Did Your “IRA Rescue” Turn Into a Financial Trap?
If you were told that your IRA could be “rescued,” “rebooted,” or “repositioned” using an Indexed Universal Life (IUL) policy, you’re not alone. Across the country, retirees and professionals are being targeted with sales pitches promising tax-free income, market upside with no downside, and the complete elimination of RMDs and income tax obligations.
What they’re sold, however, is often a ticking time bomb.
With almost a decade of focused experience in IUL litigation, Robert Rikard and the team at RP Legal LLC have helped clients nationwide recover from these failed strategies. The firm secured a major trial victory against one of the largest IUL product providers in the country and continues to recover losses for retirees, professionals, and business owners who were misled.
The IRA “Reboot” Pitch: What You Were Likely Told
Insurance agents and financial advisors have rebranded Indexed Universal Life under the disguise of legitimate IRA and retirement planning. These are the core promises made to clients:
- “We’ll convert your taxable IRA into a tax-free income stream.”
- “You’ll never pay taxes on this money again.”
- “The policy will pay for itself after a few years.”
- “You’ll receive lifetime income without touching your principal.”
- “This strategy is used by the wealthy and elite.”
The concept usually involves using IRA distributions to fund an IUL policy over a short window of three to five years. After that, the client is told they’ll never need to contribute again. Often, a premium financing loan is added to “enhance” the plan. The illustrations show beautiful returns, tax-free withdrawals, and no risk of loss.
But the truth is far different.
What Really Happens in IRA-to-IUL Plans
You Start Paying, Then You Can’t Stop
Many of these policies require ongoing funding far beyond the original three to five years. If the market underperforms, cap rates drop, or costs increase (all common), the policy becomes underfunded. Clients are forced to pay more or face lapse.
“Tax-Free” Income Comes From Policy Loans
All income projections in these strategies are based on borrowing against your own life insurance policy. These loans accrue interest and can spiral out of control, especially when policy performance lags. Over time, the loan balance may exceed the policy’s cash value.
Fees, Expenses, and Cost of Insurance Erode the Policy
Clients are almost never told that cost of insurance, administrative fees, and asset-based charges are quietly deducted every single month before any index gains are credited. Over time, this crushes performance.
Illustrations Are Based on Unreliable Assumptions
The “income” shown on your illustration depends on:
- High, sustained cap rates
- Consistent index performance
- No policy loans defaulting
- No adverse tax changes
None of which are guaranteed or even likely.
Was It a Scam? Or Just Misrepresented?
Ask yourself:
- Were you told that after only a few years you would never have to pay a premium again?
- Were you promised guaranteed income or zero risk of loss?
- Did the plan include a bank loan to help “supercharge” your returns?
- Did your agent emphasize tax-free benefits, but never discuss what happens if the policy underperforms?
If you answered yes to any of these, your IRA “rescue” may have been a sophisticated misrepresentation, and you may have legal recourse.
Why RP Legal LLC is the Authority in IUL Recovery
Robert Rikard and RP Legal LLC are the nation’s most experienced litigation team focused exclusively on recovering losses from Indexed Universal Life sales gone wrong. Their track record includes:
- A trial win against one of the country’s largest IUL insurers
- Over 400 clients represented in IUL and premium finance cases
- Recovery of tens of millions of dollars in misrepresented insurance schemes
- Litigation and settlements in over a dozen states against agents, promoters, and insurance companies
While other firms may occasionally encounter IUL cases, RP Legal LLC has built one of the only national litigation platforms focused entirely on Indexed Universal Life (IUL) recovery. The firm brings unmatched knowledge of how these policies are structured, how they’re sold under misleading retirement narratives, and how they collapse under the weight of hidden fees, inflated assumptions, and flawed loan designs. With hundreds of active IUL cases, courtroom victories, and a proven ability to recover client losses, RP Legal LLC has become the go-to litigation firm for victims of IUL misrepresentation.
What You Can Do Today
If you were sold an “IRA Rescue” using an IUL policy, you don’t have to wait for your policy to collapse to take action.
Request a Policy Review
We will assess your IUL contract, funding schedule, and illustration assumptions to determine if you were misled.
Get a Litigation Analysis
Our team will evaluate whether your case meets the legal thresholds for a claim against the insurance company, advisor, or financier.
Understand Your Exit Options
In some cases, we can seek rescission, damages, or structured settlements that return your net investment.
Don’t Let Misrepresentation Destroy Your Retirement
IULs are not retirement accounts. They are complex life insurance policies that rely on opaque mechanics and costly assumptions. If your retirement plan now depends on one, and you were never clearly informed about the risks, you may have a case.
RP Legal LLC is here to help you recover before your future is lost.
Call (803) 805-7546 or complete the form on this page to speak with the legal team leading the fight against IUL misrepresentation.