In October 2025 two‑time NASCAR Cup Series champion Kyle Busch and his wife Samantha Busch filed a high‑profile lawsuit against Pacific Life Insurance Company. They allege that a series of Indexed Universal Life (IUL) policies marketed to them as safe, self‑funding “tax‑free retirement plans” instead wiped out more than $8.5 million of their wealth. Represented by RP Legal LLC, the Busches’ lawsuit shined a national spotlight on IUL sales practices and the compensation structures behind them.
Contact RP Legal LLC for a free consultation for Indexed Universal Life Investment Fraud. We represent clients on a contingency basis with no upfront costs. Call (803) 805-7546 or schedule a consultation online.
NASCAR’s Kyle Busch & RP Legal vs. Pacific Life
The Busches purchased several Pacific Life IUL policies between 2018 and 2022. According to the complaint and subsequent interviews, the policies failed to deliver on key promises:
- They were told that if they invested about $1 million per year for five years, the policies would generate $800,000 a year in tax-free income starting at age 52.
- The policies were pitched as “retirement plans that would fund themselves” once the initial premium period ended.
- Instead, the couple received a sixth premium notice and discovered through an independent review that the policies would lapse within 16 months, leaving the $10.4 million they had paid effectively gone.
The Busches allege that Pacific Life and its appointed agent misrepresented the policies as risk‑free investments, failed to disclose high internal charges and failed to warn of the risk of policy lapse. The lawsuit also claims that the agent pocketed up‑front commissions approaching 35 percent of the premiums. When the policies began to collapse and the agent could not explain why, the Busches went public, saying, “What was pitched as retirement income turned out to be a financial trap”.
Because of its visibility, the case is now frequently discussed alongside broader Pacific Life IUL Lawsuit concerns, and many policyholders researching the issue refer to it simply as the Kyle Busch IUL matter.
Pacific Life has responded by emphasizing that IUL policies provide death benefits and growth potential but declined to comment on the specifics of this case.
How Pacific Life’s compensation system contributed to the loss
At the heart of the lawsuit is a policy architecture that independent experts have described as “built to fail.” Pacific Life’s IUL products allow agents to adjust the blend between Basic Coverage (a fully commissionable permanent death benefit) and Annual Renewable Term (ART) Coverage (commission‑free term insurance). Most carriers set a fixed blend or limit the adjustment, but Pacific Life lets agents choose up to 100 percent Basic Coverage, dramatically increasing commissions.
- In the Busches’ largest policy (a $44.5 million death benefit issued in 2020), the agent set the coverage at 100% Basic instead of the default 50/50 Basic/ART blend.
- This single choice doubled his commission and pushed the policy’s “target premium” – the premium used to determine compensation – to $1.49 million, almost matching the $1.5 million per-year funding the Busches agreed to.
- Pacific Life’s unique compensation structure therefore incentivized the agent to sell an oversized policy with an unnecessarily high death benefit, purely to generate a larger commission.
Industry consultant Bobby Samuelson notes that with another carrier the target premium on a $44.5 million policy would have been $500k-$600k; only Pacific Life’s adjustable compensation could push it to $1.5 million.
The agent also designed the policy with an increasing death benefit in year 1, switching to a level death benefit in year 2. This configuration further increased the target premium and the agent’s commission. According to RP Legal’s analysis, there was little legitimate need for such a large death benefit; its primary effect was to inflate fees and commissions. Pacific Life’s compensation system created a perverse incentive to sell clients the most expensive blend possible – a systemic issue now under investigation by RP Legal.
This type of design flexibility is uncommon in the industry. It is one of the reasons why the lawsuit and similar complaints have drawn significant attention, particularly from consumers searching for guidance on Kyle Busch IUL issues and the sales practices involved.
Misleading Illustrations and Excessive Fees
Beyond the compensation structure, the policies failed because of high charges and flawed design assumptions. Independent reviewers found several issues:
- Excessive Fees: Pacific Life structured the Busches’ policies with a fee structure that rapidly consumed their capital. Policy charges – including the cost-of-insurance (COI), premium loads, and other internal fees – devoured a significant portion of early payments. On one policy, cumulative internal charges totaled nearly $6.6 million over the first five years, which amounted to 88 percent of the $7.5 million in total premiums paid during that period. Furthermore, the fees were disproportionately high: for every $1 of “target premium” (the benchmark used for agent commissions), roughly $2.60 in policy charges were deducted, totaling about $3.85 million in these specific charges over a decade. This structure directly explains how most of the Busches’ out-of-pocket contributions were lost to internal costs, not market performance.
- Low Cash Value Growth: The policies’ cash values were allocated to a Fixed Account earning just 2.25 percent while the S&P 500 returned double-digit gains. After the five-year premium period, charges overwhelmed interest credits, causing cash values to decline sharply.
- Flawed Illustrations: Even the original illustrations – run at the maximum rate allowed under industry rules – showed cash values dropping after year 5. According to Samuelson, these policies were “built to fail” because the illustrations projected long-term success while masking near-term losses. The mismatch between rosy illustrations and real-world performance underscores how easy it is for consumers to be misled by complex IUL projections.
- Inefficient Funding Schedule: The five-pay funding schedule left the policies undercapitalized. Section 7702A tests on a seven-pay basis, making five-pay designs inherently inefficient.
All of these factors: high commissions, high death benefits, short funding periods, low credited interest and aggressive policy charges turned what was sold as a “safe retirement plan” into a financial trap. The Busches’ experience illustrates the risks of complex policy designs, particularly when those designs benefit agents more than clients.
Why this case is a wake‑up call for other IUL policyholders
Although Kyle Busch is a celebrity, his experience is not unique. Attorney Robert G. Rikard of RP Legal warns that everyday professionals, retirees and business owners are routinely sold IUL policies as retirement plans without understanding the risks. Victims may not discover the flaws until years later, when escalating COI charges and collapsing cash values reveal the policies’ unsustainability.
The Busches’ case underscores several lessons for current and prospective IUL policyholders:
- Understand the blend between Basic and ART coverage. Policies with high Basic Coverage generate higher commissions and higher COI charges. Ask your agent to explain the split and why it is appropriate for your needs.
- Scrutinize policy illustrations. Illustrated returns may assume high credited rates, low COI increases and long funding periods. Request stress scenarios showing lower returns and earlier funding stops.
- Watch for large death benefits and short funding periods. Excessive death benefits inflate charges without necessarily improving investment performance. Funding a policy over seven or eight years is often more efficient than a five‑pay design.
- Ask about commissions. Up‑front commissions can be 30–35 percent of premiums on some designs. Understand how your agent is paid and whether lower‑commission designs exist.
- Seek independent advice. Consider hiring an independent advisor or attorney to review your policy. They can identify aggressive assumptions, hidden fees and potential misrepresentations.
The core problem of this “blending structure” is the unique ability Pacific Life gives its agents to engineer commission-heavy policy designs by manipulating the blend between Basic Coverage and Annual Renewable Term Coverage.
This flexibility allows an agent to create oversized policies with inflated target premiums and high internal charges that bear little relation to a client’s actual needs. These designs were commonly presented as retirement income strategies and were marketed as safe tax-free plans despite being structurally unsuited for that purpose.
RP Legal is actively investigating Pacific Life policies that were built with these high commission structures and sold as retirement income plans. Policyholders who purchased Pacific Discovery Xcelerator PDX or PDX 2 or similar Pacific Life IUL products that used adjustable blending to maximize commissions may have significant claims for recovery of losses.
RP Legal LLC are National Leaders in IUL Investment‑Fraud Litigation
The issues raised in the Kyle Busch IUL Lawsuit have highlighted how aggressive sales practices, commission-driven policy design, and misleading illustrations can turn a promised tax-free retirement plan into a devastating financial loss. By leveraging Pacific Life’s adjustable compensation structure, an agent configured a policy that consumed nearly all of its premiums and collapsed when expected growth failed to materialize.
If you purchased a Pacific Life IUL or another IUL marketed as a “tax‑free retirement plan” and are experiencing declining cash values, unexpected premium notices or policy lapse warnings, you may have been misled. You can learn more about these issues on the firm’s resources about misleading IUL illustrations and IUL misrepresentation, or explore the specifics of Pacific Life IUL lawsuits.
RP Legal offers free case evaluations and has recovered tens of millions for victims of IUL fraud. Schedule a confidential consultation online now. You deserve honest advice and may be entitled to recover losses from mis‑sold IUL policies.