Busch vs Pacific Life Lawsuit
IULs are complex products that are often oversimplified in sales pitches. Many agents lack proper training, which leads to unrealistic illustrations and unsuitable recommendations.
Participation rates, caps, floors, fees, and surrender penalties can erode value if misunderstood. Some firms oversell IULs, while others dismiss them entirely, and both extremes misinform consumers. The Busch vs Pacific Life case shows that even high‑profile clients can fall victim to poor design. Trusted financial advice is essential to assess suitability and avoid costly mistakes.
Executive Summary
- Complaint context: Kyle Busch, NASCAR 2‑time champion, and his wife Samantha allege they were sold an Indexed Universal Life (IUL) strategy embedded in irrevocable trust ownership and estate‑planning vehicles.
- Financial impact: The complaint claims total premiums of $10.4 million and a net out‑of‑pocket loss of $8.58 million, driven by misrepresentations and commissions.
- Sales practices: Allegations include big promises, confusing illustrations, and lack of transparency in how the policies were presented and funded.
- Consumer takeaway: This case illustrates how complex strategies can be marketed as simple retirement solutions, leaving buyers exposed to hidden risks.
- Our approach: At M&M Wealth Associates, we focus on what the complaint actually alleges, citing exhibits and filings directly (e.g.: 【Ex. 2】【¶54】), so readers can see the red flags, understand the stakes, and ask sharper questions.
- Next steps: We will update this coverage as defendant responses and additional court filings become publicly available
Why This Matters to You
This is less about whether Indexed Universal Life (IUL) is good or bad, and more about how these products are sold. The Busch vs Pacific Life complaint says Kyle and Samantha Busch relied on insurer‑branded materials, agent assurances, and illustrations that promised a “tax‑free retirement plan” that would sustain itself after a few payments. They allege misleading sales practices and failures of disclosure — issues that can affect everyday buyers, not just celebrities.
Key red flags to watch for include:
- Missing final illustrations: The Busches say they never received the final, signed version before funding.
- Advisor vetting: They claim they were unaware of their agent’s background and felony conviction. Always confirm credentials and expertise before committing.
- Understanding risks: Benefits are real, but every financial vehicle has tradeoffs. Ask about risks as well as rewards before you commit.
At M&M Wealth Associates, we believe cash‑value life insurance — whether whole life or IUL — can be a valuable part of a well‑constructed portfolio when explained clearly, designed around your objectives, and funded correctly. These policies combine permanent protection with tax‑advantaged accumulation, flexibility, and loan/withdrawal options that few other vehicles offer.
If you already own an IUL or whole‑life policy and want a professional second look, we’ll review it at no charge and highlight any structural risks or practical next steps. Schedule a meeting here for your complimentary review.
Parties Involved in This Complaint
- Plaintiffs: Kyle T. Busch and Samantha Busch, individually and as trustees of their respective irrevocable life insurance trusts (ILITs) that own the policies in question【¶9–¶12】【¶53】.
- Defendants: Pacific Life Insurance Company; Rodney A. Smith; Red River LLC (caption; ¶13–¶15).
- Plaintiff counsel listed on the filing: James, McElroy & Diehl, P.A.; RP Legal, LLC (signature block).
- Pacific Life personnel named in complaint/exhibits: Noah Jacobs (Field VP); Tim Breland (Regional VP); Barbara Trost (Product Director). The plaintiffs attach internal carrier emails from these employees and the producer as exhibits【Ex. 2】【Ex. 3】【Ex. 5】【¶33】【¶45–¶49】.
- Producer recipients and advisory team visible in exhibits: The wire‑instruction email (Ex. 1) was addressed to and/or copied to: jhadaya@jhadaya.com (Jonathan Hadaya); cj.figueroa@kylebusch.com (C.J. Figueroa); nancy.knutelsky@kylebusch.com (Nancy Knutelsky); KKlug@mmbcpa.com (Kory Klug); mbeals@dickinsonwright.com (Michael Beals); rowdy1851@me.com (Rodney Smith)【Ex. 1】【¶30】.
- Public profile verification (context only): The email addresses in the exhibits match named individuals whose public professional profiles (LinkedIn / firm pages) show advisory, accounting, or CFO roles consistent with a client advisory team. The complaint does not attach engagement letters or role‑defining documents for those recipients, so we treat public profiles as corroborating context rather than proof of advisory roles【Ex. 1】【¶30】
Timeline and Policies
- 2018 — Plan launch & initial funding. Two IULs issued to ILITs: IUL Policy VF53289970 (Samantha) and IUL Policy VF53260490 (Kyle); initial premiums tied to those 2018 policies【¶53】【¶11–¶12】.
- 2020 — Strategy expanded. Two additional IULs were added (VF53532080; VF53565800) and funding continued under the same strategy【¶53】.
- 2018–2022 — Multi‑year funding. The complaint says the Busches personally funded repeated wire transfers over several years, totaling about $10.4M【¶30】【¶52】【¶55】【¶102】.
- 2022 — Product change / 1035 exchange. An earlier IUL was exchanged into a replacement policy (IUL Policy VF53260490 → IUL Policy VF53840260); No specific date was provided so the carrier emails about product/funding discussions in July 2022 provide some idea of the timeline【¶54】【Ex. 2】. Complaint alleges the replacement consumed $3,131,650 of premium; $664,574 in year‑one charges; $3,579,631 in charges over ten years; and purchased $2,193,800 of projected income【¶68】.
- Dec 2022 — Scheduled final payment submitted【¶100–¶101】.
- Fall 2023 — Premium‑due notice triggers inquiry【¶100–¶101】.
- Oct 14, 2025 — Complaint filed (Lincoln County Superior Court)【signature block】
Busch vs Pacific Life Allegations
- Misrepresented as a “tax‑free retirement plan.” The Busches allege the IULs were marketed as a self‑sustaining, tax‑free retirement solution【¶29–¶31】【¶81–¶86】.
- Changing or incomplete illustrations. They allege they were shown multiple illustrations and did not receive the final, signed illustrations before funding【¶60】【Ex. 1】.
- Directed, multi‑year funding. The complaint states the Busches personally funded repeated wire transfers over several years (totaling about $10.4M) and received agent guidance on funding timing【¶30】【¶52】【¶55】【¶102】.
- Carrier involvement in sales/funding conversations. The Busches allege carrier‑branded materials and Pacific Life personnel participated in planning and funding discussions【¶27–¶33】【¶45–¶49】.
- Unexpected premium notices and claimed losses. They allege an unexpected premium‑due notice in 2023 prompted inquiry and the complaint seeks recovery for alleged losses (roughly $8.5M)【¶100–¶101】【¶102】
Questions the Complaint Raised
After reading the complaint, the Busch vs Pacific Life case raised several important questions for us as professionals in this industry.
- Why was the ILIT put in place when the retirement income was the purpose? ILITs do not allow for the grantor to benefit from the assets within the ILITs. This seems contradictory to the goal of retirement income for Kyle and Samantha. The policies are alleged to be owned by ILITs while the Busches personally funded premiums, which the complaint says conflicts with the retirement‑income story because ILIT ownership typically limits direct access to cash value【¶11–¶12】【¶55–¶56】.
- Did Rodney change the policy from Increasing to Level per his design? The complaint alleges policies were issued with an ‘increasing’ death benefit that should have been converted to ‘level’ in year two, but plaintiffs say the conversion didn’t happen; a fact that would affect target premiums, commissions, and cost of insurance【¶58】.
- What was the purpose of designing a policy to change from Increasing to Level in Year 2? We use this method with the intention of lowering the insurance cost when our clients are ready to take distributions, not during the time when they are still contributing to the policy.
- What was the actual amount funded for each year for the respective policy? The only information is that he funded his policies between 2018-2022. What was/is the Guideline Level premium for their respective policy? What was/is the non-MEC amount for the respective policy?
- How was the 1035 exchange economically justified in 2022? Plaintiffs say the internal 1035 replacement consumed large premium dollars while creating new charges and commissions and delivering no clear economic benefit in the complaint’s view【¶54】【¶66–¶68】. How was this even possible when the funding plan called for a last contribution in 2022?
- Why was the 2023 premium due notice triggered? How was the policy structured to trigger a premium due notice especially when this was a self-funded policy? This notice, of course, triggered this entire complaint for further inquiry【¶100–¶101】.
What We Still Don’t Know
The only documentation that we can view at the moment is the official Complaint file with the Court. There is a number of information that has not been disclosed. Here are a few of those information that we need to provide a better understanding and assessment of this lawsuit:
- Defendant responses. We do not have Pacific Life’s formal statement, Rodney Smith’s response, and any defendant court filings.
- Complete policy records. We do not have the signed policy contracts, rider pages, final signed illustration packages, and any illustration‑acknowledgement pages for all policies, including the replaced policy. This will be key in understanding the allegations.
- Compensation and new‑business files. Commission/override ledgers and carrier new‑business files showing underwriting and compensation decisions.
- Concrete funding proof. A single, signed funding schedule that documents the exact cadence and amounts claimed by plaintiffs.
- Operational mechanics. Actual crediting schedules (caps, participation, multipliers), proof the increasing→level death‑benefit conversion occurred, and any engagement letters or written advice from advisors copied on producer emails.
- Source of funding for the $10.4M. Were these based on Kyle and Samatha’s cashflow? Or were those funds from existing accounts and were just reallocated?
Our Closing Thoughts
At the core of Busch vs Pacific Life is a mismatch between a complex product, optimistic projections, and promises that may never manifest. If the Busches’ allegations are accurate, the issue isn’t a singular breakdown but rather a series of missteps that could have been avoided before culminating in a lawsuit.
All too often, people simply forget the specifics for which they signed up, especially when there are so many moving pieces. Some details of their talks with their agent may not be recounted the same way. We eagerly wait to hear the agent’s version and see carrier records.
Ownership structure matters: putting policies in trusts while you personally fund them can create conflicting outcomes between estate goals and retirement‑income goals. And replacing an old policy with a new one can reset charges and commissions in ways that harm the owner even when the paperwork looks similar.
The Busches are not railing against IULs as a product so much as against how this particular product was structured, disclosed, and sold. Their losses are real, and that deserves empathy, clear answers, and fixes where the process failed. At the same time, signing a contract creates legal and financial obligations. Consumers should not rely on goodwill instead of documented assertions. Clear disclosures, independent review for major commitments, and enforceable standards protect everyone.
For deeper analysis and ongoing updates, read our latest article on the case here: Busch vs Pacific Life.
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Written by Michael Henry and Matthew Wu, MBA — Certified Retirement Counselors and life/health insurance licensed agents. We are not representatives or advisors of Pacific Life or any party in this matter. This article was prepared with assistance from AI.