NLG Lawsuit

Every excessive fee claim here is bogus, 50 state insurance regulators approved the product for sale separately with fee schedule used in the sale Now if they can find a case where a senior took out a reverse mortgage and bought IUL maybe. or some other suitability violation.
 
walthamny said:
Every excessive fee claim here is bogus, 50 state insurance regulators approved the product for sale separately with fee schedule used in the sale Now if they can find a case where a senior took out a reverse mortgage and bought IUL maybe. or some other suitability violation.
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I would highly disagree. So would regulators.

Just because it is approved for sale in the state, does not mean it is suitable to sell to anyone and everyone.

Especially IUL, where the % based fee will vary drastically on what % of GLP the Policy is funded at.

A $100k IUL funded at 20% of GLP for "cash value" would be highly unsuitable and the agent should held accountable for that.

A $100k IUL funded at 100% of GLP for "cash value", would likely be suitable. Assuming Permanent Insurance is suitable in the first place.

I've seen IUL policies sold that absolutely warranted a lawsuit. Consumers lost tens of thousands and will never see significant cash value. This is very common and a huge issue in our industry.

Even with the policy being funded at 100% of GLP, you are still placing a HUGE amount of future risk on the client with IUL.

Internal Fees can usually be increased by 200%-300%. Caps can be reduced to 2% or 3%. It happened with traditional UL, and its already starting to happen now with IUL.
 
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If you remember back to the Prudential and MetLife lawsuits on the UL products back in the 1980s or 1990s whenever that happened, what hung them was enough people had the same story that the agents were referring to it as the same thing as whole life. They replacing whole life policies in many cases and telling people these were new policies that were the same thing but with lower premiums.
Of course, UL is not the same thing as Whole-Life and won’t perform the same way that that whole life will.
They paid out very large settlements over that.
 
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Newby said:
If you remember back to the Prudential and MetLife lawsuits on the UL products back in the 1980s or 1990s whenever that happened, what hung them was enough people had the same story that the agents were referring to it as the same thing as whole life. They replacing whole life policies in many cases and telling people these were new policies that were the same thing but with lower premiums.
Of course, UL is not the same thing as Whole-Life and won’t perform the same way that that whole life will.
They paid out very large settlements over that.
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I hear that a lot these days about IUL. "Its like WL but so much better"

When internal expenses double and return potential is decreased by 80%.... literally any WL would have been better.
 
walthamny said:
Every excessive fee claim here is bogus, 50 state insurance regulators approved the product for sale separately with fee schedule used in the sale Now if they can find a case where a senior took out a reverse mortgage and bought IUL maybe. or some other suitability violation.
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Normally agree with this thought process. But seeing some young parents that make $50k per year spend $5,000 a year on an IUL when they dont have emergency fund nor 401k because the IUL was sold at minimum funding for commissions because it was "tax free, max borrow, pay for nursing home bills, plus, plus, plus", some of these lawsuits are warranted for the sale practices of producers & uplines even if the product design wasnt inherently bad
 
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