At ChapmanAlbin, we routinely hear from clients who were sold Indexed Universal Life (IUL) policies as “safe” or “flexible” financial solutions. The reality for many policyholders is very different. Below are real-world case studies that show how these policies can go wrong.
John was told his IUL would provide tax-free retirement income. His broker’s illustration assumed 8% annual returns, projecting a healthy nest egg by age 70.
What happened: Caps and participation rates limited his growth to just 3–4%. By retirement, his insurer demanded sharply higher premiums to keep the policy in force. After paying over $100,000, John faced losing both his coverage and his savings due to his broker’s misrepresentations.
Maria was told, “you can’t lose money—the floor is 0%.”
What happened: Although her credited return was 0%, her policy costs continued to mount. After contributing $600,000 over ten years, her cash value was less than what she paid in. The “you can’t lose” promise turned out to be a costly illusion.
David’s broker encouraged him to “borrow tax-free” against his policy.
What happened: The loans accrued interest while his policy underperformed. Eventually, his IUL lapsed with a loan balance still outstanding, triggering an $80,000 tax bill. David lost both his coverage and his savings, all because the risks were never disclosed.
An elderly couple purchased IULs as part of an estate plan, told the policies would become “self-funding” after seven years.
What happened: Underperformance forced them to pay significant additional premiums. On fixed incomes, they could not keep up. One policy lapsed, the other lost most of its value, leaving their heirs with far less than promised.
Lisa’s illustration projected 8.5% annual returns and $300,000 in cash value by age 65.
What happened: The insurer later lowered caps and increased charges. After ten years, her cash value was less than half of what was promised, and steep surrender penalties trapped her in the policy. Lisa was the victim of a classic “bait-and-switch” sales tactic.
If you or someone you know purchased an Indexed Universal Life policy that failed to perform as promised, you are not alone. Many policyholders were misled by unrealistic illustrations, withheld risks, and unsuitable recommendations.
ChapmanAlbin represents investors and policyholders nationwide in recovering losses from unsuitable or fraudulent IUL sales.
Contact us today for a free, confidential consultation to learn if your IUL losses are recoverable.
Step 1.
Talk to an Experienced Attorney Today
Call and speak to one of our attorneys* for a no-cost consultation to discuss your situation, answer your questions, and help you determine the next steps. This call usually takes about 15 minutes, but we are happy to talk to you as long as you would like!
Step 2.
Quick Review of Your Paperwork
If we think you might have a case, we will need to review a few basic documents. If we determine you have a case, then you will have the option to hire us as your attorneys to pursue it.
Step 3.
Signed Attorney/Client Agreement
If you decide to hire us to pursue your case, we will have you sign an attorney-client agreement so we can begin the process of trying to recover your losses.*
*In the vast majority of cases, our agreement is contingent – meaning you won’t owe us any money unless we recover money for you.
