If you purchased a Prudential indexed universal life (IUL) insurance policy and discovered it was not performing as promised, you may have grounds for legal action. At RP Legal LLC, our attorneys have recovered over $100 million for clients harmed by deceptive IUL sales practices. Additionally, we secured a $1.5 million verdict against Pacific Life in May 2024.

Prudential Financial, one of the largest life insurance companies in the United States, has faced significant regulatory scrutiny in recent years. The company paid $35 million to settle securities fraud allegations in 2024 according to court documents filed by Robbins Geller. Furthermore, the company reached a separate settlement with the Department of Labor in 2023 regarding group supplemental life insurance claim practices. While these regulatory actions involved different business lines than IUL policies, they demonstrate the company’s exposure to regulatory enforcement.

Our legal team focuses on investment fraud and IUL litigation, bringing nearly a decade of experience to each case. We understand the complex nature of these insurance products and the deceptive tactics often used to sell them. If you believe you were misled about your Prudential IUL policy’s performance, fees, or risks, we offer free consultations to evaluate your potential claims.

Understanding Prudential IUL Fraud Claims

What Makes an IUL Sale Fraudulent

Indexed universal life insurance policies become the subject of fraud claims when insurance agents or companies engage in deceptive practices during the sales process. These complex financial products combine life insurance with investment components. As a result, they become particularly susceptible to misrepresentation and unsuitable recommendations.

Fraudulent IUL sales typically involve material misrepresentations about policy performance and expected returns. Agents may present unrealistic illustrations showing consistent high returns without adequately explaining the risks of poor market performance or policy lapse. These projections often fail to account for the substantial IUL fees and charges that can erode policy value over time, as documented by insurance industry analysts.

Another common form of fraud involves the failure to disclose critical information about fees, charges, and risks. Prudential IUL policies contain numerous costs, including cost of insurance charges, administrative fees, and surrender penalties. When agents fail to properly explain these expenses or their impact on policy performance, policyholders cannot make informed decisions about their retirement planning.

Unsuitable recommendations represent another significant category of IUL fraud. Insurance agents have a duty to recommend products appropriate for their clients’ financial situations, risk tolerance, and investment objectives. When agents recommend IUL policies to elderly clients seeking conservative investments or to individuals who cannot afford the premium payments required to maintain the policy, they may be engaging in fraudulent conduct.

Common Prudential IUL Deceptive Practices

One of the most pervasive deceptive practices in IUL sales involves marketing these policies as “tax-free retirement income” solutions. While IUL policies do offer certain tax advantages, agents often misrepresent these benefits by comparing them to Roth IRAs or traditional retirement accounts without explaining the significant differences and limitations, as noted by financial regulatory authorities.

Overestimated policy performance projections represent another common deceptive practice. Sales illustrations may show historical index performance without adequately explaining that IUL policies do not directly participate in market gains. Instead, these policies credit interest based on complex formulas that include caps, spreads, and participation rates that can significantly limit returns.

Many Prudential IUL fraud cases involve the concealment of surrender charges and fees. These policies often impose substantial penalties for early withdrawal or policy surrender, particularly in the first several years. When agents fail to adequately explain these charges or minimize their significance, policyholders may be surprised by the true cost of accessing their money.

Inappropriate sales to elderly or vulnerable clients represent a particularly concerning form of deceptive practice. IUL policies are complex, long-term financial products that may not be suitable for older individuals or those with limited financial sophistication. When agents target these populations without proper suitability analysis, they may be engaging in predatory sales practices that constitute financial elder abuse.

Regulatory Issues with Prudential’s Life Insurance Division

Prudential Financial has faced significant regulatory scrutiny in recent years. In April 2023, the Department of Labor reached a settlement with Prudential Insurance Company of America to address group supplemental life insurance claim practices. The settlement addressed the company’s practice of denying over 200 claims between 2017-2020 for lack of “evidence of insurability” despite collecting premiums from policyholders.

The company’s regulatory troubles continued in 2024 when Prudential agreed to pay $35 million to settle securities fraud allegations in the case City of Warren Police and Fire Retirement System v. Prudential. This settlement involved claims that the company made material misstatements and omissions regarding its Individual Life business reserves and mortality expectations during the period of June 5 – August 2, 2019.

While these regulatory actions involved different business lines than IUL policies, they demonstrate a pattern of regulatory scrutiny that extends beyond individual agent misconduct to company-wide practices. The regulatory history provides important context for understanding the company’s compliance challenges across its various insurance products.

Signs You May Have a Prudential IUL Fraud Case

Misleading Policy Illustrations and Projections

Policy illustrations serve as the primary sales tool for IUL policies, making their accuracy important for informed decision-making. Fraudulent illustrations often contain unrealistic return assumptions that fail to reflect the true performance potential of the policy given its fees, charges, and crediting methodology.

Many problematic illustrations fail to show worst-case scenarios or stress-test the policy under adverse market conditions. While regulations require certain disclosures according to NAIC guidelines, agents may minimize the significance of these scenarios or fail to adequately explain their implications for policy performance.

The omission of fees and charges in projections represents another red flag. Comprehensive illustrations should clearly show how administrative fees, cost of insurance charges, and other expenses will impact policy values over time. When these costs are buried in fine print or inadequately explained, policyholders cannot understand the true cost of their coverage.

Back-tested performance data misrepresentation occurs when agents show historical index performance without adequately explaining that the IUL policy would not have achieved the same returns due to caps, spreads, and fees. This practice can create unrealistic expectations about future policy performance and may constitute investment fraud.

Unsuitable Sales to Elderly or Vulnerable Clients

IUL policies require careful suitability analysis, particularly when sold to elderly clients or those with limited financial resources. Sales to clients over age 65 without proper analysis of their financial needs, risk tolerance, and investment timeline may constitute unsuitable recommendations.

Recommendations inconsistent with stated financial goals represent another warning sign. If you expressed conservative investment preferences or immediate income needs, but agents sold you a complex IUL policy with long-term surrender charges, the recommendation may have been unsuitable and could constitute broker misconduct.

High-pressure sales tactics and environments that discourage careful consideration of the purchase decision can indicate problematic sales practices. Legitimate insurance sales should involve thorough discussion of alternatives and adequate time for decision-making, as required by FINRA regulations.

Failure to consider your risk tolerance and financial sophistication represents a fundamental breach of the agent’s duty. IUL policies involve market risk and complex features that may not be appropriate for all investors, regardless of their financial resources.

Failure to Disclose Risks and Fees

Hidden surrender charges and penalties represent one of the most common disclosure failures in IUL sales. These charges can be substantial, particularly in the early years of the policy, and can significantly impact the policy’s value if you need to access your money.

Undisclosed cost of insurance increases can dramatically affect policy performance over time. Many IUL policies allow the insurance company to increase these charges, potentially causing the policy to lapse if additional premiums are not paid. This practice has been the subject of class action litigation against multiple insurers.

Failure to explain policy lapse risks represents a critical disclosure failure. IUL policies can lapse if insufficient funds are available to pay monthly charges, potentially resulting in the loss of all premiums paid and any accumulated cash value.

The omission of loan default consequences can leave policyholders unprepared for the tax implications and policy impacts of borrowing against their coverage. Policy loans reduce the death benefit and can cause the policy to lapse if not properly managed.

“Tax-Free Retirement” Misrepresentations

False comparisons to Roth IRAs and 401(k) plans represent a common form of misrepresentation in IUL sales. While both products offer tax advantages, they operate very differently and have distinct limitations and benefits that agents must explain according to IRS regulations.

Failure to explain Modified Endowment Contract (MEC) rules and their tax consequences can leave policyholders facing unexpected tax liabilities. IUL policies that become MECs lose many of their tax advantages and may subject withdrawals to penalties.

Overstated tax benefits and supposed loopholes often feature in deceptive IUL sales presentations. Agents may suggest that IUL policies offer tax advantages that are not available through other investment vehicles, without explaining the limitations and risks involved.

Ignoring IRS scrutiny and compliance requirements represents another form of misrepresentation. The tax benefits of IUL policies depend on compliance with complex regulations, and changes in tax law or IRS interpretation could affect these benefits.

Legal Grounds for Prudential IUL Lawsuits

Breach of Fiduciary Duty Claims

Insurance agents and financial advisors owe fiduciary duties to their clients, requiring them to act in the client’s interests rather than their own. When agents prioritize their commission income over client welfare, they breach this fundamental duty.

Inadequate due diligence and suitability analysis can support breach of fiduciary duty claims. Agents must thoroughly understand their clients’ financial situations, investment objectives, and risk tolerance before making recommendations.

Conflicts of interest that are not properly disclosed can also give rise to fiduciary duty claims. If agents receive higher commissions for selling IUL policies compared to other products, they must disclose this conflict. Additionally, they must work to make recommendations that are still in the client’s interests.

The failure to monitor and provide ongoing advice regarding IUL policies may also constitute a breach of fiduciary duty, particularly when agents maintain ongoing relationships with clients and hold themselves out as providing comprehensive financial advice.

Securities Fraud and Misrepresentation

IUL policies may be considered securities under federal and state law, subjecting their sale to securities fraud regulations. Material misstatements about policy performance, fees, or risks can support securities fraud claims under SEC regulations.

The omission of material facts about risks represents another basis for securities fraud claims. Agents must disclose all material information that would affect a reasonable investor’s decision to purchase the policy.

Fraudulent sales practices and schemes, particularly when they involve systematic deception across multiple sales, can support claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act, which provides for enhanced damages. Recent RICO litigation has challenged IUL proprietary indices.

Pattern and practice evidence of systematic fraud can strengthen individual claims by demonstrating that the misconduct was not isolated but part of broader deceptive practices.

Insurance Agent Negligence

Professional negligence claims can arise when insurance agents fail to meet the standard of care expected in their profession. This includes the failure to properly explain policy terms, risks, and alternatives, which may constitute broker negligence.

Inadequate training and supervision by insurance companies can support negligence claims against both the agent and the company. Insurance companies have a duty to work toward proper training and supervision of their agents.

Professional malpractice in recommendations occurs when agents fail to conduct proper suitability analysis or recommend products that are clearly inappropriate for the client’s situation. This can result in significant financial losses for clients.

Breach of industry standards and practices can be established through testimony regarding the proper procedures for IUL sales and the standards expected of insurance professionals.

FINRA Violations and Regulatory Breaches

When insurance agents are also registered representatives, they must comply with Financial Industry Regulatory Authority (FINRA) rules. Unsuitable investment recommendations can violate these rules and support legal claims.

Failure to supervise registered representatives represents a violation of FINRA rules that can support claims against both the individual agent and the supervising firm.

Violation of know-your-customer rules occurs when agents fail to obtain and analyze adequate information about their clients before making recommendations. These violations are subject to FINRA enforcement.

Improper sales practices and procedures, including the use of misleading sales materials or high-pressure tactics, can violate FINRA rules and support legal claims.

How RP Legal LLC Handles Prudential IUL Cases

Our Track Record with IUL Litigation

RP Legal LLC has established itself as a recognized firm in IUL fraud litigation, with attorney Robert Rikard recovering over $100 million for clients harmed by deceptive insurance sales practices. Our recent $1.5 million verdict against Pacific Life Insurance Company in May 2024 demonstrates our ability to successfully litigate these complex cases to trial.

Robert Rikard holds an AV® Preeminent rating from Martindale-Hubbell, the highest available rating reflecting peer assessments of legal knowledge and analytical capability. Our experience includes participation on multidistrict litigation (MDL) steering committees and leadership roles in class action lawsuits involving IUL fraud.

Nearly a decade of experience in IUL fraud litigation has given us deep knowledge of the insurance industry, regulatory environment, and legal theories that apply to these cases. We understand the complex financial products involved and the sophisticated defense strategies employed by major insurance companies.

Our recognition as authorities in IUL litigation means we regularly consult with other attorneys, speak at legal education seminars, and provide commentary to major media outlets on developments in this area of law.

Case Evaluation Process

Our comprehensive case evaluation begins with a detailed review of all policy documents, including the original application, policy illustrations, and any amendments or modifications. We analyze these documents to identify potential misrepresentations or omissions that may constitute investment fraud.

We conduct thorough analysis of the sales process, including review of sales presentations, marketing materials, and correspondence between the client and insurance agent. This analysis helps identify deceptive practices or unsuitable recommendations.

Professional witness consultation and testimony play important roles in our cases. We work with insurance industry professionals, actuaries, and financial professionals who can explain complex policy features and identify deviations from industry standards.

Our investigation includes examination of regulatory violations and disciplinary actions against the insurance company and individual agents. This information can provide important context and support for fraud claims.

No Upfront Fees – Contingency Representation

RP Legal LLC handles IUL fraud cases on a contingency fee basis, meaning clients pay no attorney fees unless we recover compensation on their behalf. This arrangement allows victims of fraud to pursue their claims without financial risk.

We provide free initial consultations to evaluate potential claims and explain legal options. These consultations are confidential and create no obligation for the potential client.

Our transparent fee structure helps clients understand all costs associated with their representation. We provide clear explanations of how contingency fees work and what expenses may be involved in litigation.

We handle cases nationwide and work with local counsel when necessary to provide proper representation regardless of where the policy was purchased or where the client resides.

Compensation Available in Prudential IUL Fraud Cases

Types of Damages Recoverable

Successful IUL fraud claims can result in various forms of compensation designed to make victims whole. Full premium refunds and restitution represent the most common form of recovery, returning all money paid into the policy.

Lost investment returns and opportunity costs compensate victims for the returns they would have earned if their money had been invested appropriately. This calculation requires analysis of alternative investments and market performance.

Surrender charges and penalty reimbursement can provide significant recovery, particularly for policies that were surrendered early due to poor performance or financial necessity. These charges can be substantial and may constitute excessive fees.

Punitive damages may be available in cases involving particularly egregious conduct, such as systematic fraud or deliberate concealment of material information. These damages are designed to punish wrongdoers and deter similar conduct.

Recent IUL Settlement Examples

Individual verdicts in IUL cases have ranged from hundreds of thousands to millions of dollars, depending on the amount of premiums paid, the extent of losses, and the egregiousness of the conduct involved.

Class action settlements have benefited thousands of policyholders in cases involving systematic deceptive practices. These settlements can provide compensation even when individual damages might not justify separate litigation.

Regulatory fines and penalties imposed on insurance companies demonstrate the seriousness of IUL-related violations and can support individual fraud claims by establishing patterns of problematic conduct.

Timeline for Resolution

Initial case evaluation typically takes one to two weeks, during which we review documents and assess the strength of potential claims. This evaluation helps determine whether litigation is warranted and what strategies might be most effective.

Discovery and investigation phases generally last six to twelve months, depending on the complexity of the case and the cooperation of defendants. This phase involves gathering additional evidence and taking depositions of key witnesses.

Settlement negotiations often occur throughout the litigation process but typically intensify after discovery is complete. Many cases resolve through settlement within three to six months of serious negotiations beginning.

Trial preparation and verdict can take twelve to eighteen months from the filing of the lawsuit, though many cases settle before trial. Our willingness to take cases to trial often encourages favorable settlement negotiations.

Taking Action Against Prudential IUL Fraud

Statute of Limitations Considerations

Statutes of limitations for IUL fraud claims vary by state and type of legal theory, typically ranging from two to six years from the discovery of the fraud. These time limits are strictly enforced, making prompt action important.

The discovery rule may extend filing deadlines in cases where the fraud was not immediately apparent. This rule allows the statute of limitations to begin running when the victim discovers or reasonably should have discovered the fraud.

Continuing violation doctrine may apply in cases involving ongoing fraudulent conduct, such as the continued collection of premiums on policies that were fraudulently sold. This doctrine can extend the time for filing claims.

The importance of prompt legal consultation cannot be overstated, as delay in seeking legal advice can result in the loss of valuable rights and remedies. Contact our experienced attorneys for immediate assistance.

Gathering Documentation for Your Case

Original policy documents and illustrations form the foundation of any IUL fraud case. These documents show what was promised during the sales process and how the policy was actually structured.

Sales presentations and marketing materials used by the agent can provide evidence of misrepresentations or deceptive practices. These materials often contain the most problematic statements and projections that may constitute investment fraud.

Correspondence with agents and the insurance company can document ongoing problems with the policy and the company’s responses to complaints or concerns.

Financial statements and loss documentation help establish the extent of damages and support claims for compensation. This includes records of premiums paid, policy values, and any surrender charges incurred.

Free Consultation Process

Our confidential case evaluation process begins with a detailed discussion of your IUL policy purchase and any problems you have experienced. We review your documentation and assess the strength of potential claims.

No obligation assessment means you can learn about your legal options without committing to representation. We provide honest evaluations of case strengths and weaknesses.

Clear explanation of legal options and strategies helps you understand the litigation process and what to expect if you decide to pursue claims. We explain the risks and benefits of different approaches.

Immediate action to preserve your rights may be necessary, particularly if statute of limitations deadlines are approaching. We can take steps to protect your interests while you consider your options. Give us a call: (803) 805-7546 or contact us online

Frequently Asked Questions

Can I sue Prudential for IUL fraud?

Yes, if you were sold a Prudential IUL policy through deceptive practices, misrepresentations, or unsuitable recommendations, you may have grounds for legal action. Our attorneys can evaluate your situation during a free consultation.

What evidence do I need for a Prudential IUL fraud lawsuit?

Key evidence includes your policy documents, illustrations shown during the sale, correspondence with agents, financial statements showing losses, and records of any policy problems or unexpected charges.

How long do I have to file a Prudential IUL fraud claim?

Statutes of limitations vary by state and claim type, typically ranging from 2-6 years from discovery of the fraud. Early consultation is important to preserve your rights and gather necessary evidence.

What compensation can I recover in a Prudential IUL fraud case?

Potential recovery includes premium refunds, lost investment returns, surrender charges, policy fees, and in cases of egregious conduct, punitive damages. Each case is different based on individual circumstances.

Do I need to pay attorney fees upfront for a Prudential IUL case?

No, RP Legal LLC handles IUL fraud cases on a contingency basis – you pay no attorney fees unless we recover compensation for you. Initial consultations are always free and confidential.

How is RP Legal LLC different from other law firms handling insurance cases?

We focus on IUL fraud litigation with nearly a decade of experience, over $100 million recovered for clients, and recognition as authorities in this complex area of law.

What makes a Prudential IUL sale fraudulent?

Fraudulent sales typically involve misrepresentations about policy performance, failure to disclose risks and fees, unsuitable recommendations, or deceptive marketing practices like promising “tax-free retirement income” without explaining limitations.

Can I join a class action lawsuit against Prudential for IUL fraud?

Class action opportunities depend on the circumstances and number of affected policyholders. Our attorneys can advise whether individual litigation or class action participation is more appropriate for your case.

Related Posts

Last Updated: 08-08-2025

Case Results Our Record Speaks For Itself
Recoveries for Victims of IUL and FIP Investment Fraud
$10,000,000

RP Legal LLC has recovered over tens of millions of dollars for victims in these cases.
Learn more

Jury Verdict for Failed IUL Retirement Strategy
$1,500,000

A jury awarded $1,526,156.54 for our client, ruling against Pacific Life Insurance Company.

Learn more

Featured on InsuranceNewsNet
LEADERSHIP

Robert Rikard, founding attorney of RP Legal LLC, was recently featured in a nationally recognized insurance publication.

Learn more

Any result the lawyer or law firm may have achieved on behalf of clients in other matters does not necessarily indicate similar results can be obtained for other clients.

Client Testimonials
~ Alex

Great attorneys that were able to help me with all my legal issues involving my LLC. I would 100% recommend this firm to anyone who needs legal assistance with their small business.

~ Charles

Solid litigators who have your best interest in mind!

~ Giovanni

Great attorneys! Professional and patient. I enjoyed working with them!

~ Christopher

If you want real lawyers that don’t mess around and waste your time then hire these guys. Robert Rikard and Peter Protopapas aggressive trial lawyers. The staff is friendly and helpful as well!!! 100% recommend!

~ Charles

Peter is the BEST!! I had the misfortune of needing an attorney, and through a chance encounter was pointed in his direction. Their attention to detail and knowledge of their profession is second to none! Don’t waste your time with these ambulance chasers you see all over the TV - if you need results look no further!!

TOP-RATED
LAWYER NEAR YOU
2110 N Beltline Blvd
Columbia, SC 29204

Phone: (803) 805-7546

FAX: 803-978-6112

View Directions
10 Shem Drive, Suite 200
Mt Pleasant, SC 29464

Phone: (803) 805-7546

FAX: 803-978-6112

View Directions
REQUEST A FREE CONSULTATION We’re Here To Help

"*" indicates required fields