You may have purchased an indexed universal life insurance product from Pacific Life based on the representations that sales representatives made to you. They may have provided you with glossy illustrations that demonstrated scenarios in which you would make very large returns on your investment.
However, you may have been shocked when you were told that you needed to pay higher premiums because your investments suffered losses.
This is the exact scenario in which numerous people have found themselves after acting on their representative’s sales pitch. As a result, Pacific Life is facing numerous lawsuits about its sales practices with IULs, claiming that its agents misrepresented the product to customers, who have now suffered losses. If you have lost money on a Pacific Life indexed universal life insurance policy, you may be able to file a lawsuit. Contact the investment fraud attorneys at Rikard & Protopapas to discuss your case.
Pacific Life Sells an Extremely Risky Product Through Very Optimistic Illustrations
The indexed universal life insurance lawsuits against Pacific Life have involved a product called the PDX indexed universal life insurance policy.
Many IULs have complex financial features. The PDX policy seems to take things to an entirely new level. The specific problem with the policy is the “X” piece of it. The “X” stands for Xcelerator. The insurance policy acts like leveraged securities. The customer can do extremely well when the market performs well. However, they will take a much larger loss when the market performs poorly. The volatility comes from a “performance factor” that many purchasers claim was not disclosed to them when they bought the policies.
In general, leveraged securities are not suitable for all investors. They are only suitable for those who have the highest risk tolerance.
However, Pacific Life has allegedly sold its PDX products to many customers, including older ones who may not be in the position to take the risk. Their needs are usually for more conservative investment products.
Companies Like Pacific Life Used Illustrations to Stay Ahead of Changing Regulations
There are no two ways around the fact that an IUL is a complicated financial instrument. Pacific Life has tried to explain this product to potential customers through the use of illustrations.
Numerous plaintiffs have alleged that these illustrations regarding the PDX IUL are misleading. Pacific Life is alleged to have depicted overly rosy scenarios in these illustrations that overstate the potential financial performance.
In addition, customers have claimed that the performance factor is a way around a standard that was adopted to limit the representations that insurance companies could make in their illustrations. Standard AG-49 set a benchmark rate based on annual returns on S&P 500, and prohibited insurance companies from using higher rates to increase illustrated rates of return. Multipliers and performance factors are a way for insurance companies to illustrate higher rates. Insurance companies are always trying to stay one step ahead of rules that are aimed at preventing them from using these multipliers to show outsized returns.
When you are buying any type of life insurance policy, you are placing an inherent amount of trust in the company selling you the product. You are paying a large amount of money, and you expect promises to be kept. You are often shocked to find out how much money the company has made off you. Everyone seems to be getting paid, from the agent who sells you the policy, who earns large commissions, to the company that reaps high fees.
Pacific Life Has Been Sued in Washington State
Pacific Life has been named as a defendant in numerous lawsuits claiming that the company used deceptive sales practices in marketing its PDX product. In 2020, there was a class action lawsuit filed in California that made numerous allegations
In Washington state, a couple recently filed a lawsuit against Pacific Life. They made roughly $500,000 in premium payments and had another $200,000 in investment gains. They believed that they could reduce their premium payments, but were later told that they would lose their coverage. They eventually received a check back for only just over $200,000 when they surrendered their policy.
The plaintiffs sued Pacific Life for negligent misrepresentation and claimed that the PDX policy was the riskiest possible product. Pacific Life claims that their behavior complied with the exact language of the policy. What is troubling is that following the language of the policy caused the plaintiffs to suffer such a large loss on a product that was supposed to provide them with life insurance coverage.
Rikard & Protopapas have brought lawsuits against Pacific Life and its agents in South Carolina and Idaho related to these IUL products.
Pacific Life Has Tried to Distance Itself from Representatives Who Sold its Product
In another South Carolina case, a financial advisor sold a couple a Pacific Life PDX product based on numerous misrepresentations. The advisor was paid a hefty commission, while the couple had high “policy charges” deducted from the premiums that they paid. Pacific Life claimed that the illustrations that the advisor showed the customers were a violation of their own internal policy.
Pacific Life has tried to continuously distance itself from the advisor who sold the policy to evade all legal responsibility. The company that is supposed to back up its own product and provide a product that is intended to protect you disassociates itself from the sales practices of representatives who sell their product. Pacific Life asked a South Carolina judge to dismiss that case, and Rikard & Protopapas attorneys were able to successfully challenge that. The court recently ruled in favor of our clients, and refused to dismiss the lawsuit.
In these cases, you need a tough lawyer who can hold a large company like Pacific Life responsible for their behavior and the fact that their agents deceptively market a very risky IUL product and allow it to be sold to investors for whom it may not be suitable.
Learn More About Filing a Pacific Life IUL Lawsuit
If this sounds like your situation, where you have been shocked at how your investment in a Pacific Life IUL product turned out, versus how it was represented to you, the attorneys at Rikard & Protopapas can help. We have successfully taken on large companies like Pacific Life. If you have been done wrong by an investment company, you can reach out to us through our website, or you can call us at (803)-805-7546 to schedule a free initial consultation.