2025 1110 - InsuranceNewsNet - Kyle Busch Case: A day of reckoning for indexed universal life?, by John Hilton

  • 2025 - LC - Kyle Busch vs. Pacific Life Insurance Company  ---  [BonkNote]
  • 2025 1110 - InsuranceNewsNet - Kyle Busch Case: A day of reckoning for indexed universal life?, by John Hilton  ---  [BonkNote]  ---  [link]
  • Lawsuits by disgruntled customers unhappy with the performance of their indexed universal life policy are nothing new.  Insurance company defendants often allege greedy attorneys and overreaching clients before settling, usually with terms under seal.   Insurance company defendants often allege greedy attorneys and overreaching clients before settling, usually with terms under seal.
  • But a new complaint from race car driver Kyle Busch and his wife, Samantha, is something else entirely.
    • 2025 1120 - LC - Kyle Busch vs. Pacific Life - 5:25-cv-00195 - Document 1-1 - Complaint - 50p
  • "We're going to show the world that this was a huge and utter scam," Samantha Busch said in a video the couple widely shared on social media.
    • 2025 1029 - X.com - Kyle and Samantha Busch re: Pacific Life IUL - Statement and VIDEO - [link]
  • Filed in Lincoln County, N.C. state court, where the Busches live, the complaint accuses Pacific Life Insurance Co. and its appointed agent of designing and promoting a series of complex IUL policies as "tax-free retirement plans" that were misrepresented as safe, self-funding investment vehicles.
  • PacLife statement - <WishList>
  • "I'm excited by this, and I'm hurt by this," said Matthew Decker of Leveraged Wealth Management. "I'm excited because someone like Kyle Busch is going to be able to help us change this industry."
    • In a YouTube video discussing the case and its impact, Decker acknowledged how unusual the lawsuit is for the industry.
    • I'm kind of shocked that Kyle Busch is calling out a company by name," he said. "That makes me think he's not scared."
      • 2025 1029 - Cash Value Life Insurance Reviews - Matthew Decker of Leveraged Wealth Management - Kyle Busch's Index Universal Life Insurance Nightmare - [VIDEO-YouTube-10:34]

The trouble with IUL

'Stonking' death benefit

  • In a commentary on the Busch lawsuit, longtime life insurance executive, consultant and writer Bobby Samuelson points to the "stonking $44.5 million death benefit" as a defect. The huge death benefit led to enormous cost-of-insurance charges, plus a ballooning commission for the agent, wrote Samuelson in his Life Product Review column.
  • Larry Rybka began speaking about IUL construction problems as early as 2019. Chairman and CEO of Valmark Financial Group, Rybka is particularly annoyed by premium financing IUL, whereby premiums are financed through bank loans and interest rate changes can leave policyholders upside down.
    • 2019 10 - NAEPC JOURNAL - How to Retire in the Magical Retirement Income in the Clouds, Issue 32, by Lawrence J. Rybka, J.D., CFP® - 11p
      • Executive summary: This article examines the use of premium financed indexed universal life (IUL) policies to provide retirement income for clients. It explores the major assumptions in the IUL policies and in the bank loans used to finance them. Most importantly, it reveals undisclosed risks often taken by clients in these transactions.

Teaming up to reform IUL

  • Although they are competitors, Samuelson and Sheryl Moore, founder of Wink, Inc. and Moore Market Intelligence, joined forces in 2022 to author a letter to the National Association of Insurance Commissioners on the regulation of IUL.
    • 2022 (no date) - Letter - Bobby Samuelson and Sheryl Moore to NAIC - 1p 
  • Since then, regulators adopted AG 49-B, which further attempts to restrict the maximum illustrated rate on IUL policies.
  • The Busch case might end up doing more to change the IUL game than anything regulators are doing.
  • But whether the Busches even want to settle is an issue in itself. During their public campaign in support of the lawsuit rollout, the couple mentioned "teachers, police officers, veterans, widows" who have been shortchanged by IUL investments.
    • "Kyle and Samantha Busch are determined to use their experience and platform to shine a light on an abuse that happens every day to ordinary consumers who do not have the resources or ability to fight back," Rikard said. "Their goal is not only to recover their own losses but to expose how systemic and damaging these misrepresentations have become."