Pacific Life insurance company has asked a federal court to dismiss the $8.5 million lawsuit filed by NASCAR champion Kyle Busch and his wife. The couple alleges that the insurance policies were sold to them under false and negligent representations about tax-free income for retirement. The presentation, held in the Western District of North Carolina, argues that the Busches purchased five indexed universal life (IUL) policies between 2018 and 2022. These policies sought to provide more than $90 million in insurance protection for the two-time NASCAR champion. IUL policies were designed to offer immediate death benefit protection and “the opportunity to accumulate long-term cash values”. Pacific Life claims that Busch did not fully fund the policies, some expired and others were canceled. Busch, for his part, claims a loss of $10.4 million and filed the lawsuit in October, alleging that Pacific Life did not disclose the true risks of the policies. In its motion to dismiss, Pacific Life argued that both Busches signed multiple documents acknowledging that they understood the policies, including one that indicated the couple would pay the planned premiums and maintain the policies for more than 30 years, until age 70 or older.
An IUL is a combined life insurance policy that offers a death benefit with a cash value component. The growth of the cash value is linked to a stock market index, supposedly with built-in protections against market downturns. When filing the lawsuit last year, Busch stated that he had been told that if he paid $1 million over five years, he could withdraw $800,000 a year once he turned 52. Busch claims that upon receiving a sixth premium notice, he began asking questions and discovered that almost all of his money had been lost. Pacific Life has responded that the Busches acknowledged understanding the policies, but also that their claims for breach of fiduciary duty and negligent misrepresentation are brought seven years after they began purchasing the policies and, therefore, are time-barred by the three-year statute of limitations.“Instead of keeping the policies long enough to capitalize on their growth potential, the plaintiffs failed to pay the planned premiums on time, failed to monitor the allocation of their policy values between indexed and fixed accounts, and canceled the policies or allowed them to lapse. Instead of taking responsibility for their own decisions, the plaintiffs are now trying to blame the IUL product for their negative outcome,” Pacific Life wrote in the filing.
Pacific Life
Pacific Life also maintains that all of the Busches’ misrepresentation claims are false due to the “express and repeated disclosures” they signed. In addition, the five policies come with a cover letter that in bold capital letters says “READ YOUR POLICY CAREFULLY” and offered a 20-day cancellation window in which premiums would be refunded. Both Busches signed a form certifying that they had received the policies and understood that they should review them carefully, according to Pacific Life. The Busches also named agent Rodney A. Smith in their lawsuit for guiding the Busches toward an unsustainable and high-risk product, along with charging an initial 35% commission that they were unaware of.“A plaintiff cannot avoid the statute of limitations by remaining ‘willfully blind’: A man should not be permitted to close his eyes to facts readily observable by ordinary attention, and keep for his own advantage the position of ignorance,” Pacific Life wrote. “Such a principle would allow a careless man, and by reason of his carelessness, to extend his right to recover for an indefinite period of time.”
Pacific Life
