IUL Lawsuits in Utah

Have you purchased an indexed universal life insurance policy (IUL) and lost money? Firms often market IULs as a no-risk method to secure retirement income and preach about how you can build your wealth with no downsides. The reality is that IULs are highly risky products and often carry hidden fees and expenses that can jeopardize policyholders’ finances.

If you believe your financial advisor or insurance broker lied or misrepresented your policy, contact RP Legal LLC today. Insurance companies must obey strict rules when selling life insurance products. Violating these rules through false or misleading representations can be grounds for a lawsuit. We can help you pursue compensation from insurance brokers or agents who lied to you and recover your losses.

Contact our offices online or call (803) 805-7546 to speak to an IUL lawsuit attorney in Utah.

How Do IULs Work?

IULs have two main components:

  1. A death benefit that pays beneficiaries when you die
  2. A cash value portion tied to the performance of an index

IULs are permanent life insurance policies, meaning they won’t expire and last as long as you pay premiums. Like other types of permanent life insurance, you can adjust the monthly premiums and the death benefit.

The key feature of IULs is how the cash value portion is invested. Unlike whole life insurance, which accrues at a guaranteed rate set by the insurance company, IUL rates are tied to an equity index, like the NASDAQ or S&P 500. The cash portion earns interest based on the index, which may rise or fall.

The structure of IULs leaves them highly susceptible to market risk. In some years, the cash portion might grow significantly, while in other years, it might not. Most IULs have a guaranteed interest floor and interest caps that keep returns within a specific range.

Insurance Firms Make a Lot of Money on Fees

Firms often market IULs to investors as a means to secure retirement income and protect their loved ones in the event of death. However, firms frequently leave out an important fact – they can make a lot of money off IULs. Agents can secure commissions as high as 100 percent of premiums paid in the first year. This can amount to tens of thousands of dollars for high-income policyholders.

This incentive structure means agents and brokers might push IULs, even when they don’t fit the client’s needs. Once they purchase the policy, the firm imposes additional fees and account expenses. These fees eat into the policy’s cash component and can reduce the death benefit. Premium hikes can also result in policy forfeitures, where policyholders lose the entire death benefit and cash component. However, the insurance companies still get paid.

Types of Insurance Misconduct

Below are some of the most common types of misconduct we encounter in IUL litigation.

Breach of Fiduciary Duty

Financial advisors and brokers generally have a fiduciary duty to their clients to act in their best interests. As such, they must recommend and promote products that fit their finances and situation. These entities can be liable if they have a conflict of interest or mismanage their clients’ policies. For instance, if a broker gains commission from an IUL sale and does not disclose that to you, it could constitute a breach of their fiduciary duty.

Broker Negligence

Insurance brokers typically employ agents who work directly with clients and sell plans. The brokerage is responsible for training its agents and ensuring they have the proper certifications. Brokerage may not perform due diligence in hiring or may train their agents to engage in deceptive or illegal business practices. In these cases, the brokerage may be liable for policyholder losses.

Recommending IULs for Older Customers

IULs rely on gaining interest over time and require a specific time horizon to become viable. Firms might market IUL policies to older clients who may not live long enough to reap the policy’s benefits. For instance, an agent who pressures their 65-year-old client into an IUL should recognize that there may not be enough time left for the policy to generate the promised returns.

Deceptive Marketing Practices

Insurance brokers and agents must make truthful statements and representations in their marketing materials. In many IUL cases, plaintiffs have alleged that firms use deceptive language or outright falsehoods in presentations. These presentations might lie about policy funding mechanisms or omit important fee details. Common misleading phrases you might hear include:

  • Tax-free retirement income
  • Be your own bank
  • No downsides or market risk
  • Indexed growth with no losses
  • Outperform your 401(k)
  • Tax shelters for high-income earners
  • Life insurance with living benefits

Firms also use language to market IULs as investments when they are not investment products.

Excessive Fees

Hidden fees are another major concern in IUL scams. Agents and brokers might be vague about fee structures and amounts and refuse to provide information when asked. They may also change fees or start charging new fees without notifying you. It’s not uncommon for policyholders to open their statements and see that excessive fees have drastically drained their policy value.

Overestimating Returns

Insurance firms heavily emphasize the high potential returns when marketing IULs. The problem is that projections are often based on overly optimistic assumptions about index performance. Calculations and formulas can also omit the impacts of account expenses and premium changes, and ignore historical data on market performance.

Fraudulent Practices

The IUL landscape is, unfortunately, no stranger to scams and fraud. Fraudulent practices range from using illegal funding mechanisms to outright stealing premiums from policyholders. For instance, insurance firm Pacific Life has recently faced a lawsuit relating to a Ponzi-scheme funding mechanism for its PDX IUL products. Insurance firms might also offer universal insurance policies that don’t conform to state insurance standards.

MLM Sales and Recruiting Tactics

Many insurance firms and organizations use sales tactics similar to those of multi-level marketing scam companies. Under this structure, firms might ask policyholders to invest their own money with the promise of returns when they recruit others into the program. The result is that most end up losing money, except for the few who can recruit others into the scam.

Firms that Sell IUL Policies

IULs were relatively rare in the past, but the financial incentives have caused numerous firms to add them to their product portfolios. Today, several large nationwide insurance firms and groups sell IUL policies and financial products. We investigate fraud and misrepresentation against all brokerage firms and companies, such as:

  • Pacific Life
  • Allianz
  • National Life Group
  • Minnesota Life
  • Fidelity and Guaranty
  • Lincoln Financial
  • Transamerica
  • Mutual of Omaha
  • Penn Mutual
  • Prudential
  • Symetra
  • Equitable AXA
  • Ameritas
  • World Financial Group
  • PHP Agency
  • LifePro Financial Services
  • Five Rings Financial

IUL Lawsuits in Utah

A recent order filed by the Utah Department of Commerce resulted in the revocation of an individual’s broker license for selling fraudulent investments in conjunction with IULs. According to the order, the individual and a network of insurance agents solicited investments into a Ponzi scheme, promising future income to fund IUL premiums. According to court documents, agents were trained to recommend funding these investments using retirement money or home equity.

What Kind of Compensation Can I Recover in an IUL Lawsuit?

Through an IUL lawsuit, you can pursue financial compensation for any losses you suffered due to misrepresentations or false advertising. These losses could include:

  • Total cost of premiums paid into the policy
  • Lost cash value of the policy
  • The cost of excessive or illegal fees
  • Emotional distress and suffering

In some cases, courts might also award punitive damages to deter future illicit behavior. We aim to be as comprehensive as possible with compensation and will examine your case from every angle. IUL scams can cause losses of tens of thousands of dollars or more, so victims deserve an attorney who will fight for maximum compensation.

How an Attorney from RP Legal LLC Can Help You

Insurance companies might try to hide their misconduct behind complex contracts and agreements. The sheer complexity of these agreements can make it hard to prove their wrongdoing. The attorneys at RP Legal LLC have over 100 years of collective experience helping individuals like you recover compensation after insurance fraud and misrepresentation. We are the preeminent IUL lawsuit firm nationwide and have more experience with IUL litigation than any firm. When we are on the case, we will use every resource and strategy to achieve victory.

Contact Us Today for a Case Consultation

Insurance scams often prey on the vulnerable or those who might not have much financial knowledge, and they can result in devastating financial losses. RP Legal LLC dedicates itself to victims of bad insurance practices and will do everything in our power to hold insurance firms accountable for wrongdoing. Insurance firms can have deep pockets for defense attorneys, but we have the skills to match them.

Contact our offices online or call (803) 805-7546 today for a case consultation. Our attorneys are available 24/7, and we don’t charge a fee unless we win your case, 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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Featured on InsuranceNewsNet
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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