Greenville IUL Lawsuit Lawyer
Has a financial advisor or investment broker induced you to invest in an IUL that doesn’t match the promises made by your advisor or broker? When a financial firm negligently or willfully advised you to purchase an unsuitable IUL in Greenville, you need dedicated legal counsel to pursue compensation and accountability.
RP Legal LLC has over 100 years of combined legal experience, having represented hundreds of clients who have suffered financial losses due to broker/advisor misconduct or negligence. Our team has a 97 percent success rate, having recovered millions of dollars in settlements and verdicts. Contact us today for an initial case evaluation with a Greenville IUL lawsuit attorney to learn how we can help.
What Are IULs?
Indexed universal life insurance policies provide permanent insurance that includes two components: a cash value element and lifetime insurance (so long as the policyholder keeps up with premium payments).
IULs differ from other universal life insurance policies as the funds in the policy’s cash value account earn interest by tracking a stock market index chosen by the insurance company. Some IULs also have fixed-rate accounts, with policyholders able to determine how much money to contribute to the fixed and index accounts. Many IULs offer an interest rate guarantee, which can limit a policyholder’s losses. However, fees and other expenses can mitigate or negate the downside protection offered by IULs, and interest rate guarantees usually accompany a rate cap that limits the amount of return a policyholder can earn.
When policyholders pay their premiums, a portion of the premium pays the cost of insurance, a portion pays fees and other charges imposed by the insurer, and the remainder goes to the cash value of the policy. When IULs reach a specific value, policyholders may choose to reduce or skip premium payments until the policy falls below a particular value. Policyholders may also have the ability to borrow against the cash value portion of the policy; however, unpaid loans may reduce the death benefit.
IULs have several disadvantages over other investment vehicles, including:
- Caps on interest and accumulation percentages
- Lack of direct participation in the stock market
- Management
- Potential for premium calls if the policy value falls below a specific threshold
Common Areas of Misconduct
Financial advisors and firms may inappropriately recommend IULs to individuals or families whose financial or investment goals do not align with the benefits and risks of these products. Improper recommendations can occur due to various types of financial advisor misconduct, such as:
- Breaches of fiduciary duties, such as self-dealing or conflicts of interest
- Broker negligence in assessing the suitability of IULs for a client’s objectives or risk tolerance
- Misrepresentations regarding the returns, features, downsides, and risks of IULs
- Failure to supervise firm representatives
Some of the ways that a broker or advisor may negligently or willfully mislead an individual or family into putting their money into an IUL include:
- Recommending Unsuitable IULs for Older Clients – IULs may not suit the financial needs of older clients in or approaching retirement, as withdrawals of money that include investment gains before policy maturation can trigger income tax liabilities.
- Deceptive Marketing Practices – Sellers may pitch IULs using deceptive representations about IULs, such as selling them as equivalent to traditional investment products or claiming tax-free or guaranteed income streams.
- Excessive Fees – IULs that charge excessive management fees can significantly mitigate or negate any potential returns that a policyholder might obtain.
- Misleading Illustrations That Overestimate Likely Returns – Sellers may present prospective clients with overly optimistic illustrations that suggest unobtainable or improbable returns for IULs, given hidden factors like rate caps or policy expenses.
- Multi-Level Marketing Sales Schemes – Some sellers may operate under a multi-level marketing model, recruiting clients to market IULs to their personal and professional networks. Depending on the structure of an MLM, it can stray over the line into an unlawful pyramid scheme.
Sellers of IULs use various marketing phrases and slogans to tout the perceived advantages of IULs, while ignoring or minimizing the downsides, challenges, and risks of these products that may make them unsuitable for many individuals and families. Some of the most common misleading statements that sellers may make about IULs include:
- “Tax-Free Retirement Income” – Sellers may advertise IULs as similar to other tax-advantaged retirement accounts like Roth IRAs and pensions, but fail to disclose risks like policy lapses and rising costs of insurance. These marketing statements may also falsely present IULs as providing a guaranteed income stream for retirement.
- “Be Your Own Bank” – Promoters of IULs may argue that the ability to borrow from the policy can help fund further wealth building, but overlook the fact that failing to repay loans risks letting the policy lapse or reducing the death benefit. This line of marketing also overly simplifies the concept of infinite banking by not disclosing how costs affect a policyholder’s ability to build wealth by borrowing against the policy.
- “No Downside Market Risk” – Sellers may focus on the interest rate guarantee offered by IULs without also explaining that rate caps and policy expenses can negate that downside protection. Marketing may also ignore other potential risks, such as policy lapses due to declining value or financial troubles for the issuing insurance company.
- “Indexed Growth with No Loss” – Marketing for IULs may incorrectly imply that policyholders get to participate in the stock market and ignore the potential financial risks of the indexed portion of the cash value account, such as insurance expenses, caps, and spreads.
- “Outperform Your 401(k)” – Financial advisors or insurance companies may advertise IULs as a better alternative to qualified retirement accounts, ignoring the benefits of tax-advantaged plans like employer matching and the ability to tap into market performance. These statements may also wrongfully imply that IULs offer superior tax benefits or less volatility than common kinds of retirement accounts.
- “Tax Shelter for High-Income Earners” – Some sellers may pitch IULs to high-net-worth individuals as a tax loophole. However, structuring an IUL to avoid taxes can trigger scrutiny by state or federal taxing authorities. Sellers may also overlook the risks of interest rates not providing returns when explaining the possible upsides of IULs.
- “Life Insurance with Living Benefits” – Sellers may try to portray IULs as a dual-purpose instrument, providing life insurance with the benefit of an investment vehicle. However, sellers may fail to disclose that the “living benefits” of IULs depend on various restrictions, such as underwriting requirements or expensive riders.
Financial Firms and Life Insurance Companies Engaged in IULs
Various life insurance companies have made a significant business out of selling IULs either directly to customers or through financial advisory firms that recommend those products to their customers. Some of the life insurance providers most prominent in the IUL industry include:
- Pacific Life
- Allianz
- National Life Group
- Minnesota Life
- Fidelity and Guaranty
- Lincoln Financial
- Transamerica
- Mutual of Omaha
Many people purchase IULs based on the advice and representations made by their financial advisors. Some of the financial firms that have engaged in promoting IULs to current and prospective clients include:
- World Financial Group
- PHP Agency
- Family First Life
- Symmetry Financial Group
- Integrity Marketing Group
- LifePro Financial Services
- Equis Financial
- Five Rings Financial
IULs in Greenville, SC
Individuals and couples who have lost money after investing in an IUL due to a financial advisor’s negligent advice or misleading marketing may have legal claims that can recover compensation and hold financial firms and insurance companies accountable. People in Greenville who have suffered an IUL scam might pursue their claims in court, either in South Carolina state court in the Greenville County Courthouse or in federal court in the U.S. Courthouse in Greenville.
How an IUL Lawsuit Lawyer Can Help
If you’ve lost money or investment opportunities because you bought into an IUL that doesn’t provide the returns your financial advisor or insurance provider promised, you may have a legal claim against the firms in question. An attorney from RP Legal LLC can help you pursue an indexed universal life lawsuit to recover compensation from a financial advisor or insurance company for losses you incurred due to an improperly recommended IUL product by:
- Reviewing the circumstances surrounding your purchase of an IUL to determine whether negligence or misconduct by your broker or advisor led you to agree to an unsuitable financial product
- Determining your financial losses from the IUL
- Identifying parties with potential liability, including advisors/brokers, financial firms, or insurance companies
- Vigorously pursuing the financial recovery and accountability you deserve for negligence or misconduct that caused your losses, even if that means taking your claim to court
Contact Our Firm Today to Discuss Your Legal Options
If a financial advisor pressured or coerced you into investing in an IUL and you suffered financial losses as a result, you may have a legal claim against them that could provide compensation for those losses. Call RP Legal LLC today at (803) 805-7546 for a confidential consultation with an experienced IUL lawsuit attorney. Let’s discuss your right to seek financial compensation for losses you sustained after a broker or advisor negligently or willfully recommended an unsuitable IUL product.