If you purchased an Ameritas indexed universal life (IUL) insurance policy and watched your cash value decline despite making premium payments, you may be a victim of insurance fraud. Ameritas Life Insurance Company has marketed complex IUL products that often fail to deliver the promised returns. As a result, policyholders face substantial financial losses.

At RP Legal LLC, our experienced IUL fraud attorneys have recovered over $100 million for victims of IUL fraud nationwide. We understand the deceptive practices used to sell these complex insurance products. Additionally, we fight to hold insurance companies and agents accountable for their misconduct.

Understanding Ameritas IUL Fraud Claims

Ameritas IUL fraud occurs when insurance agents or the company itself misrepresent the true nature, costs, or performance potential of indexed universal life policies. These cases typically involve deceptive sales practices that mislead consumers about the risks and benefits of IUL products.

Fraud lawyers often handle these complex cases because IUL policies blur the line between insurance and investment products. The sophisticated nature of these financial instruments requires attorneys with deep knowledge of both insurance law and securities regulations.

What Makes an Ameritas IUL Policy Fraudulent

An Ameritas IUL policy becomes the subject of fraud claims when agents or the company engage in deceptive practices during the sales process. Common fraudulent behaviors include:

Deceptive Marketing of Complex Products: Ameritas markets IUL policies among its life insurance offerings. However, agents often present these policies as sophisticated financial instruments without adequately explaining the risks. Furthermore, agents frequently present IUL policies as foolproof investment strategies. They fail to mention potential policy collapse and fee erosion.

Misleading Policy Illustrations: Sales presentations often feature unrealistic return projections. These projections assume consistently high market performance without accounting for the true costs of insurance, administrative fees, and market volatility. As a result, these illustrations create false expectations about policy performance.

Misrepresentation as Investment Vehicles: Many Ameritas IUL policies are sold as investment products rather than insurance policies. Agents emphasize cash value growth while downplaying the insurance component and associated costs. This practice often constitutes broker misconduct when securities-licensed agents are involved.

Failure to Disclose True Costs: The complex fee structure of IUL policies includes cost of insurance charges, administrative fees, and surrender penalties. These costs are often inadequately explained or completely omitted from sales presentations.

Common Deceptive Practices in Ameritas IUL Sales

Insurance agents selling Ameritas IUL policies frequently employ misleading sales tactics that constitute fraud:

“Tax-Free Retirement Income” False Promises: Agents commonly market IUL policies as providing “tax-free retirement income” similar to Roth IRAs. However, they fail to explain that policy loans reduce death benefits and can cause policy collapse if not managed properly. This misleading comparison often targets retirement benefits planning clients.

“Be Your Own Bank” Misleading Concepts: This popular sales pitch suggests that policyholders can borrow against their cash value without consequences. Nevertheless, agents fail to explain that loans accrue interest and reduce the death benefit. This can potentially cause the policy to lapse.

Overestimated Growth Projections: Sales illustrations often show cap rates and participation rates that are higher than historical averages. This creates unrealistic expectations about policy performance. The Securities and Exchange Commission has issued guidance warning about such misleading projections.

Hidden Fee Disclosure Failures: The numerous fees associated with IUL policies include mortality charges, administrative costs, and fund management fees. These fees are often minimized or buried in complex policy documents.

How Ameritas IUL Policies Fail Policyholders

Ameritas IUL policies frequently underperform expectations due to their complex structure and the deceptive way they are marketed to consumers.

Misleading Policy Illustrations and Projections

Policy illustrations are the primary tool used to sell IUL policies. However, they often present an unrealistic picture of policy performance:

Unrealistic Return Assumptions: Many Ameritas IUL illustrations assume consistent 7-8% annual returns. These returns rarely occur in practice due to market volatility and policy fees. Additionally, these projections ignore the impact of zero-return years and the compounding effect of fees.

Failure to Account for Increasing Insurance Costs: As policyholders age, the cost of insurance increases significantly. Many illustrations fail to adequately project these rising costs. This leads to premium shortfalls and policy collapse. Financial elder abuse lawyers often see these issues in cases involving elderly clients.

Overoptimistic Cap Rate Projections: Illustrations often assume cap rates will remain at current levels indefinitely. However, insurance companies regularly adjust these rates downward based on market conditions and company profitability.

Inadequate Downside Risk Disclosure: While IUL policies offer downside protection through floor guarantees, the illustrations rarely show the cumulative impact of multiple zero-return years combined with ongoing fees.

Hidden Fees That Erode Cash Value

Ameritas IUL policies contain numerous fees that significantly impact policy performance:

Administrative Charges: Monthly administrative fees, often $10-20 per month, may seem small but compound over time. This is particularly true when the policy is underperforming. Understanding IUL fees is crucial for policyholders.

Cost of Insurance Increases: The mortality charges in IUL policies increase with age and can become prohibitively expensive in later years. This forces policyholders to pay higher premiums or watch their cash value decline.

Surrender Charges and Policy Loan Interest: Early withdrawals trigger surrender charges. Meanwhile, policy loans accrue interest that compounds if not repaid. This can potentially cause policy collapse.

Management Fees on Indexed Accounts: The underlying indexed accounts often carry management fees that reduce the credited interest rate. This further limits policy growth potential.

Complex IUL Products and Their Risks

Ameritas markets sophisticated IUL products that carry significant risks often not disclosed to purchasers:

MEC Violations: Aggressive funding strategies can cause policies to become Modified Endowment Contracts. This eliminates many tax advantages and triggers penalties on withdrawals. The Internal Revenue Service strictly enforces MEC rules.

IRS Scrutiny: The IRS closely monitors aggressive strategies involving life insurance. Changes in tax law or IRS interpretation can eliminate expected benefits.

Interest Rate Risk: In low interest rate environments, the guaranteed elements of IUL policies may not provide sufficient returns to keep policies in force. This requires additional premium payments.

Loan Default Consequences: If policy loans exceed the cash value, the policy may lapse. This creates a taxable event for the entire cash value, potentially resulting in significant tax liability.

Legal Grounds for Ameritas IUL Lawsuits

Victims of Ameritas IUL fraud have several legal theories available to recover their losses. The specific circumstances of each case determine which theories apply.

Breach of Fiduciary Duty Claims

Insurance agents and financial advisors owe fiduciary duties to their clients. These duties are frequently violated in IUL sales:

Agent Failure to Act in Client’s Interest: When agents prioritize commission income over client needs, they breach their fiduciary duty. IUL policies often generate higher commissions than simpler insurance products. This creates conflicts of interest.

Inadequate Suitability Analysis: Agents must conduct thorough suitability analyses before recommending IUL policies. Failure to properly assess a client’s financial situation, risk tolerance, and insurance needs constitutes a breach of duty. Broker negligence attorneys frequently handle these cases.

Failure to Monitor Policy Performance: Fiduciary duties extend beyond the initial sale. Agents who fail to monitor policy performance and alert clients to potential problems may be liable for resulting losses.

Recommending Unsuitable Products: IUL policies are complex products that may be unsuitable for many consumers. This is particularly true for elderly clients or those with limited financial resources.

Misrepresentation and Fraud Allegations

Fraud claims arise when agents or insurance companies make false statements or omit material facts:

False Statements About Policy Guarantees: Agents who overstate the guaranteed elements of IUL policies or misrepresent the nature of indexed crediting may be liable for fraud.

Omission of Material Facts: Failure to disclose significant risks, fees, or limitations of IUL policies can constitute fraud by omission. This often involves failure to supervise by brokerage firms.

Deceptive Sales Presentations: Sales presentations that emphasize benefits while minimizing risks may support fraud claims. Similarly, presentations that use misleading comparisons to other financial products may be fraudulent.

Fraudulent Policy Illustrations: Illustrations that use unrealistic assumptions or fail to comply with regulatory requirements may be considered fraudulent.

Unsuitable Investment Recommendations

Suitability violations occur when IUL policies are recommended to inappropriate clients:

IUL Sales to Elderly Clients: IUL policies may be unsuitable for elderly clients who cannot afford the long-term premium commitments. Additionally, they may not live long enough to realize the projected benefits.

Policies Inappropriate for Financial Situation: Recommending expensive IUL policies to clients with limited income or existing debt obligations may constitute unsuitable advice.

Failure to Consider Risk Tolerance: Clients who cannot tolerate the risk of policy underperformance should not be sold IUL policies without clear disclosure of these risks.

Inadequate Needs Analysis: Agents who fail to conduct proper needs analyses may face suitability claims. This is particularly true when they recommend IUL policies when simpler term life insurance would be more appropriate.

The Ameritas IUL Litigation Landscape

While specific Ameritas IUL fraud cases are still developing, the company maintains strong financial stability and regulatory compliance.

Ameritas Company Status and Regulatory Standing

Ameritas Life Insurance Company maintains solid regulatory standing:

Strong Financial Ratings: Ameritas maintains an “A” rating from AM Best as of May 2025. This indicates strong financial stability and claims-paying ability.

Regulatory Compliance: The company remains in good standing with state insurance departments nationwide. No major regulatory actions were reported in 2024-2025.

Life Settlement Market Position: Ameritas actively investigates and opposes potential STOLI (Stranger-Originated Life Insurance) activities. This demonstrates commitment to regulatory compliance.

Anti-STOLI Compliance: Court documents show the company actively monitors policies for potential STOLI violations. Furthermore, they advocate for legislative solutions to prevent abuse.

Industry-Wide IUL Scrutiny

The IUL industry faces ongoing regulatory oversight:

State Insurance Department Oversight: State regulators maintain oversight of IUL sales practices. They focus on proper disclosure requirements and suitability standards.

FINRA Oversight: The Financial Industry Regulatory Authority oversees broker-dealers involved in IUL sales. However, enforcement actions specific to IULs are less common than for variable products.

Consumer Protection Initiatives: State and federal agencies continue consumer protection efforts related to insurance sales practices. The Consumer Financial Protection Bureau has issued warnings about complex insurance products.

Regulatory Guidance: Regulators require clear disclosures regarding volatility, cap rates, policy charges, and lapse risks under NAIC Model Regulation frameworks.

How to File an Ameritas IUL Fraud Lawsuit

If you believe you are a victim of Ameritas IUL fraud, taking prompt action is important to protect your rights and maximize your recovery.

Documenting Your Ameritas IUL Losses

Proper documentation is important for building a strong case:

Policy Statements Showing Declining Value: Gather all policy statements that demonstrate how your cash value has declined despite premium payments. These documents provide clear evidence of policy underperformance.

Premium Payment Records: Maintain records of all premium payments. This includes any additional payments required to keep the policy in force. These records help quantify your out-of-pocket losses.

Original Sales Materials and Illustrations: Preserve all sales materials, policy illustrations, and marketing brochures provided during the sales process. These documents often contain the misrepresentations that form the basis of fraud claims.

Communication with Agents or Advisors: Save all emails, letters, and notes from meetings with insurance agents or financial advisors. These communications may contain admissions or evidence of deceptive practices.

Gathering Evidence of Deceptive Sales Practices

Building a strong case requires evidence of the deceptive practices used to sell your policy:

Sales Presentation Materials: Obtain copies of any PowerPoint presentations, handouts, or other materials used during sales meetings. These often contain exaggerated claims about policy performance.

Agent Training Documents: If available, agent training materials can reveal whether agents were instructed to use deceptive sales practices or to downplay policy risks.

Marketing Brochures and Advertisements: Company marketing materials may contain misleading statements about IUL policies that support fraud claims.

Recorded Sales Calls or Meetings: Some sales presentations are recorded for compliance purposes. These recordings can provide direct evidence of misrepresentations.

Working with Experienced IUL Attorneys

Choosing the right legal representation is important for IUL fraud cases:

Choosing Attorneys with IUL Experience: IUL cases require knowledge of insurance law, securities regulations, and complex financial products. Look for attorneys with experience in IUL litigation. Our about us page details our firm’s extensive experience in these complex cases.

Understanding Contingency Fee Arrangements: Most IUL fraud cases are handled on a contingency fee basis. This means you pay attorney fees only if you recover money. Understand the fee structure before hiring counsel.

Preparing for FINRA Arbitration: Many IUL cases are resolved through FINRA arbitration rather than court litigation. Your attorney should have experience with the arbitration process.

Building a Strong Case Strategy: Successful IUL cases require careful preparation and strategic planning. Work with attorneys who understand how to build compelling cases against insurance companies and agents.

Compensation Available in Ameritas IUL Cases

Victims of Ameritas IUL fraud may be entitled to various forms of compensation. The circumstances of each case determine the available compensation.

Types of Damages You Can Recover

Several categories of damages may be available in IUL fraud cases:

Out-of-Pocket Premium Losses: You may recover the premiums paid into the policy. This is particularly true if the policy was sold through fraud or misrepresentation.

Lost Opportunity Costs: If you would have invested your money differently but for the fraudulent sale, you may recover the difference between your actual losses and what you would have earned in suitable investments.

Emotional Distress Damages: In cases involving egregious misconduct, you may be entitled to compensation for the emotional distress caused by the financial losses.

Punitive Damages: When fraud is proven, punitive damages may be awarded to punish the wrongdoer and deter similar conduct.

Recent IUL Settlement Amounts and Verdicts

The IUL litigation landscape provides guidance on potential recovery amounts:

Pacific Life $1.5M Verdict Precedent: In May 2024, RP Legal LLC‘s Robert Rikard obtained a $1.5 million verdict against Pacific Life Insurance Company in the Karen Shelstad case. This demonstrates that significant recoveries are possible in IUL fraud cases. You can view more of our case results on our website.

Historical Settlement Patterns: IUL settlements have historically ranged from tens of thousands to millions of dollars. The amount depends on the premiums paid and the extent of the misconduct.

Factors Affecting Compensation: Recovery amounts depend on factors such as the size of the policy, the extent of misrepresentations, the financial harm suffered, and the strength of the evidence.

Recovery Timeline Expectations: IUL cases typically take 12-24 months to resolve. However, complex cases may take longer.

Why Choose RP Legal LLC for Your Ameritas IUL Case

RP Legal LLC has established itself as a national leader in IUL fraud litigation. We have the experience and resources necessary to take on major insurance companies.

Over $100 Million Recovered for IUL Fraud Victims: Our track record speaks for itself. We have recovered substantial amounts for clients nationwide who were victims of IUL fraud and other investment misconduct.

28 Years of Securities Litigation Experience: Founding partner Robert Rikard has been fighting for investor rights since 1997. He has developed deep knowledge in complex financial fraud cases.

National Practice with Local Representation: We handle cases nationwide while providing personalized attention to each client. Our Columbia, South Carolina office serves clients throughout the Southeast.

Contingency Fee Structure – No Upfront Costs: We advance all case costs and only collect attorney fees if we recover money for you. This arrangement aligns our interests with yours. Additionally, it provides access to justice regardless of your financial situation.

AV Preeminent Martindale-Hubbell Rating: Robert Rikard holds the highest possible rating from Martindale-Hubbell. This reflects peer recognition of his legal knowledge and ethical standards.

Recognized Legal Authority: Our work has been recognized in legal and industry publications. This demonstrates our knowledge in investment fraud litigation.

Frequently Asked Questions About Ameritas IUL Fraud Lawsuits

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Contact RP Legal LLC Today

If you believe you are a victim of Ameritas IUL fraud, contact us today for a free consultation. Call (803) 805-7546 or complete our contact form to discuss your case with our experienced IUL fraud attorneys.