2025 Top 5 Life Insurance Stories: IUL takes center stage as lawsuits pile up

It was a good year for life insurance sales. But problems with indexed universal life overshadowed some of that good news.

IUL comes with a death benefit and a cash value that grows based on a stock market index, but isn't directly invested in it. A portion of the premium pays for insurance costs and fees, while the rest earns interest, usually with a guaranteed minimum and a maximum return.

IUL can be difficult for consumers and agents to understand, leaving the potential for bad sales much greater. New annualized premium for individual life insurance rose 16% year over year in Q3, reaching $4.3 billion, according to LIMRA.

But the ongoing controversy around IUL filled the list of our most-read stories of 2025:

Big sales, big problems with IUL

This September 2024 story gained new audiences after fresh IUL controversies. It gives a soup-to-nuts explanation of the product and its many positives and negatives.

One thing that nobody will argue is that IUL sells — and sells big. While other types of life insurance products lag with low single-digit growth or negative sales numbers, IUL face amount keeps increasing.

“Many clients appreciate that an indexed universal life insurance policy offers a zero-floor guarantee,” said Raza Begg, an executive director at Experior Financial Group in Cheektowaga, N.Y. “This guarantee means that the policy is guaranteed never to lose or incur losses based on a stock market index, providing a level of safety that attracts risk-averse investors.”

Versatility and powerful sales ensure that IUL is not going away in the near term. But is change needed to help indexed universal life insurance evolve into a more responsible life insurance product? Many insurance professionals say yes and point to illustrations, participation rates, and consumer education as areas that are lacking.

IUL critics have “some valid points,” Begg conceded, noting that an IUL policy is a fairly new product to many policyholders.

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A-Cap suspends Sentinel Security Life

Sentinel Security Life Insurance Co. suspended writing new business early in 2025 until a judge could hear its appeal of a Utah order.

Utah regulators claimed the insurer was in poor shape financially and was using new premium to meet ongoing financial obligations as they come due. The Utah Insurance Department order barred Sentinel Security Life Insurance Co. from writing new business after Dec. 31, 2024.

The order covered two associated reinsurance companies: Haymarket Insurance Co. and Jazz Reinsurance Co. The three companies share the same Salt Lake City address and are owned by Advantage Capital Partners, known as A-Cap.

Utah withdrew its rehabilitation petition in May, dismissing the case, as the parties agreed to resolve issues through mediation rather than court action.

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Kyle Busch Case: A day of reckoning for IUL?

This November story delved into the Kyle Busch vs Pacific Life lawsuit and its potential impact on the IUL industry.

Filed in Lincoln County, N.C. state court, where the Busches live, the complaint accuses Pacific Life Insurance Co. and its appointed agent of designing and promoting a series of complex IUL policies as "tax-free retirement plans" that were misrepresented as safe, self-funding investment vehicles.

According to the filing, the defendants used misleading illustrations, undisclosed costs, and false promises of guaranteed multipliers and controllable charges to induce the Busches to pay more than $10.4 million in premiums, resulting in net out-of-pocket losses exceeding $8.58 million.

A PacLife spokesman said the company has been in touch with the Busches and their attorney. The case remains active.

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SC judge rules Atlantic Coast can stay in business

South Carolina Judge Ralph King Anderson III reversed a state Department of Insurance order that had banned Atlantic Coast Life Insurance Co. from writing new premiums.

In his February decision, Anderson rejected the department’s conclusion that Atlantic Coast was in financial distress.

“The evidence shows that ACL maintains a positive cash flow and has not experienced any difficulty paying amounts owed to either its policyholders or creditors,” he wrote.

Atlantic Coast is owned by Advantage Capital Partners, known as A-Cap. Claiming the insurer's underlying financial condition is poor, South Carolina regulators had banned Atlantic Coast from writing new life policies after Dec. 31, 2024.

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Lawsuit accuses National Life of misleading IUL sale

This November 2024 story about an Indiana woman suing National Life over her IUL attracted plenty of readers throughout 2025.

Sanya Virani claims the IUL relies on back-tested historical performance that does not match reality and is “a fraudulent sham.” Virani is locked into a product that is not performing as promised and comes with costly surrender fees if she were to terminate the policy, the complaint states.

Virani filed the lawsuit in the U.S. District Court for the District of Vermont, where NLV is headquartered. The lawsuit remains active.

Also listed as defendants are National Life Insurance Co. and Life Insurance Co. of the Southwest. The complaint is just the latest in a series of lawsuits nationwide by dissatisfied IUL policyholders who claim they were misled by rosy illustrations.

A spokeswoman for National Life released this statement after the lawsuit was filed: “We strongly dispute the plaintiff’s allegations, and we intend to vigorously contest them.”

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.