Pacific Life Insurance Company Misleads Consumers Into Purchasing PDX IUL Policies, Alleges Class Action

Insurance sales representatives at Pacific Life Insurance Company (PacLife) may be deceiving consumers by presenting marketing misrepresentations about their Pacific Discovery Xelerator indexed universal life (PDX IUL) policies. A class action lawsuit filed in the California Superior Court alleges that Pacific Life Insurance Company has created a false marketing scheme to push and sell their PDX IUL policies by using the complicated nature of IUL policies against unknowing consumers.

Consumers consider owning life insurance a vital part of financial wellness — including aging Americans who want to ensure that their loved ones are provided for after they pass away. In the case of a sudden or unexpected death, life insurance can help cover debts and provide income for bereaved family members. When policyholders live to an older age, these policies may help provide retirement income for aging seniors.

Unfortunately, Pacific Life Insurance Company has been accused of taking advantage of the need for this insurance by trapping consumers in ill-performing indexed life insurance policies. If consumers were deceived into taking out a PDX life insurance policy from PacLife through the use of deceptive marketing materials, their legal rights may have been violated.

California Woman Files Lawsuit Over Allegations of PacLife PDX Policies Misrepresentation

In 2020, a California woman took legal action by filing a class action lawsuit against Pacific Life Insurance Company. PacLife misleadingly marketed their PDX life insurance policies in a way that concealed the policies’ risks while overstating their benefits, according to the plaintiff.

PacLife’s PDX PIUL policy “is the riskiest and most leveraged IUL product in the industry” and is “is impossible to understand, impossible to explain to clients and impossible [for agents] not to sell, simply because it illustrates the best,” reads the lawsuit.

Consumers may not know about the intricacies of IUL policies, allowing PacLife to exploit their lack of knowledge. The class action goes as far as to allege that “PacLife structured the PDX Policies in a way that incentivizes its sales agents to heap even more risk on the unwitting policyowners,” offering their own sales agents commissions if they successfully push through a PDX IUL policy sale. 

Consumers may have sought a through Pacific Life Insurance Company in order to protect themselves and their families or to save for retirement. Unfortunately, when faced with poor policy performance or mounting premiums, consumers may have been forced to surrender their policies.

Whose PDX IUL Policies May Have Been Affected?

Some misrepresented policies may include PDX policies issued between February 2017 and early 2019. Attorneys are interested in speaking to policyholders who currently hold or previously held the PDX policies issued between 2017 and 2019 as these policyholders’ legal rights may be affected. 

Policyholders from all states are invited to speak to these legal professionals, though attorneys are especially interested in speaking to Arizona, California, Florida, Illinois, Michigan, Minnesota, and New Jersey consumers.

What Are PDX IUL Policies?

The Pacific Discovery Xelerator policy is Pacific Life Insurance Company’s take on the indexed life insurance policy, according to Investopedia. Pacific Life Insurance Company describes their PDX policies as able to provide lifelong protection and supplemental retirement income through tax-free loans.

Indexed universal life policies are unique forms of life insurance which tie interest rates to a market index such as the S&P 500 or Nasdaq 100. Based on the performance of the chosen market index, which varies depending on the state of the stock market, an IUL policy’s interest rate will increase or decrease.

In February 2019, the insurance company launched a new version of their PDX IUL policy — the Pacific Discovery Xelerator IUL 2, InsuranceNewsNet reported. According to the company’s announcement, these new policies build on the structure of the first PDX policies with an added “Enhanced Performance Factor Rider” that allows policyholders more options for their policies.

Although IUL policies have the potential to have interest rates which vastly exceed those seen with other life insurance policies, there are also risks associated with these accounts. If a market index performs poorly, interest rates will sharply fall — meaning that a consumer may miss out on significant interest gains.

The PacLife IUL Class Action Lawsuit is Hong Li, et al. v. Pacific Life Insurance Company, et al., Case No. 30-2020-01153426-CU-BT-CXC, in the Superior Court of the State of California in and for Orange County.