IUL Lawsuits in Texas

Have you purchased an indexed universal life insurance policy in Texas and lost money? Insurance companies might market indexed universal life insurance as a means to protect your family and grow your wealth tax-free. The reality is that complex life insurance policies come with several hidden fees. While the policy might make sense for some, others are shocked when their policy value drops due to hidden costs and expenses.

If you believe that your insurance broker or agent lied or misrepresented facts about the policy or fees, you may be able to pursue financial remuneration. Depending on your circumstances, you may be able to recover compensation for premiums paid, lost policy value, and other financial losses you may have suffered.

RP Legal LLC has decades of experience helping individuals pursue insurance fraud claims. We can confront bad-faith insurers who use illegal sales tactics and hold them accountable for their harm. We have the skills and resources to manage your claim throughout the entire process, from initial filings to final negotiations and litigation.

Contact our offices online or call (803) 805-7546 today to speak to a Texas IUL lawsuit attorney.

Why Hire RP Legal LLC for Indexed Universal Life Lawsuit Litigation?

The IUL lawsuit attorneys at RP Legal LLC focus entirely on helping victims of insurance fraud and financial abuse. We have over 100 years of collective legal experience and have recovered millions for clients nationwide. We are one of the country’s pre-eminent firms for insurance litigation and have more experience in indexed universal life insurance litigation than any other firm. We know how insurance companies work and can gather evidence of their wrongdoing, such as:

  • Not making suitability determinations or making incorrect ones
  • Making false statements to sell IUL policies
  • Not training or supervising sales representatives
  • Not following company procedure when issuing policies
  • Engaging in fraud or theft of policyholders’ premiums

Insurance companies often use complex contracts and obtuse terms to take advantage of customers. We can identify these unscrupulous business practices and fight to recover the financial compensation you are owed.

What Is an Indexed Universal Life Insurance Policy?

An indexed universal life insurance policy (IUL) is a type of permanent life insurance. Unlike term life insurance, permanent life insurance doesn’t expire and lasts as long as you continue to pay premiums. IULs contain a death benefit that pays beneficiaries when you die and a cash value component that accrues in value over time.

The defining feature of an IUL is that the cash value component is tied to the performance of a stock or bond index, such as the S&P 500. When you pay premiums, the insurance company takes them and invests them in options that track the relevant index. If the index does well, the cash value grows. If it does poorly, no cash value deductions are made, as most IUL policies have a guaranteed minimum interest rate.

This description might make it sound like IULs are investment products, but that is not true. When you buy an IUL, you are not directly buying exposure in the stock market. Instead, you pay a significant amount in fees to purchase the policy.

Downsides of IULs

IULs are often marketed to people as an easy way to make money and fund retirement. You might hear marketing phrases such as “no-risk investment” or “tax-free retirement income.” In truth, IULs have several downsides that make them less than ideal for many people.

Insurance Company Takes a Cut

Insurance brokers and agents can make a lot of money from IULs. Agencies and companies take a significant fee from these purchases, incentivizing them to promote the product. Brokers can earn high commissions on sales, giving them a reason to market the product even if it may not be right for you.

Over time, the policy might not gain as much value as you would expect. Then you discover the extent of the cut the insurance company took, which could include expenses for:

  • Premium loads and the cost of policy charges and agent commission
  • Monthly charges for internal policy costs
  • Mortality charges that cover the risk of providing a death benefit
  • Cost of keeping life insurance active
  • Other expense charges

Even when the cash value component of your policy doesn’t lose value, you can still lose money from all the charges.

Unclear Fees and Unrealistic Expectations

Insurance brokers and agents might also withhold information about the fees you’ll be paying. Firms can be hazy about the details, which is usually a sign that they are planning to take a huge cut, typically within the first few years. Brokers may also provide unrealistic growth projections that vastly overestimate how much you can expect to earn from the policy.

Poor Performance

The cash value component of IULs is tied to a stock or bond index. There is likely a minimum interest rate, and you won’t suffer losses in your cash value if the index falls, but no interest will be added to your account during that period. The insurance company primarily makes money from the premiums you pay, and it still ends up making money even when the investment component of the policy does poorly.

Common Areas of Misconduct

Below are some common areas of misconduct that could be grounds for an IUL lawsuit.

Breach of Fiduciary Duty

Brokers and agents have a legal duty to recommend appropriate products and act in the best interest of their clients. They can also be liable if they mismanage policies and cause policyholders to lose value by making poor management decisions.

Broker Negligence

Brokers are responsible for training their agents and ensuring they do not make false claims or representations. If a broker utilizes untrained agents and they make false statements, the brokerage or agency can be liable for negligence.

Recommending IULs for Older Customers

A brokerage may also push IUL products on older customers who will not be alive long enough to reap the benefits of the policy. Older adults might find their retirement in jeopardy if the premiums suddenly rise and they cannot afford the policy. If the policy lapses, they can lose their death benefit as well as their cash value component.

Deceptive Marketing Practices and Fees

Brokers and agents might stretch the truth or make outright false claims when promoting IULs. They might say things like “tax-free retirement income” or “no-risk investments.” They might not provide all relevant information regarding fees and other account charges that can drain the value of your policy.

Misleading Illustrations and Overestimating Returns

When presenting policy details, brokers and agents might rely on exaggerated earnings projections. Charts and data might only account for the most idealistic projections and not accurately portray realistic returns.

Fraudulent Practices

Due to their complexity, IUL policies can be subject to fraud that is difficult to detect. For instance, brokerages might use illegal funding mechanisms or illegally siphon funds from policyholders without notification.

MLM Recruitment and Sales

 The structure of IUL sales can be similar to that of MLM and pyramid schemes. Agents and brokers get paid whenever someone buys a policy, so they have an incentive to recruit as many people as possible. The result is that funds get siphoned from the bottom of the organization (customers) to those at the top (agents, brokers, and financial firms).

Firms that Sell IULs

 IULs used to be a relatively rare financial product but have exploded in popularity in recent years. Now, several large nationwide firms sell IULs, and many have been embroiled in IUL class action lawsuits related to fraudulent IUL practices. If you have purchased an IUL from one of the firms/organizations below and have lost money, give us a call to discuss your options.

  • Pacific Life
  • Allianz
  • National Life Group
  • Minnesota Life (Securian)
  • Fidelity and Guaranty
  • Lincoln Financial
  • Transamerica
  • Mutual of Omaha
  • Penn Mutual
  • Prudential
  • John Hancock
  • MetLife
  • Global Atlantic
  • Ameritas
  • World Financial Group
  • PHP Agency
  • Symmetry Financial Group
  • Equis Financial
  • Five Rings Financial

IUL Lawsuits in Texas

 In 2021, a class action lawsuit filed in San Antonio resulted in USAA paying universal life insurance policyholders a $90 million settlement for excessive maintenance and administrative fees. Specifically, the complaint alleged that USAA charges illegal fees using rate factors that the insurance agreement excluded. According to one attorney in the complaint, USAA allegedly overcharged customers by as much as $460 million, though USAA denied that it had committed any wrongdoing. The settlement affected over 120,000 policies extending back to March 1st, 1999.

IULs can be subject to the same types of excessive and exorbitant fees. IUL policyholders must be vigilant and review their accounts frequently to be sure they know what fees are being applied. They should speak with a lawyer at the first sign of any wrongdoing.

 Contact RP Legal LLC Today for a Case Consultation

Insurance brokers and agents are required to use honest representations and promote products in their clients’ best interests. If you believe your broker or agent lied to you and you lost money on an IUL, the attorneys from RP Legal LLC are here to assist. Big insurance companies and financial firms may have deep pockets for lawyers, but we have the skills and track record to confront them. Our attorneys will spare no effort and investigate every possible avenue to hold insurers who commit fraud accountable.

Contact our offices online or call (803) 805-7546 today for a case consultation with a Texas IUL lawsuit attorney from RP Legal LLC. You have limited time to file suit, so don’t hesitate to get in touch.

Last Updated: 08-06-2025

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.
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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.

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LEADERSHIP

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

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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.

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