November 21, 2025

Kyle Busch IUL lawsuit moved to federal court at PacLife’s request

A lawsuit by NASCAR star Kyle Busch against Pacific Life and an advisor over a poorly performing indexed universal life insurance policy moved to federal court Thursday.

Busch and his wife, Samantha, filed the lawsuit 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.

PacLife petitioned to move the case to federal court, noting that the insurer is organized in Nebraska, with a principal place of business in California. In addition, the advisor/defendant, Rodney A. Smith, is a resident of Arizona, and his business, Red River LLC, is organized in Nevada.

“The parties are therefore citizens of different states, and complete diversity of citizenship exists in this case,” the PacLife motion reads./

Robert Rikard, an attorney for the Busches, did not reply to an email seeking comment.

A PacLife spokesman has said the company has been in touch with the Busches. The insurer added: “We stand by all our life insurance products, including Indexed Universal Life (IUL). An IUL policy provides valuable life insurance protection, helping ensure that families and other beneficiaries receive financial protection in the event of an unexpected or premature death of a loved one. IUL also offers the opportunity to build cash value over time, which may be accessed for a variety of purposes, including supplementing retirement income.

It is important that individuals work with their financial professionals to help ensure their intended insurance needs and financial objectives are met.”

Busch: We were blindsided

Kyle Busch explained that he was assured that by contributing a million dollars annually for five years, he could withdraw $800,000 per year starting at age 52. Instead, he discovered his funds were being directed to the insurance company’s account rather than being invested in the market, preventing his investment from growing as markets rose.

“I never thought something like this could happen to us,” Kyle Busch said. “These policies were sold to us as part of a retirement plan, something safe and secure that would grow tax-free and protect our family long after racing. We trusted the people who sold them and the name Pacific Life. But the reality is far different. What was pitched as retirement income turned out to be a financial trap.”