If you are in the life insurance business and you haven’t heard about the lawsuit that famous race car driver Kyle Busch filed against Pacific Life, you must be living under a rock.

In this lawsuit, the Busch family accused Pacific Life (the insurance carrier), the agent, and everyone associated with the sales transaction (even the carrier’s wholesaler) claiming damages in the range of $8.5 million due to this so-called retirement scam.

So the question is, does this lawsuit have any validity?

On November 3, 2025, Bobby Samuelson – one of our industry’s leaders in product knowledge – published an article on his Life Product Review site that did an outstanding job of articulating what may have happened. When I read this article – along with several others I found online, including the one on MotorSport – I felt a sense of self-imposed responsibility to weigh in on this matter.

I think many people on both sides of the aisle (life insurance sales zealots and IUL haters alike) are quick to jump to conclusions in regard to who is to blame, and if blame is even warranted whatsoever. Without knowing the details of exactly what was communicated to Kyle Busch at the point of sale, I can only comment on what makes certain IUL designs implode, or at the very least, underperform. Hence, I will stay in this lane and only gently speculate on what may have gone wrong in the case of Busch v Pacific Life.

For those people that are speculating the legitimacy of an IUL simply due to a widely publicized lawsuit, all I can say is that just because one specific high-profile client… who worked with one specific agent… who bought one or more specific IULs… who got an undesirable outcome… doesn’t mean that all IULs are bad. That’s like saying, “My friend got married, and it was a terrible marriage, therefore the institution of marriage is bad.” Obviously with any failed marriage, there are multiple factors that may have contributed to its demise.

The first thing I would say to an active (or prospective) client that is now concerned about the legitimacy of their IUL is that the agent who sold Kyle Busch his policies is a convicted criminal who was disciplined by the North Carolina Department Of Insurance for failing to disclose his criminal conviction when applying for his insurance license. I think the conversation needs to start here. This has nothing to do with the product that was sold nor the insurance company who issued the policy.

Of course, like every lawsuit, the nuance is in the details and many details are often conveniently taken out of context. What many people don’t understand is that within any Indexed Universal Life (IUL) insurance policy, there are dozens of design features that can significantly impact the desired outcome (both positively and negatively), depending on what the client’s needs and goals are.

For example, as a self-proclaimed life insurance expert who is a 12-time author – including IUL For Aspiring Know-It-Alls and Premium Financed Life Insurance – The Key To Effective Estate Tax Planning, I only design life IUL policies with a max-funded premium schedule and minimum non-MEC death benefit. This allows the cash value of the policies to grow most efficiently due to the minimization of insurance charges (because of the minimum death benefit design). Even policies that are intended primarily for death benefit and estate planning, I still prefer to use this type of max-funded premium because over time, the more the cash value grows (due to efficiency of minimal insurance charges), the greater the death benefit grows… and in many cases, the death benefit will grow to an even greater amount than if the policy was designed with an initially higher death benefit.

So why is this not more standard practice?

The simple answer is that a lower initial death benefit means a lesser commission paid to the advisor. Despite it being in the best interest of the client (in most cases), this is not common practice in the life insurance space. If the client needs a higher initial death benefit, in my opinion, they should contribute more premium and max-fund the contract. Of course this means the advisor must “sell” the client on paying more, and many advisors are afraid to present a higher out-of-pocket cost to the client for fear they may not buy. However, that’s like selling a client less gasoline for their car despite them needing the drive a longer distance.

In the case of Busch v Pacific Life, it appears that the Busch’s only paid half of the designed premium, which is like expecting a half a tank of gas to last as long as a full tank. In addition, without seeing the actual policy design myself, I can only speculate that even the premium amount as originally designed was not a max-funded premium with a minimum death benefit, which is what made the cash accumulation in the policy even worse. Again, I am merely speculating here, but hopefully you can use this concept I am articulating in analyzing policies you are thinking of selling (if you are an advisor using an IUL for your clients’ retirement plans) or if you are a client thinking of buying an IUL (for the main purpose of retirement planning). In addition, there should always be a very serious discussion about the need, the value, and the validity of the policy’s death benefit, as this really needs to be a significant rationale of why a client should purchase an IUL.

In addition, I have found that the most efficient premium schedule – if trying to maximize retirement income drawdowns from an IUL – is to max-fund and level-fund it for a period of ten years. When you shorten the premium schedule and fund the same cumulative premium as a 10-pay, it increases the death benefit in the early years, which increases the insurance cost. This increased cost creates a harsher drag on the accumulation performance, which typically results in less cash value and less retirement income drawn down from the policy value. Unless there is an unusual circumstance that warrants a shorter premium period, ten years is the sweet spot for this type of design. To my understanding, the Busch policies were funded over the course of five years. Industry standard tells us that the 7-pay design is the most efficient short-pay schedule, however that is when the goal is to maximize death benefit, while still building cash value efficiently. However if the primary goal is cash value accumulation, the 10-pay design is mathematically more efficient.

As far as Pacific Life as a carrier goes, as well as the PDX product, I am a fan. My personal policy is the Pacific Life PDX1, as is my wife’s policy. They are both premium financed. They are both max-funded. They were both designed with a minimum non-MEC death benefit. These Pacific Life products have gotten a lot of heat due to the higher charges, however most people do not understand the multiplier charges/credits proposition. I specifically chose this product back when we purchased our policies because of the multiplier bonus proposition, despite the higher charges that came with this bonus proposition. To be clear, I am an independent advisor and do business with many other carriers, so I have no personal bias towards Pacific Life (or any carrier for that matter). I am an IUL product expert and 100% mathematically-based when analyzing any insurance product. My mathematical findings throughout my deep product analysis has produced quantitative data that indisputably proves that certain IUL products are built more efficiently than others.

This is part of why my backtesting software capabilities are so valuable. If you are not aware of my backtesting software, I essentially created a proxy for the IUL product, then analyzed 121 different historical 40-year rolling periods of the S&P 500. This allows me to test what might have actually happened to the cash value during times of volatility (including poor sequences of returns), hitting caps and floor. My software essentially tests the efficacy of all IUL product chassis including this type of multiplier proposition, and I can tell you that products like the current Pacific Life Horizon 2 IUL with the Performance Multiplier and the National Life Group SummitLife product with the Enhancer Plus Multiplier have both tested extremely well during adverse market times wherein volatility and a poor sequence of returns were prevalent. Other carriers with IUL products that have tested well include (but are not limited to) Allianz, Midland, and Nationwide.

When it comes to charges, any intelligent analyzation must measure the value of the proposition from a charges-to-bonuses ratio perspective, which is what my backtesting software measures. Looking at charges alone (without the upside potential of higher caps, bonuses, etc.) is what amateurs do. What truly matters is net gains and losses, not charges alone. An IUL chassis may have lesser charges with lesser upside potential, and perform worse than an IUL with higher charges and a higher upside potential. For more information, you can watch a webinar of me showcasing this type of modeling by CLICKING HERE. What my ongoing analysis proves is that the Pacific Life PDX products that the Busch couple bought are good products, however it is possible that the agent did not design them optimally for cash value accumulation.

IUL insurance policies require a competent advisor to custom design them. These policy design variables (and using certain design features that are inappropriate for certain clients) can make a great product chassis produce dismal results. In fact I talk exhaustively about these issues in my book that I mentioned earlier - IUL For Aspiring Know-It-Alls which is available on Amazon. Despite Pacific Life (and their products, including PDX1, PDX2, and Horizon 2) being great, it is definitely possible for an advisor to design the custom-build ineffectively, which can absolutely turn a great product chassis into a nightmare. This design variable can destroy any great product chassis from any carrier, not just a Pacific Life. As an analogy, a Ferrari is a remarkable automotive masterpiece, but if a mechanic who does NOT specialize in working on supercars meddles with this sophisticated piece of machinery, they could easily ruin it. The same goes with IULs - you need an expert to properly design it, and unfortunately, there are many so-called advisors selling IULs that are not product design experts.

The last issue I will discuss is dollar cost averaging. I understand the philosophy of why some may prefer that the premium in an IUL use dollar cost averaging, though I do not agree with it personally. The idea of using DCA in an IUL is spreading the risk over twelve 12-month annual point-to-point segments so that in the unlucky event of hitting a 0% return in a given 12-month segment, it could be potentially offset by better returns in the other eleven 12-month segments. In addition, during the first 12-month segment, eleven twelfths (11/12) of the premium was sitting in the carrier’s fixed account earning a fixed return (typically somewhere between 2.25% - 3.50%, depending on the carrier and the timing). The reason I’m not a fan of this methodology is that you are guaranteed to never hit the cap in the first 12-month segment because 11/12 was only earning the paltry fixed return assigned to the fixed account. To me, the risk mitigation of the 0% floor already creates a volatility controlled element in an IUL, so I don’t fear the 0% returns… but perhaps that is because I max-fund the premium with a minimum death benefit design (ahem, uhh… LOL). From what I can tell, it appears that some of the premium in the Busch policies sat in the fixed account instead of being all swept into the index account, which is one of many culprits as to why these policies did not perform from a cash value perspective.

But back to the crux of the Kyle Busch lawsuit – again, without knowing the details – I would say that the chances that all of these factors were clearly articulated to the Busch couple are slim to none. That being said, the Busch family apparently only paid half of the scheduled premium, so there needs to be some accountability placed on them as the client not fulfilling the original plan, even if the original plan was not designed efficiently. Now, should the advisor/agent have had a transparent discussion with them about the potential ramifications of only paying half of the scheduled premium? Of course. But the point is, on this particular issue, there is some shared responsibility on both parties. As a client, you cannot expect a great result when you only pay half of the designed premium.

If you are an advisor or a client that has purchased an IUL as a retirement planning supplement (or if you are a potential client considering doing this), here are the main points I would investigate in order to know if you are in an optimally designed IUL:

1. Is the premium design a max-funded 10-pay?

2. Is the death benefit a minimum non-MEC design?

3. If you are already several years into the policy, have you funded the full max-funded premium amount?

4. Are you aware that taking any withdrawals or policy loans during the time of funding premium can absolutely ruin the financial outcome of an IUL?

5. Is your fully underwritten health rating a Standard Non-Tobacco rating or better?

6. Are you under the age of 60-years old?

   If your answer to any of these six questions is “no,” the IUL may not perform well, and may ultimately lapse far ahead of your wishes… or at the very least, not produce the type of cash value and retirement income you had hoped for. These are design and suitability issues that have nothing to do with the quality of the actual product nor the quality of the issuing carrier.