AVONDALE, Ariz. (AP) \u2014 Kyle Busch bought what he thought was a safe life insurance plan that would provide self-funding income for his retirement.<\/p>\n
When Pacific Life Insurance Company sent a sixth premium notice on what was supposed to be a five-year payment plan \u2014 and most of the money he invested was gone \u2014 the two-time NASCAR Cup Series champion knew something was wrong.<\/p>\n
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\u201cI was like, wait a second, what am I getting a sixth-year premium payment for?\u201d Busch said from Phoenix Raceway on Saturday. \u201cWe got on a call with the guy who sold me the premium policies and he ran me around in all these circles, couldn’t answer the questions, so I was like, this is fishy.\u201d<\/p>\n
Once Busch and his wife Samantha realized something was wrong, they turned to an independent firm that found their policy would expire in 16 months and all of the $10.4 million they invested gone.<\/p>\n
Now the Buschs are suing Pacific Life for $8.5 million, alleging the insurance company failed to reveal the true risks of the policies, along with providing false and negligent representations of what was supposed to be tax-free income for retirement.<\/p>\n
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Busch said he was told that if he paid a million dollars for five years, he would be able to take out $800,000 a year once he turned 52. He was instead told his money was going to the insurance company’s account instead of being invested into a market, so his investment never went up as the market rose.<\/p>\n
\u201cThat was a lie,\u201d Busch said on the eve of NASCAR’s season finale. \u201cI looked at it was like, this sounds too good to be true, but you\u2019ve got to believe in those that are looking at it for you.\u201d<\/p>\n
At issue is an Indexed Universal Life insurance policy, a combination of life insurance that provides a death benefit with a cash value component. The cash value growth is tied to a stock market index, supposedly with built-in protections against market downturns.<\/p>\n
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Once Busch realized what had happened to him, his attorney found other people who had invested in IULs and lost all of their money.<\/p>\n
\u201cThese insurance companies are too big to be (messing) with the little people, so we’re going to go at them,\u201d he said. \u201cIt’s not just race car drivers or athletes or rich people of the world and this is why we’re going public with it.\u201d<\/p>\n
The lawsuit also names Pacific Life agent Rodney A. Smith for steering the Buschs into an unsustainable, high-risk product, along with charging an up-front 35% commission they were unaware of.<\/p>\n
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\u201cI was like wow, before my money even went into Pac Life, the guy got 35% commission,\u201d Busch said. \u201cThat was after the fact.\u201d<\/p>\n
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