Consumers may be able to file an IUL lawsuit if their insurance provider misrepresented the policys performance with false marketing promises. I hear through the grapevine that one of the largest IMOs in the industry when it comes to selling IULs (a different one than Shurwest) is in deep on this as well. Minnesota Life would be sued itself by several disgruntled clients. In the case of a sudden or unexpected death, life insurance can help cover debts and provide income for bereaved family members. drug injury lawsuits and product liability lawsuits. AG 49 was adopted by the NAIC in 2015 to rein in IUL illustrations that were showing consumers unrealistic returns. IUL policies are also permanent insurance policies that pay a death benefit to survivors, notwithstanding whether the insured has passed away. Terms and Conditions. a similar story found in many other lawsuits, Economy hits millennials ability to build, transfer wealth, A year after crypto's crash, Philly Bitcoin believers hold on to hope, Jorgen Vik: Don't panic over Social Security rumors, reports. Although IUL policies have the potential to have interest rates which vastly exceed those seen with other life insurance policies, there are also risks associated with these accounts. Find out how we can be a team-player for your firm: Class Action Lawsuit regarding IUL multipliers, class action lawsuit filed in Orange County last week against Pacific Life. , Can I join this law suit against Pacific Life. This practice is called arbitrage. In fact, many indexed universal life insurance buyers have been encouraged to buy up to five times the amount of insurance they actually need with these low-cost loans, Roth says. The charges that Transamerica applied to people who owned these universal life insurance policies caused tremendous surprise and stress for the people who received them, many of whom are now senior citizens, and some of whom are quite elderly and on fixed incomes, he said in a statement. Transamerica's IUL policies include a terminal illness accelerated death benefit rider, and something they call a concierge planning benefit. Class actions on "vanishing premium" sales practices reaped "huge jury verdicts, multi-million dollar class action settlements and changes that go to the very foundation of the life insurance industry." We're talking literally billions of dollars in aggregate settlements. But critics say indexed universal life insurance is being sold dishonestly. If you make a purchase using The complaint alleges that, among other things, the company deceptively sold its Indexed Universal Life ("IUL") policies by failing to disclose the high costs associated with these policies. It was filed by a law firm out of Phoenix with a long track record of class action suits in life insurance. Mr. Rosenfield also alleges Transamerica wanted policyholders to relinquish their life insurance so the firm could recoup losses it sustained as a result of low interest rates. Besides the questionable history of the person behind the structure, the structure itself has such glaring flaws to it that youd have to be an idiot to recommend this to clients. Insurance companies use sales illustrations and marketing materials showing some account values gaining favorable growth in future years to sell the IULs. John Hancock Life Insurance Co. settled a lawsuit related to UL insurance costs in July for $91.25 million. By submitting your comment and contact information, you agree to receive marketing emails from Top Class Actions regarding this and/or similar lawsuits or settlements, and/or to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify. Insurance agents typically arent required to undergo the same training as stockbrokers to sell so-called derivative products such as options based on an underlying index like the S&P 500. Take a photo of a faulty item and add a brief description. The company's new policy on head count, made clear in its first-quarter earnings report, aligns with decisions made by Morgan Stanley and Bank of America. such links, we may receive a commission, but it will not result in any additional charges to you. status of any class action settlement claim. settlement administrator or your attorney for any updates regarding OnPointe is very easy to use. If you received a data breach notification or feel your Read More, Radius Health, Inc. Merger Terms May Have Harmed Stockholders An investigation into the fairness of the sale of Radius Health, Inc. (Radius or the Company) (NASDAQ: RDUS) to Gurnet Point Capital (Gurnet Point) and Patient Square Capital (Patient Square) has commenced. To read the complaint for the amended class action lawsuit, click here (the class was certified at the end of 2021). Contact us today to see if you are entitled to join the Indexed Universal Life Policy (IUL) Class False Marketing lawsuit investigation. ARE INDEXED UNIVERSAL LIFE INSURANCE (IUL) POLICIES GOOD? Commissions do not affect our editors' opinions or evaluations. The attraction of the product rested on an assumption of perpetual 50% option profits, which the complaint describes as an indefensible assumption that is unsupportable, unsustainable and actuarially unreasonable.. Companies that use false marketing could be in violation of state or federal law, entitling consumers to damages and other relief. Mix in massively complex products designed to juice illustrations with opaque and unaccountable features and you have the recipe for future financial disaster, said Birnbaum in a July 2020 statement that warned consumers against buying IUL. Consumers may not know about the intricacies of IUL policies, allowing PacLife to exploit their lack of knowledge. settlement administrator or your attorney for any updates regarding When the interest rates are bound by the movement of the stock or bond market, this becomes an Indexed Universal Life, or IUL insurance policy. It is a bit different than the amended complaint. John may be reached at [emailprotected] Follow him on Twitter @INNJohnH. 2023 Forbes Media LLC. During this meeting, their agent Tiffany Xu reportedly encouraged them to take out an Indexed Universal Life policy based on false and misleading representations of the policys performance. An IUL class action lawsuit investigation is underway to probe into allegations that people who purchased Indexed Universal Life (IUL) insurance policies were misled into expecting unrealistic rates of return that comes after insurance companies presented used fabricated and false illustrations in marketing literature and sales material. John may be reached at[emailprotected]. Required fields are marked *. IUL is one of the industry's most popular life insurance products. https://topclassactions.com/wp-admin/admin-ajax.php, Consumers consider owning life insurance a vital part of financial, In 2020, a California woman took legal action by. An indexed life insurance policy is like other life insurance policies in that it will provide a death benefit to a beneficiary in exchange for premiums paid every month. You might be using an unsupported or outdated browser. (More: Universal life insurance lawsuits underscore product risk), Transamerica said in a statement that the policies permit the company to adjust monthly deduction rates up to a contractually guaranteed maximum, and that the increase was necessitated by low long-term interest rates, changes in expectations as to future mortality experience, and other factors, and in accordance with the policies contractual terms.. However, after two years of paying $500,000 annual premiums, Li reportedly started to notice significant losses. New IUL products featuring "multipliers" or "bonuses" prompted the IUL Illustration Subgroup to consider . The issues in Privacy Policy | Top Class Actionss website and social media posts use affiliate links. But indexed universal life would not be increasing in popularity if millions of long-term planners and families were not finding the cost of owning the product to be a good value, says ACLI spokesperson Jack Dolan. Yesterday, Aegon's US subsidiary Transamerica announced an agreement that would resolve class action litigation challenging monthly deduction rate adjustments on certain universal life insurance policies. It is presented The structured settlement company isnt bonded. In the IUL sales structure Im covering in this newsletter, the payment streams were coming from Federal employees (from their pension payments). The fact patterns are perfect examples of poor market conduct including inflated commissions, aggressive claims such as 'guaranteed performance' because it is a 'whole life' product, as well as reduced performance even under modest changes to the illustrated rate. Its not good business to work with an IMO you cant trust! Get In Touch! New lawsuit seeks class action for victims of alleged fraudulent IUL sales By John Hilton A new lawsuit filed last month adds to the legal liability for Minnesota Life Insurance Co. and. Attorneys How To Find The Cheapest Travel Insurance, Tips for Buying Life Insurance for the First Time, What To Expect In Life Insurance Medical Exam, How To Choose A Life Insurance Beneficiary. Insurance companies are watching what happens with this lawsuit very carefully, and it could affect the industry as a whole. 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Most policies have both an interest floor and an interest cap, meaning that maximum gains are limited even if a stock index performs extremely well. Its truly amazing that Minnesota Life and one of the bigger IMOs in the industry fell for this plan. Unfortunately, every software program weve seen that compares IUL to mutual funds or to tax-deferred plans like 401(k) plans is either inaccurate or woefully inaccurate. Also see: How To Avoid Life Insurance Fraud. THOUGHTS AND CONSIDERATIONS BEFORE YOU BUY - Mtis Money Matters. Your email address will not be published. This will be posted quickly, exposing the company and letting others see what happened to you! We defy any member of the Committee to comprehend and explain, so a purchaser of this product could understand how this product operates, he says in a letter to the NAIC. Attorneys heading up the claim said proper protocol was not followed. For more than a decade, indexed universal life insurance (IUL) has been one of the life insurance industrys most profitable businesses. If you dont keep paying the higher premiums to keep the policy in-force, you risk losing all previously paid premiums, as well as the death benefit going forward. Opinions about indexed universal life insurance vary, but critics warn that its not the riskless investment it may be sold as, and you could lose it all. Just because some agents misrepresent something does NOT make it a bad product. The Pacific Discovery Xelerator policy is Pacific Life Insurance Companys take on the indexed life insurance policy, according to Investopedia. It took two years of hard-fought litigation, but we have accomplished our goal., (More: Transamerica sued for cost increases on universal life insurance contracts). That plan is the best way for Shurwest to repay the aggrieved parties, its attorneys have said. PLEASE EMAIL ME IMMEDIATELY TO SET UP A CALL. Consumers consider owning life insurance a vital part of financial wellness including aging Americans who want to ensure that their loved ones are provided for after they pass away. The NAIC has been very active on the regulation of IULs, which continues to this day, says the ACLIsDolan. To read the complaints filed against Minnesota Life, Shurwest, and several other defendants, and to read a separate CLASS ACTION complaint against Minnesota Life, click on the following link: One question I get quite often from advisors who have been getting my newsletters is: what exactly do you do? Please try again later. Use of editorial content without permission is strictly prohibited|All rights reserved, Universal life insurance lawsuits underscore product risk, Transamerica sued for cost increases on universal life insurance contracts, Carson Groups Varghese maintains upbeat outlook on the economy, CalSavers on hunt for new leader as executive director Selenski departs, Slott urges moving money from traditional IRAs and their tax stench to Roth IRAs, Beacon Pointe buys $1 billion RIA to expand operations in New York City, Advisor Group RIAs add alts, and fresh conflict, to platform. I was asked by an IMO owner to review the structure and give my opinion. Consumers should avoid IUL because the insurers and agents who sell the product have no obligation to work in the consumers best interest. Depending on the policys terms, and pros and cons, a policyholder can tie up to 100% of their policys value to the stock index. Stay away from them.. We want to help people make smart financial decisions How? ClassAction.org is a group of online professionals (designers, programmers and writers) with years of experience in the legal industry. The American Council of Life Insurers (ACLI), which represents 280 companies in the insurance industry, admits that IUL is not for everyone. Although IUL policies can be a good idea for some people, it is important that insured individuals are properly informed of the risks surrounding the policies. I asked simple questions like is there a bank or trust company (reputable one) that is managing the payments in this structure? The main issues are not surprising to anyone who has studied the PDX product. Using either one can get you sued. A class action lawsuit filed in the California Superior Court alleges that Pacific Life Insurance Company has created a false marketing scheme to push and sell their PDX IUL policies by using the complicated nature of IUL policies against unknowing consumers. After these representations, Li reportedly opted into a IUL policy through PacLife. The lawsuit was filed Aug. 6 in Orange County Superior Courts by plaintiffs Hong Li and Tailong Liu. What has happened is exactly what I predicted would happen when I saw the structure nearly two years ago. Chicago. So, its no wonder that IULs are complicated. What you will read in this newsletter is a classic example of me helping an IMO and ultimately hundreds of agents from getting caught up in the lawsuits that are now flying. Its not good business to work with an insurance company you cant trust! Beginning in 2019, Shurwest began branding itself as The Quantum Group. Minn Life, Shurwest, and Others Sued in Bad IUL Sales Structure. Life insurance companies that sell traditional policies like whole life insurance invest primarily in corporate bonds and government-backed mortgages where the money will be safe and generate a small, but reliable, annual return each year. Please review our Affiliate Link Disclosure for more information. Learn more about the cookies we use. We have affiliations in specific cases with attorneys licensed to practice in almost every state court in the U.S. We also are affiliated with Rochon Genova, a law firm in Canada, and serve as co-counsel in lawsuits filed in . Did you or a family member purchase an Indexed Universal Life Policy (IUL) and are NOT receiving the returns or account value increases that were shown to you in marketing materials or sales illustrations? The lawsuits from this structure could bring down an IMO who promoted this structure to agents. Learn more about reprints and licensing for this article. Whats your clients retirement income style? This newsletter sums up the reason for my existence in an all too often seedy industry. All Rights Reserved. Your email address will not be published. Is it better to let the money sit safely in a savings account? 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