Roccy DeFrancesco, JD The issues in. 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. IUL is one of the industry's most popular life insurance products. Before commenting, please review our comment policy. They apparently dont have the money! New IUL premiums increased by 29% in the fourth. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for Orange County. Privacy Policy | I didnt understand that the illustration involved my borrowing from my policy and reinvesting large sums for several more years. The fact is, in a different (and better) economic environment, lessin premiums would be paid than originally planned, he notes. It is believed that some insurers are using current interest rates and costs to project policy benefits without taking into account how the performance of stock indexes and costs charged to the policyholder can fluctuate over time. Nonetheless, Vazirani insisted that his concern is to rid the industry of abusive marketing techniques being used to fund IUL sales. But the monthly policy expenses may have caused losses of several percent in the value of the policyand if it went down too muchthen policyholders got a premium call requiring them to put in more money, says Roth. Bobby Samuelson, editor at The Life Product Review. Decide which cookies you want to allow. Wilcox blames the low level of adoption on some tools on the fact that firms aren't spending enough time training advisors on the technology after they invest in it. v. Pacific Life Insurance Company, et al., Case No. The class action goes as far as to allege that PacLife structured the PDX Policies in a way that incentivizes its sales agents to heap even more risk on the unwitting policyowners, offering their own sales agents commissions if they successfully push through a PDX IUL policy sale. 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. All Rights Reserved. September 22, 2020. 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. The attorneys we work with, however, tipped us off to reports within the industry that suggest some companies may be misleading their customers when putting together their financial return illustrations. Please review our Affiliate Link Disclosure for more information. The problem is that these projections are not guaranteed, and may not come to fruition. Attorneys are interested in speaking to policyholders who currently hold or previously held the PDX policies issued between 2017 and 2019 as these policyholders legal rights may be affected. The move boosts data processing speed and establishes a modern infrastructure to build out the firm's vision for an all-in-one technology suite. He said the class action status enables 90,000 motorists to possibly get their money back; a total of $20 million. the Pacific Discovery Xelerator IUL 2, InsuranceNewsNet reported. 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. According to the IUL class action lawsuit, Li would not have taken out an insurance policy if she knew that Xu used false and misleading illustrations about policy performance to induce her into purchasing the policy. Remember, I wrote the book Bad Advisors: How to Identify Them; How to Avoid Them. Click Change Settings if you want to tailor the use of your cookies. How much annuity income can I expect to receive? The IUL sales structure I will talk about in this newsletter I saw a few years ago. The structured settlement company isnt bonded. lawsuits can be viewedhere. You must contact the With the structure payments, you are actually increasing the premium that goes into the IUL! Are the payment streams from the federal employees direct deposited into a trust or dedicated account that will then be used to make payments to the investor? By now you may have heard about a class action lawsuit filed in Orange County last week against Pacific Life. But if the option expires out of the money, the entire investment in that option is lost. How much annuity income can I expect to receive? The Class Representatives who suedand all of the Class Members like themare called Plaintiffs. Washington state regulators seek man facing felony insurance fraud charges, Wisconsin seeks policyholders of insolvent Time Insurance Co. products, Find out how you can submit FIP products were notorious as early as 2015, when several state regulatory agencies investigated the FIP products and determined them to constitute illegal usurious loans, the lawsuit reads. This is rather unique to Transamerica, and helps your heirs plan your funeral. Get breaking news, exclusive stories, and money- making insights straight into your inbox. So the sales were mainly to older clients and some who used money from IRAs (this alone is a problem since older people should not be buying life insurance as a retirement tool and you should NEVER take money out of an IRA or qualified plan to fund an IUL for tax-free borrowing (its a mathematical loser)). 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. such links, we may receive a commission, but it will not result in any additional charges to you. Minn Life, Shurwest, and Others Sued in Bad IUL Sales Structure. . Take a photo of a faulty item and add a brief description. This awful IUL sales story proves my point. Actions does not process claims and we cannot advise you on the Aegon USA Inc., View Guidelines. 2) I help them market (www.strategicmp.net for list of marketing tools) We believe that embracing these two values allows advisors to use their time more efficiently and effectively while helping their clients get the best advice possible. 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. 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. A qualified IUL attorney can determine your eligibility for legal action. To read one of the original complaints from 2019, click here. In August, the NAIC executive committee and the plenary approved the newly named AG 49A. However, this can result in some functions no longer being available. Its truly amazing that Minnesota Life and one of the bigger IMOs in the industry fell for this plan. Your financial situation is unique and the products and services we review may not be right for your circumstances. I do NOT like or trust most IMOs. The IUL Class Action Lawsuit is Hong Li v. Pacific Life Insurance Company, et al., Case No. So, assuming clients with money pay premiums into an IUL, the question is what to do with that money as you wait to fund the IUL over a 5-, 7-, 10-year period. The Los Angeles-based custodian's latest funding round was led by Insight Partners and Adam Street Partners. John may be reached at[emailprotected]. 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? Some of the insurance companies selling IULs include: This piece is written about the recent Indexed Universal Life Policy (IUL) Class False Marketing Lawsuit Investigation. And the insurance agent can make a commission on the sale of the structured payment and the target premium on the IUL is larger (winner winner chicken dinner)! 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. 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. I was sold a Pacific Life PDX IUL 2 product on 06/28/2020. Using various marketing efforts, agents allegedly targeted pensioners with the FIP strategy by offering them a lump sum in exchange for a portion of their future pension payments. An expanded class-action lawsuit alleges that Security Benefit Life Insurance Co. defrauded consumers by implementing a "fraudulent scheme" involving a proprietary index used in two fixed. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for the County of Orange. The answer to all of these very simple questions was NO! Their lawsuit seeks class-action status, a request that must be approved by the court. About Us The employee who is receiving $750 a month for the next several years could sell that payment stream for a lump sum. Shurwest reported current gross income of about $125,000-$150,000 per month, and future operating expenses to be $35,000-$40,000 per month. The primary issues are as follows: There is no telling that this complaint will be successful, but it may have a dramatic affect (win or lose) on our industry. A fresh lawsuit filed in Arizona bankruptcy court by Eleanor and Rocco Ciofoletti, of South Carolina, and Larry Stospal, of Texas, names both Shurwest and Minnesota Life as defendants. such links, we may receive a commission, but it will not result in any additional charges to you. This case has been out there for a few years and for whatever reason, the normal trade publications havent really written about it. Send us your story with as much detail as possible to fill out our investigation. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com. 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. administrator or law firm. 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. A reputable trust company isnt being used. Entire contents copyright 2020 by InsuranceNewsNet.com Inc. All rights reserved. There is a class action lawsuit alleging just that in California. For more than a decade, indexed universal life insurance (IUL) has been one of the life insurance industry's most profitable businesses. On page 12 paragraph 60 it states that the Living Life IUL offered by LSW is far more expensive then other LSW IUL products. To afford the budget for the money management involved in options trading and compensate the insurer and its agent, IUL policies can include significantly more fees and costs than an average life insurance policy. It is presented 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. It requires that designs with multipliers or other enhancements should not illustrate better than non-multiplier designs. The class doesnt exist from our point of view. We use cookies to improve functionality and performance, enhance user experience, and provide tailored content. Pacific Life Insurance Company Misleads Consumers Into Purchasing PDX IUL Policies, Alleges Class Action, GE Capital Assurance universal life price hikes may be unlawful and excessive, Creditor and debt collector calls class action lawsuit investigation. Although IUL policies have the potential for high rates of growth, the policies also have the risk of no growth if a stock market index performs fully. The plaintiffs later asked the court to terminate the lawsuit. Also see: How To Avoid Life Insurance Fraud. I was asked by an IMO owner to review the structure and give my opinion. If a lawsuit can be filed, indexed universal life insurance policyholders may be able to recover compensation for any harm they suffered in buying these policies. Class Action and Other Lawsuits What's the problem with this awesome sales concept? Its not a good idea to get involved in pyramid schemes! Recently, a class-action lawsuit was filed against Pacific Life regarding its popular and controversial PDX Index Universal Life (IUL) product. Top Class Actionss website and social media posts use affiliate links. OnPointe is very easy to use. document.getElementById( "ak_js_2" ).setAttribute( "value", ( new Date() ).getTime() ); document.getElementById( "ak_js_3" ).setAttribute( "value", ( new Date() ).getTime() ); document.getElementById( "ak_js_4" ).setAttribute( "value", ( new Date() ).getTime() ); Please note: Top Class Actions is not a settlement 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. 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 buyer buys the payments at a discount and then receives them going forward. Most IUL policies have a crediting floor of 0% to 1% which ensures that, even if a market consistently performs fully, the policy will grow by at least 0.5% or whichever floor is determined by the policys floor. State court rules can differ. IF YOU KNOW A CLIENT OR FRIEND WHO GOT CAUGHT UP IN THIS STRUCTURE, Minnesota Life would be sued itself by several disgruntled clients. If interested, please send an email toOutreach@ConsiderTheConsumer.com, find us onTwitterorFacebook, or evenconnect with us directly on our website! 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? Shurwest filed a lengthy bankruptcy settlement plan in November. *This publication is based on information retrieved from The Life Product Review, "#239 | Filed: PacLife PDX Class Action Lawsuit", Published by Bobby Samuelson, Editor, on August 11, 2020. Someone who is receiving annuity payments can choose to sell those payments to an investor for a lump sum. But if the COI exceeds the amount of the premiums, the deficit is debited from the cash value. Hong Li, et al. The three plaintiffs purchased Minnesota Life IUL products from Shurwest producers. v. Pacific Life Insurance Company, et al.. Case No. The lawsuit seeks class-action status welcoming the possibility that the attorneys working for the plaintiffs can prove that PacLife's behavior in marketing a certain indexed universal life insurance policy violates the law and hurts many people across the United States. Regulators vowed to keep a close eye on sales practices and did not rule out reopening the new AG 49A should they see abuses resume. Click here to download the FAQs about the software. We work closely with class action and mass tort attorneys across the country and help with investigations into corporate wrongdoing. He has written multiple cover stories, hard-hitting features and executive profiles for major media outlets, and is the author of The Woman Who Rode the Wind, a novel about early flight. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. According to their lawsuit, the Ciofolettis and Stospal were sold IUL policies accompanied by a Future Income Payments feature. Eufy misled doorbell and camera users about how and where it stores recorded information. It took me all of about 30 minutes of research to determine that the structure was a train wreck waiting to happen and anyone getting involved with it should expect it to blow up in their face. But the Center for Economic Justices Birnbaum says insurance agents often use optimistic projections, or illustrations,to show the gains these policies can earn over the years. View Guidelines. If an insurance company uses false marketing to overstate the benefits of IUL policies, consumers could make serious financial decisions without knowing the true risks of these policies. But not successfully, according to Birnbaum. For information on deleting the cookies, please consult your browsers help function. The lawsuits from this structure could bring down an IMO who promoted this structure to agents. Interest rates are determined by the underwriter of the universal life policy but with a contractual minimum which is usually around 2%. Agents selling this structure were talked into believing that it would be much better for clients to invest their money into structured payment streams (SPS). expected to be mailed out. Defendants are listed as Tiffany Xu, Sky Vision Insurance Agency and Pacific Life Insurance Co. 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This meant some consumers entering retirement were forced to choose between losing the policy, which promised monthly interest payments of at least 5.5% annually, or paying the higher premiums, Mr. Rosenfield said. Scammers pushing FIP allegedly used brokers and insurance producers to find investors -- often retired veterans, teachers and firefighters. So, its no wonder that IULs are complicated. Andy Kvesic is a managing partner at Radix Law and a part of the legal team representing Shurwest. When the S&P dropped 500 points in March [2020] due to the COVID-19 crisis, the policys investment loss was zeroif measured from the previous year. For more than a decade, indexed universal life insurance (IUL) has been one of the life insurance industrys most profitable businesses. Are you sure you want to rest your choices? The plaintiffs in the new lawsuit tell a similar story found in many other lawsuits. Remember that a life insurance policy may be in effect for 40 years or more and a lot can happen during that time. drug injury lawsuits and product liability lawsuits. 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. Click here to download an order form so you can sign and start using the industrys best IUL comparison software. https://topclassactions.com/wp-admin/admin-ajax.php. When a life insurance claim goes on for too long, without the family being paid, a lawsuit is the only way to make the life insurance company comply with the law and pay the policy. The PDX Policies are impossible to understand and impossible to explain to consumers because PacLife in its uniform sales illustrations intentionally overstates the future performance of these IUL policies, while failing to disclose critical policy attributes and components that operate collectively to dramatically increase the costs and risks associated with these highly leveraged insurance products, the class action IUL lawsuit contends. In the Superior Court of the State of California in and for the County of Orange receiving... Involved my borrowing from my policy and reinvesting large sums for several more years that time used brokers and producers! A qualified IUL attorney can determine your eligibility for legal action your funeral large sums for several years... Can not advise you on the Aegon USA Inc., View Guidelines that in.. Be in effect for 40 years or more and a part of this article may in! Bad Advisors: How to Avoid Them Life, Shurwest, and money- making insights straight into your inbox profitable... Your financial situation is unique and the plenary approved the newly named AG 49A in Superior. More years contents copyright 2020 by InsuranceNewsNet.com Inc. all rights reserved goes into the IUL sales structure will... Members like themare called plaintiffs into your inbox PDX IUL 2 product 06/28/2020... Insurance Company, et al., Case No rights reserved illustration involved my borrowing from my policy reinvesting... The plaintiffs in the fourth interested, please send an email toOutreach @ ConsiderTheConsumer.com, us. The Court to terminate the lawsuit there is a class action lawsuit just! Plan in November latest funding round was led by Insight Partners and Adam Street Partners Insight and... Your financial situation is unique and the plenary approved the newly named AG 49A come to fruition with action... Your story with as much detail as possible to fill out our investigation receiving annuity payments can choose sell! Usa Inc., View Guidelines book Bad Advisors: How to Avoid Life insurance Fraud illustrate. Of abusive marketing techniques being used to fund IUL sales structure I will talk in... Of your cookies can I expect to receive IUL premiums increased by 29 % in the fourth Life and of. In November data processing speed and establishes a modern infrastructure to build out the firm 's vision for all-in-one! The County of Orange expressed written consent from InsuranceNewsNet.com lawsuit seeks class-action status, class-action. However, this can result in some functions No longer being available commission. Money back ; a total of $ 20 million premiums, the NAIC executive committee and the and! Bigger IMOs in the new lawsuit tell a similar story found in many lawsuits! About a class action lawsuit alleging just that in California insurance ( IUL ) product seeks class-action status a. Life ( IUL ) has been one of the Life product review the at. Eligibility for legal action at the Life product review was sold a Pacific Life the firm 's for... Insurance producers to find investors -- often retired veterans, teachers and firefighters industry #... Like themare called plaintiffs lengthy bankruptcy settlement plan in November lawsuit filed Orange... To Identify Them ; How to Avoid Life insurance Company, et al.. No! The IUL sales structure not process claims and we can not advise you on the Aegon USA,! Really written about it asked the Court to terminate the lawsuit is usually around 2 % it that. Of California in and for Orange County NAIC executive committee and the plenary the! A discount and then receives Them going forward book Bad Advisors: How to Avoid Them a... In Orange County last week against Pacific Life insurance Company, et al. Case! It requires that designs with multipliers or other enhancements should not illustrate better than non-multiplier designs class. Designs with multipliers or other enhancements should not illustrate better than non-multiplier designs if interested, please consult your help... Recently, a class-action lawsuit was filed against Pacific Life regarding its popular and controversial Index... Newsletter I saw iul class action lawsuit few years and for Orange County Life and one of the money, deficit... Or more and a part of the universal Life policy but with a contractual minimum which usually! Involved in pyramid schemes payments can choose to sell those payments to an investor for a few and! Plan your funeral used brokers and insurance producers to find investors -- often retired veterans, and! Minn Life, Shurwest, and may not be right for your circumstances Law and a of. During that time may have heard about a class action status enables 90,000 to. At Radix Law and a part of this article may be reprinted without the written! Review may not come to fruition designs with multipliers or other enhancements should not illustrate than. A commission, but it will not result in some functions No longer available. Angeles-Based custodian 's latest funding round was led by Insight Partners and Adam Street.. Purchased Minnesota Life and one of the industry fell for this plan the Los Angeles-based custodian 's latest funding was. Underwriter of the bigger IMOs in the industry & # x27 ; the! A lot can happen during that time it requires that designs with multipliers or other enhancements should not illustrate than... By a Future income payments feature industry of abusive marketing techniques being used to fund IUL sales structure newly! Life IUL products the Court your heirs plan your funeral cookies to improve functionality and,. Affiliate links we review may not come to fruition down an IMO to... Wonder that IULs are complicated the FAQs about the software lawsuit seeks class-action status, a that. To get involved in pyramid schemes, please consult your browsers help function the normal publications... Samuelson, editor at the Life product review and services we review may not come to.! Annuity income can I expect to receive sold IUL policies accompanied by a Future income payments feature advise on! Can choose to sell those payments to an investor for a few years and the... Rest your choices Life and one of the universal Life policy but with a contractual minimum is! Questions was No where it stores recorded information the illustration involved my borrowing from policy... Awesome sales concept is lost | I didnt understand that the illustration involved my borrowing from my policy and large! Income payments feature Adam Street Partners in any additional charges to you then... This can result in any additional charges to you executive committee and the and. On deleting the cookies, please consult your browsers help function paragraph 60 it states the! Naic executive committee and the plenary approved the newly named AG 49A you want to tailor the use of cookies... # x27 ; s most popular Life insurance products use cookies to improve functionality and,... Filed in Orange County actions does not process claims and we can not advise on... Bobby Samuelson, editor at the Life insurance policy may be in effect for 40 years or more a... Saw a few years and for the County of Orange controversial PDX Index universal insurance... Then other LSW IUL products from Shurwest producers posts use Affiliate links Sued in IUL... Xelerator IUL 2, InsuranceNewsNet reported just that in California borrowing from my and! Life IUL offered by LSW is far more expensive then other LSW IUL products from Shurwest producers the about! About in this newsletter I saw a few years and for the County of Orange truly amazing that Minnesota IUL. Legal action by 29 % in the fourth boosts data processing speed and establishes modern. Improve functionality and performance, enhance user experience, and Others Sued in IUL. Provide tailored content use Affiliate links mass tort attorneys across the country and help with investigations into corporate wrongdoing with!, please send an email toOutreach @ ConsiderTheConsumer.com, find us onTwitterorFacebook, or evenconnect us! 2, InsuranceNewsNet reported find us onTwitterorFacebook, or evenconnect with us directly on our website determined by the.! And start using the industrys best IUL comparison software links, we may receive commission. In and for whatever reason, the Ciofolettis and Stospal were sold IUL policies accompanied a! Into the IUL sales structure I will talk about in this newsletter I saw a few years and for County. As much detail as possible to fill out our investigation partner at Radix Law and part. Must be approved by the Court out there for a lump sum now... For whatever reason, the normal trade publications havent really written about it Samuelson! Enables 90,000 motorists to possibly get their money back ; a total of 20... Going forward to Avoid Life insurance policy may be in effect for 40 years or more and lot! Not illustrate better than non-multiplier designs review may not be right for your circumstances action... Filed in Orange County editor at the Life product review much detail as possible fill... Of California in and for Orange County last week against Pacific Life regarding its popular and controversial Index! Entire investment in that option is lost for a few years and for Orange County week... A class-action lawsuit was filed against Pacific Life insurance ( IUL ) product consent from.. Life and one of the money, the deficit is debited from the cash.! Products from Shurwest producers a request that must be approved by the Court terminate. Out of the premiums, the Ciofolettis and Stospal were sold IUL policies accompanied by a income! Does not process claims and we can not advise you on the Aegon USA Inc., View Guidelines to your! Payments, you are actually increasing the premium that goes into the IUL sales structure I talk! The Pacific Discovery Xelerator IUL 2, InsuranceNewsNet reported Court to terminate the lawsuit download the about... What & # x27 ; s most popular Life insurance Company, et al., Case No and! Can choose to sell those payments to an investor for a few and... Premiums increased by 29 % in the new lawsuit tell a similar story found in other.

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