Indexed Universal Life (IUL) insurance policies have become the subject of significant litigation in 2025. Multiple lawsuits allege that insurance carriers and agents misrepresented these complex products to consumers. The litigation reflects growing concerns about deceptive marketing practices and unsuitable sales recommendations. If you’re facing issues with your IUL policy, understanding the landscape of IUL lawsuits can help you determine your legal options.
IUL policies promise returns tied to stock market indices without direct market exposure. However, many policyholders report that actual returns fall far short of sales projections. Regulatory agencies have received thousands of complaints about misleading illustrations and hidden fees. The volume of IUL litigation has increased dramatically in recent years, with attorneys across the country now focusing on representing IUL policyholders in cases involving multiple carriers, agents, and financial institutions.
If you believe you have been harmed by an IUL policy, consult with an attorney to understand your legal options and potential recovery. Many policyholders have successfully pursued IUL litigation claims and recovered substantial damages.
What is an Indexed Universal Life (IUL) policy?
An Indexed Universal Life policy is a type of permanent life insurance. The policy’s cash value grows based on the performance of a stock market index, typically the S&P 500. However, the policy includes a floor (usually 0%) and a cap on returns, which significantly limits the upside potential that agents often promise to clients.
IUL policies offer flexibility in premium payments and death benefits. Policyholders can adjust premiums and coverage amounts within policy limits. The policy’s cash value can be accessed through policy loans or withdrawals. However, agents often market IUL policies as a way to achieve stock market returns without market risk—a claim that oversimplifies the product’s complexity.
IUL policies include numerous fees, caps, and restrictions that limit actual returns. Understanding these limitations is critical before purchasing an IUL policy. Many policyholders discover too late that the returns they were promised during the sales process do not materialize, leading to IUL misrepresentation claims and litigation.
Common IUL Misrepresentations and Sales Tactics
Agents frequently misrepresent IUL policies to consumers. Understanding these common misrepresentations can help you identify whether you may have a claim. Common misrepresentations include:
Guaranteed returns: Agents may claim the policy guarantees specific returns. In reality, IUL returns depend on index performance and are subject to caps and fees. This misrepresentation is one of the most common allegations in IUL litigation cases.
Tax-free retirement income: Agents may suggest policyholders can access funds tax-free through policy loans. While policy loans are generally not taxable, this strategy has significant limitations and risks that agents frequently fail to disclose.
“Be Your Own Banker” concept: Some agents promote the idea that policyholders can borrow against their policy to fund personal expenses. This strategy can deplete the policy’s cash value and lead to policy lapse, a risk that many policyholders were not adequately warned about.
Minimal fees: Agents may downplay the fees associated with IUL policies. Internal fees can reach upwards of 8% on premiums and cash values, significantly eroding returns over time.
Suitable for all clients: Agents may recommend IUL policies to unsuitable clients, including elderly individuals and those with limited income. This unsuitable sales practice is a major focus of IUL litigation.
Premium financing: Agents may recommend borrowing money to pay premiums, increasing leverage and risk. Premium-financed IUL arrangements have resulted in significant losses for many policyholders and are the subject of numerous lawsuits.
IRA rollovers: Agents may recommend rolling over retirement savings into IUL policies, triggering tax consequences and unsuitable recommendations that violate fiduciary duties.
2025 IUL Litigation Cases and Developments
The IUL litigation landscape has expanded significantly in 2025. Multiple high-profile cases demonstrate systematic misconduct across carriers and sales organizations. Understanding these major cases can help you assess whether your situation may be similar.
Shelstad v. Pacific Life – This case challenges Pacific Life’s IUL marketing practices. The lawsuit alleges incredibly complex policy structures designed to mislead consumers about returns and fees. Pacific Life has faced multiple IUL lawsuits related to misleading illustrations and unsuitable sales practices.
RICO Lawsuit Challenging IUL Proprietary Indices – Filed in January 2025 in U.S. District Court for the District of Vermont, this case alleges racketeering by life insurance companies. The lawsuit challenges proprietary interest crediting strategies used in multiple IUL policies. Allegations include fraudulent historical performance claims made through marketing agencies and agents. The case seeks class certification and remains ongoing, representing a significant development in IUL litigation strategy.
Pacific Life IUL Illustration Lawsuit Settlement – In September 2025, Pacific Life settled a lawsuit in Washington state over misleading IUL illustrations. The settlement raises important questions about sales processes and consumer protection in the industry. This settlement demonstrates that carriers are being held accountable for IUL misrepresentation.
Gottlieb Premium-Financed IUL Lawsuit – In January 2025, former advisor Joshua L. Gottlieb faced a lawsuit for mishandling a premium-financed IUL insurance program. Gottlieb was barred by FINRA in 2017. The case alleges he caused significant financial harm through improper management of the premium-financed arrangement. This case exemplifies the risks of premium financing in IUL policies.
Symetra Indexed Universal Life Insurance Lawsuit – Symetra faces active litigation over IUL policy misrepresentations and unsuitable sales practices. The company is among multiple carriers facing similar allegations.
Amended Lawsuit Over National Life IUL Illustrations – State claims were added to an amended lawsuit challenging National Life Group’s IUL illustrations. The case alleges misleading performance projections and inadequate fee disclosure. National Life is one of several major carriers facing IUL litigation.
Resolved Indexed Universal Life Hidden Costs Lawsuit – This case addressed hidden costs in IUL policies, resulting in recovery for affected policyholders. The case demonstrates that courts recognize the harm caused by undisclosed fees in IUL products.
Vermont Federal Court Dismissal – September 2025
In September 2025, a Vermont judge dismissed two National Life companies from a lawsuit. The case involved an indexed universal life policy that returned 0% to the policyholder. The plaintiff, Sanya Virani, filed the lawsuit in the U.S. District Court for the District of Vermont.
The policy in question covered the period from September 22, 2023 to September 21, 2024. During this period, the policy earned 0% interest despite market index gains. The case name is Virani v. NLV Financial Corporation et al., filed October 31, 2024. The case continues against remaining defendants. This case illustrates how IUL policies can fail to deliver promised returns.
RICO Litigation – January 2025
January 2025 saw the filing of RICO litigation in the U.S. District Court for the District of Vermont. The case challenges proprietary interest crediting strategies available to policyholders. Multiple indexed universal life policies from various carriers are involved in this litigation.
RICO allegations suggest a pattern of racketeering activity. The litigation targets systematic misconduct across multiple carriers and agents. This represents a significant development in IUL litigation strategy, as RICO claims can result in treble damages for plaintiffs. The case demonstrates that courts are willing to consider broader conspiracy allegations in IUL cases.
RP Legal LLC Launches National Litigation Platform – August 2025
In August 2025, RP Legal LLC launched a national litigation platform to represent victims of IUL schemes. The firm, led by attorneys Robert Rikard and Peter Protopapas, targets misleading sales including tax-free retirement promises and premium financing schemes.
The firm accepts clients for free reviews. RP Legal LLC has recovered over $100 million in similar cases. The firm has handled over 400 IUL cases and continues to expand its national practice. If you believe you have an IUL claim, contacting experienced IUL litigation attorneys can help you understand your options.
Law Firm Rebrands to Focus on IUL Litigation – September 2025
In September 2025, Robert Rikard and Peter Protopapas rebranded their firm to focus exclusively on IUL litigation. The attorneys noted that IUL abuses including hidden fees and misleading sales are worsening. The firm has handled over 400 cases and recovered tens of millions for victims. This focus on IUL litigation reflects the growing volume of cases in this area.
Ameritas IUL Fraud Lawsuit Claims – May 2025
Multiple claims against Ameritas Life Insurance allege declining cash values despite premiums paid. The claims tie the decline to deceptive marketing and misleading illustrations. Illustrations allegedly showed 7-8% returns while ignoring volatility and market risks. Ameritas is among the major carriers facing IUL litigation.
Plaintiffs allege Ameritas failed to disclose fees adequately. The cases are part of national recovery efforts against carriers for IUL misconduct. If you own an Ameritas IUL policy, reviewing your illustrations and comparing them to actual performance may reveal misrepresentation.
Indexed Universal Life Insurance Fraud Claims – June 2025
Sales materials for IUL policies have been accused of including misrepresentations of performance and anticipated returns. These misrepresentations contribute to broader fraud allegations against agents and insurers. Many policyholders have discovered that their policies perform far below the projections shown in sales materials.
Life Insurance Fraud Lawsuits Involving IULs – September 2025
An attorney update highlights that many life insurance fraud lawsuits in 2025 involve IULs. Cases focus on deceptive practices including unrealistic projections and hidden costs. The volume of IUL-related litigation continues to grow as more policyholders discover they were misled during the sales process.
Complaints Against Universal Life Insurance – May 2025
Sales of IUL policies are criticized for false promises and deceptive marketing. Agents emphasize hypothetical returns while downplaying risks like policy lapses and fees. Regulatory agencies continue to receive complaints about these practices. Understanding these common complaints can help you identify whether your situation may warrant legal action.
Ongoing Litigation Against Major Carriers
Multiple insurance carriers face active IUL litigation. Carriers include Allianz, Minnesota Life, National Life Group, Transamerica, Pacific Life, Prudential, Family First, Protective, Columbus Life, Ameritas, and MetLife. Each carrier has faced multiple lawsuits alleging misrepresentation and unsuitable sales practices.
These cases involve various claims including misrepresentation, breach of contract, and breach of fiduciary duty. Many cases involve class action allegations. The litigation spans multiple federal and state courts. If your policy is with one of these carriers, you may have legal remedies available.
Premium-Financed IUL Litigation
What is Premium Financing?
Premium financing involves borrowing money to pay life insurance premiums. The arrangement typically uses the policy’s cash value as collateral. Lenders advance funds to pay premiums, and the policyholder repays the loan. Premium financing is a complex financial arrangement that requires careful analysis before implementation.
Premium financing adds leverage to the IUL strategy. It allows policyholders to purchase larger policies with less out-of-pocket cost. However, it also increases risk significantly. Many policyholders were not adequately informed about the risks of premium financing before entering into these arrangements.
Premium Financing Risks
Premium financing creates substantial risks for policyholders. If the policy underperforms, the cash value may not cover loan obligations. The policyholder must then pay the shortfall from personal funds. This scenario has occurred for many policyholders who relied on optimistic return projections.
Market downturns can trigger loan defaults. When markets decline, policy values drop. This may force the lender to demand additional collateral or accelerate loan repayment. Understanding these risks is essential before pursuing premium-financed IUL arrangements.
Premium Financing Litigation
Many policyholders have filed lawsuits over premium financing arrangements. Cases involve claims that agents misrepresented the risks. Plaintiffs allege agents failed to disclose the possibility of policy failure. Premium-financed IUL litigation is one of the fastest-growing areas of IUL claims.
Litigation also addresses unsuitable recommendations. Agents may have recommended premium financing to unsuitable clients. Elderly clients or those with limited income may have been particularly vulnerable to these unsuitable recommendations.
The Gottlieb case demonstrates the risks of premium-financed IUL arrangements. Former advisor Joshua L. Gottlieb faced significant liability for mishandling a premium-financed IUL program. The case shows how premium financing can result in substantial losses for policyholders. If you have a premium-financed IUL policy, consulting with an attorney about your situation is advisable.
IRA and 401(k) Rollover to IUL Cases
Some agents recommend rolling over IRA funds into IUL policies. This strategy involves liquidating retirement accounts and using the proceeds to purchase life insurance. The arrangement raises significant suitability concerns that have led to numerous lawsuits.
IRA rollovers to IUL policies often violate fiduciary duties. Agents may fail to consider the client’s age, income, and retirement needs. The strategy may be unsuitable for many clients, particularly those nearing retirement. IRA rollover IUL litigation represents a significant portion of overall IUL claims.
Tax Consequences of IRA Rollovers
IRA rollovers to IUL policies can trigger substantial tax consequences. If the rollover is not structured properly, the IRS may treat it as a taxable distribution. This can result in significant income tax liability that policyholders were not anticipating.
Additionally, clients under age 59½ may face early withdrawal penalties. These penalties add 10% to the tax liability. Agents often fail to adequately disclose these consequences. Understanding the tax implications of IRA rollovers is critical before proceeding with such arrangements.
Litigation Over Unsuitable Rollovers
Policyholders have filed numerous lawsuits over unsuitable IRA rollovers. Cases allege breach of fiduciary duty and misrepresentation. Plaintiffs claim agents failed to consider their retirement needs and circumstances. Many cases involve elderly clients who relied on retirement savings.
These clients may have had limited ability to recover from losses. Courts have found agents liable for substantial damages in these cases. If you rolled over an IRA into an IUL policy, reviewing the circumstances of that transaction with an attorney may reveal potential claims.
MLM-Based IUL Sales Litigation
Some IUL sales organizations operate using multi-level marketing (MLM) structures. These organizations include World Financial Group, PHP Agency, Five Rings Financial, and others. Agents earn commissions not only on their own sales but also on sales by agents they recruit.
MLM structures create incentives for high-pressure sales tactics. Agents may prioritize sales volume over client suitability. This environment increases the risk of misrepresentation and unsuitable recommendations. MLM-based IUL sales have been the subject of significant regulatory scrutiny and litigation.
High-Pressure Sales in MLM Environments
MLM-based IUL sales often involve aggressive sales tactics. Agents may use misleading presentations and exaggerated return projections. Clients may feel pressured to purchase policies they do not fully understand. The high-pressure environment of MLM sales creates conditions ripe for misrepresentation.
Additionally, MLM structures may encourage agents to target friends and family members. These relationships can be exploited to pressure people into unsuitable purchases. If you purchased an IUL policy from an MLM-based sales organization, you may have grounds for litigation.
MLM IUL Litigation
Policyholders have filed lawsuits against MLM-based IUL sales organizations. Cases allege fraud, misrepresentation, and breach of fiduciary duty. Many cases involve class action allegations. MLM IUL litigation is growing as more policyholders recognize the unsuitable nature of their purchases.
Litigation targets both the sales organizations and individual agents. Cases seek recovery for losses resulting from unsuitable recommendations and misrepresentation. If you were sold an IUL policy through an MLM organization, understanding your legal options is important.
Insurance Carriers Facing IUL Litigation
Multiple major insurance carriers face active IUL litigation. These carriers include:
- Allianz
- Minnesota Life
- National Life Group
- Transamerica
- Pacific Life
- Prudential
- Family First
- Protective
- Columbus Life
- Ameritas
- MetLife
Each carrier has faced multiple lawsuits alleging misrepresentation and unsuitable sales practices. If your policy is issued by one of these carriers, you may have legal remedies available.
Potential Liability in IUL Cases
Insurance carriers can face liability for agent misconduct. Carriers have a duty to supervise agents and ensure compliance with regulations. Failure to supervise can result in carrier liability. Many carriers have been found liable for failing to adequately supervise their agents’ sales practices.
Additionally, carriers may face direct liability for their own conduct. Carriers may have created misleading marketing materials or failed to disclose material information. These actions can expose carriers to substantial liability. Understanding carrier liability is important when evaluating your potential IUL claim.
Financial Institutions and IUL Sales
Banks and Financial Advisors Selling IUL Policies
Many banks and financial advisory firms sell IUL policies. These institutions include Global Atlantic Accordia, Mutual of Omaha, Symetra, Lifepro, John Hancock, Equitable AXA, and others. Financial institutions have heightened fiduciary duties when selling insurance products.
Financial institutions must ensure recommendations are suitable for clients. Many institutions have failed to meet these obligations. If you purchased an IUL policy from a financial institution, the institution may have breached its fiduciary duty to you.
Broker-Dealer Liability
Broker-dealers that sell IUL policies face potential liability. Broker-dealers must ensure agents comply with suitability rules. They must also supervise sales practices and marketing materials. Many broker-dealers have failed to adequately supervise IUL sales.
This failure has exposed them to substantial liability. If your IUL policy was sold through a broker-dealer, the broker-dealer may be liable for unsuitable recommendations made by its agents.
Financial Institution Litigation
Policyholders have filed numerous lawsuits against financial institutions. Cases allege breach of fiduciary duty, misrepresentation, and unsuitable recommendations. Many cases involve class action allegations. Financial institution IUL litigation is a growing area of practice.
Litigation targets both the institutions and individual advisors. Cases seek recovery for losses resulting from unsuitable recommendations. If you purchased an IUL policy from a financial institution, consulting with an attorney about your situation may reveal potential claims.
What to Do If You Have an IUL Policy
Review Your Policy Documents
If you own an IUL policy, review your policy documents carefully. Look for information about fees, caps, and crediting methods. Understand how your policy’s cash value is calculated. Comparing your policy documents to the original sales materials can reveal discrepancies.
Compare the policy’s actual performance to the original illustrations. If performance significantly lags projections, this may indicate misrepresentation. Many policyholders discover that their policies are underperforming when they conduct this comparison.
Understand Your Policy’s Performance
Request an in-force illustration from your insurance carrier. This illustration shows how your policy is expected to perform going forward. Compare this to the original sales illustration. Significant differences between the original and current illustrations may indicate problems.
If the policy is underperforming, this may indicate problems. Underperformance could result from high fees, unsuitable recommendations, or misrepresentation. Understanding your policy’s performance is the first step in determining whether you have a potential claim.
Consider Your Options
If you believe your policy was sold inappropriately, you have several options. You can attempt to resolve the issue with the insurance carrier. You can file a complaint with your state insurance commissioner. You may also have legal remedies available.
Consulting with an attorney can help you understand your options and potential recovery. Many IUL litigation attorneys work on a contingency fee basis, meaning you pay nothing unless your case is successful. Understanding your legal options is critical if you believe you have been harmed by an IUL policy.
Schedule a free consultation online or give us a call: (803) 805-7546
SOURCES AND REFERENCES
The following sources were used to compile this comprehensive guide to 2025 IUL litigation:
Major IUL Lawsuits
- Shelstad v. Pacific Life
- RICO Lawsuit Challenging IUL Proprietary Indices
- National Life Indexed Universal Life Policy Lawsuit Dismissal
- Pacific Life IUL Illustration Lawsuit Settlement
- Gottlieb Premium-Financed Indexed Universal Life Lawsuit
- Symetra Indexed Universal Life Insurance Lawsuit
- Amended Lawsuit Over National Life IUL Illustrations
2025 IUL News and Developments
- Law Firm Launches National Practice Targeting IUL Lawsuits (September 18, 2025)
- Vermont Judge Dismisses Two National Life Companies from IUL Lawsuit (September 18, 2025)
- RICO Suit Challenging IUL Proprietary Indices (January 24, 2025)
- Indexed Universal Life Insurance (IUL) Fraud Claims (June 3, 2025)
- RP Legal LLC Launches National Litigation Platform for IUL Victims (August 6, 2025)
- Complaints Against Universal Life Insurance, Including IUL (May 7, 2025)
- Pacific Life Settles IUL Illustration Lawsuit (September 23, 2025)
Government & Regulatory Authority
- IRS Guidance on Life Insurance Policy Loans: https://www.irs.gov/publications/p550
- FINRA Advisor Disciplinary Records: https://brokercheck.finra.org/
- SEC Investor Protection Bureau: https://www.sec.gov/investor