High-profile cases can expose risks in our business that, unfortunately, we see more often than one might expect. The lawsuit filed by NASCAR champion Kyle Busch and his wife, Samantha, against Pacific Life and an associated agent offers several important lessons for professionals who advise affluent families where life insurance plays a meaningful role in the overall financial plan.
This case serves as a reminder that placing significant insurance portfolios requires collaboration among advisors, thoughtful plan design, and a commitment to ongoing policy management.
A few quotes from a few of my favorite people in the life insurance industry as we get into this case:
Tom Love:
“Life insurance policies aren’t inherently good or bad; they don’t have souls. How we design the insurance portfolio is what gives them life.”
Bobby Samuelson:
“I’d rather have a well-designed insurance policy from a low-rated life insurer than a poorly designed insurance policy from a highly rated insurer.”
George Groome:
“Delivering the policy to the client is not the end game; it is just the beginning.”
My colleague Bill Boersma wrote the November 2025 article for Wealth Management magazine, which you can read here.
Case Overview: What Happened
In October 2025, the Busches filed suit alleging that a series of complex Indexed Universal Life (IUL) policies were misrepresented as effective vehicles for generating safe, tax-advantaged retirement income. Between 2018 and 2022, the couple paid over $10.4 million in premiums into multiple policies.
According to the complaint, the policies underperformed relative to illustrated expectations, resulting in net losses exceeding $8.5 million. The suit alleges negligent misrepresentation, breach of fiduciary duty, and violations of North Carolina’s Unfair and Deceptive Trade Practices Act.
Pacific Life disputes the allegations and maintains confidence in its products.
My Take: Depending on how they are sold, Indexed Universal Life (IUL) policies can be complex products that our industry has yet to fully figure out how to regulate. The industry initially attempted regulation with Actuarial Guideline 49 (AG 49) in 2015 and later introduced AG 49-A and 49-B to close loopholes and further restrict how bonuses, multipliers, complex loans, and proprietary indices can be illustrated. Even with AG 49, 49-A, and 49-B, an outcome like this can still occur.
As I write this article, it is important for the reader to understand that our belief in Pacific Life as an insurer continues despite this case, and in limited situations, we have and will continue to place Indexed Universal Life insurance policies.
Lessons for Advisors – For All Policy Types; Not Just IUL
1. Illustrations Are Only Projections
It is important to understand which elements of the policy are guaranteed and which are not. For the non-guaranteed aspects of the policy, are the assumptions reasonable? For high-net-worth clients, where premium commitments are large and opportunity cost is meaningful, advisors should stress-test assumptions.
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What happens if policy earnings are less than illustrated?
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What is the worst-case scenario?
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How sensitive is policy performance to funding deviations?
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Who is responsible for ongoing policy monitoring and, if needed, course correction?
If the insurance advisor can’t explain what he or she is recommending in simple terms, your antennas should go up.
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2. Collaboration Among Advisors
The best client outcomes occur when at least one other professional (attorney, CPA, investment advisor) is working alongside the insurance advisor on the client’s behalf. Many affluent families don’t want to get in the weeds of insurance planning and trust their professional teams to make prudent recommendations.
The Busch case highlights the importance of:
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Clear understanding of the policy’s non-guaranteed elements
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Alignment between the insurance strategy and overall planning objectives
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Documentation of decisions and the planning process
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3. Ongoing Policy Management
As my father says, delivering the policy to the client is not the end game; it is just the beginning. Life changes, the ability to fund premiums changes, family dynamics change, estate planning objectives change, business conditions change, and non-guaranteed elements of the life insurance policy may change. Permanent life insurance requires active management, particularly when used inside irrevocable trusts or as part of long-term wealth transfer strategies.
Early intervention can often preserve optionality for the client. Most life insurance policies are flexible and can be adapted over time to meet some of the client’s changing needs. The only way to keep the plan on course is to meet with the client and their advisory team on a periodic basis.
Ongoing policy management is something I’ve built my professional 22+ year career around. My book, The Best Policy; Managing Irrevocable Life Insurance Trusts – Getting to the Heart of the Matter, addresses professional oversight of dynamic life insurance portfolios.
Here is what gets me: With a client as significant as Kyle Busch, and with today’s regulatory environment, it’s hard to imagine how this could still happen. Where were his advisors during the purchase of these policies? How did an agent get this close to him without his advisory team being involved in a transaction of this magnitude? The Kyle Busch vs. Pacific Life case reinforces the importance of transparency in everything we do and the critical role of collaboration among advisors.
Sources:
AllAboutLawyer, “Kyle Busch Lawsuit. NASCAR Star Sues Pacific Life Over Alleged $8.5 Million Life Insurance Scheme,” October 2025, https://allaboutlawyer.com/kyle-busch-lawsuit-nascar-star-suing-pacific-life-over-8-5m-life-insurance-scheme/.
Bill Boersma, “What the Kyle Busch Case Reveals About IUL Policies,” Wealth Management, November 2025, https://www.wealthmanagement.com/insurance/what-the-kyle-busch-case-reveals-about-iul-policies.
WCNC Charlotte, “Kyle Busch Sues Insurance Company Alleging Deceptive Retirement Scheme,” October 2025, https://www.wcnc.com/article/news/local/kyle-busch-sues-insurance-company-retirement-scheme/275-e1294987-751d-416f-b2c5-9f1b045cc0e9.
Insurance Business Magazine, “NASCAR’s Kyle Busch Sues Insurer for $8.5 Million Over Alleged Deceptive Practices,” October 2025, https://www.insurancebusinessmag.com/us/news/life-insurance/nascars-kyle-busch-sues-insurer-for-8-5million-over-alleged-deceptive-practices-555133.aspx.
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