 2022, customers of the insurance company Minnesota Life sued The Quantum Group for fraudulently issuing over 270 illegal IUL policies. According to the complaint, The Quantum Group offered to purchase future income from policyholders in return for a lump sum payment with illegal interest rates attached to repayment schemes. When the company stopped paying income streams in 2018, many policies lapsed as policyholders could no longer fund their policies.
How an IUL Lawsuit Lawyer Can Help
One of the most difficult parts of filing a lawsuit for fraudulent IUL practices is the complexity of the agreements. IUL contracts have nuanced conditions and terms that can be used to take advantage of unknowledgeable customers. An IUL lawsuit attorney from RP Legal LLC can thoroughly examine any insurance contract and determine whether it violated state laws regarding insurance policies or insurance advertising/marketing laws.
If we detect fraud, we can file a lawsuit against the insurance company to force it to pay the promised amount and compensate policyholders for any money they lost. Insurance companies are notorious for using underhanded tactics to avoid paying, but an attorney can push back and represent policyholders during formal litigation.
Contact an IUL Lawsuit Attorney Today
Insurance companies have a major financial incentive to sell IULs, even if they must rely on fraud and misrepresentation to do so. The attorneys at RP Legal LLC can stand up to bad-faith insurance companies who take advantage of those who might lack financial knowledge. We have an established track record of successful life insurance lawsuits and can effectively manage your entire case, from start to finish. We have gone up against some of the largest insurance companies in the industry and walked away victorious, so you can rest easy knowing you are in the hands of accomplished professionals.
Contact RP Legal LLC at our offices online or call (803) 805-7546 today for a case consultation with an IUL lawsuit attorney in Arizona. Consultations are free, and we don’t take a fee unless we win, so there is nothing to lose by getting in touch.