Kyle and Samantha Busch’s lawsuit against Pacific Life Insurance Company, filed in October 2025 in the U.S. District Court for the Western District of North Carolina, alleged the couple lost more than $8.5 million on five indexed universal life insurance policies that had been marketed to them as safe, tax-free retirement vehicles. The Busches said they paid $10.4 million in premiums based on false promises of guaranteed returns and later learned at least one policy was on track to become worthless. The case settled confidentially in February 2026, about three months before Kyle Busch died of pneumonia complications at age 41.1Insurance Journal. Kyle Busch Pacific Life Settle Insurance Lawsuit
What the Busches Bought
Between 2018 and 2022, the couple purchased five indexed universal life policies from Pacific Life through agent Rodney A. Smith, who worked through a firm called Red River LLC. Two policies were issued in 2018, insuring Kyle for $28.3 million and Samantha for over $6.7 million. Kyle added two more in 2020 with death benefits of $44.5 million and $17.5 million, and in 2022 he replaced the original 2018 policy with a newer Pacific Life product.2Life Product Review. Busch v Pacific Life
According to the complaint, the Busches were told that paying $1 million a year for five years would let Kyle withdraw roughly $800,000 annually starting at age 52, all tax-free.3Insurance Business Magazine. NASCARs Kyle Busch Sues Insurer for $8.5 Million Over Alleged Deceptive Practices The policies were pitched as “safe and secure” and as “self-funding retirement vehicles,” using illustrations the couple later said obscured the true risks and costs.4Jayski. Kyle and Samantha Busch File Suit Against Life Insurance Company
How the Busches Say They Discovered the Problem
The Busches said they realized something was wrong when they received a sixth premium bill on what they understood to be a five-year payment plan, and then learned that at least one policy was projected to expire within 16 months, which would wipe out their entire investment. The complaint alleged Smith had steered them into these products to collect an undisclosed 35% up-front commission.3Insurance Business Magazine. NASCARs Kyle Busch Sues Insurer for $8.5 Million Over Alleged Deceptive Practices
The lawsuit also alleged that Smith had a regulatory history the couple was never told about. The North Carolina Department of Insurance had previously disciplined him for providing false and misleading information on his license application and failing to disclose a criminal conviction, and the Busches said Pacific Life let him sell complex financial products anyway.5Yahoo Finance. Kyle Busch Sues Insurance Firm The suit named Pacific Life, Smith, and Red River LLC as defendants and asserted claims for fraud, negligent misrepresentation, breach of fiduciary duty, and violations of North Carolina’s Unfair and Deceptive Trade Practices Act.6ESPN. Kyle Busch Settles $8.5M Lawsuit With Pacific Life Insurance
The Amended Complaint Widened the Blame
An amended complaint filed in January 2026 by RP Legal LLC attorneys Robert Rikard and Peter Protopapas shifted the case from what they described as agent-only misconduct to a claim that Pacific Life’s own employees helped structure the problematic policies. The amended filing named a field vice president, a regional vice president, and a product director who allegedly helped design the policies to maximize first-year commissions.7Investor Loss Center. Amended Busch Complaint
The complaint focused heavily on a 2022 transaction in which the Busches’ original 2018 policy was replaced through an internal 1035 exchange, a mechanism for transferring value from one insurance policy into another. The plaintiffs alleged this reset commissions for the carrier while embedding prior losses into the replacement policy. They pointed to specific design choices they characterized as commission-driven: selecting an increasing death benefit to inflate the commissionable premium, using 100% basic coverage rather than cheaper renewable term coverage, and applying a “100% Commission Adjustment Factor” to the replacement policy. Nearly $3 million was rolled into the new policy over two years, the complaint said, but its cash surrender value dropped quickly because of front-loaded charges.7Investor Loss Center. Amended Busch Complaint
Pacific Life’s Defense
On January 22, 2026, Pacific Life moved to dismiss. The company argued the Busches had signed documents acknowledging the policy terms, including the requirement to keep paying premiums and hold the policies for more than 30 years, and pointed to cover letters in bold capitalized text telling owners to “READ YOUR POLICY CAREFULLY” and offering a 20-day cancellation window.8WSLS. Pacific Life Seeks to Dismiss Kyle Buschs $8.5M Lawsuit Over Insurance Policies
Pacific Life also raised a statute of limitations defense, noting that claims about the 2018 policies were filed seven years after purchase, past North Carolina’s three-year window. The company said its illustrations disclosed the charges and that any oral promises the Busches described were contradicted by written disclosures they signed. Pacific Life further argued that the couple had their own team of financial and legal advisors responsible for making sure the policies fit their goals, and blamed the losses on the Busches’ own conduct, including missed premiums, failure to monitor how funds were allocated between indexed and fixed accounts, and surrendering or lapsing policies before they could benefit from long-term growth.9Retirement Income Journal. Pacific Lifes Motion to Dismiss the Buschs Suit Excerpts
The Confidential Settlement
The court never ruled on the motion to dismiss. On February 26, 2026, the parties filed a joint notice of settlement, indicating a confidential agreement had been reached.10Insurance Business Magazine. Kyle Buschs Insurance Fight Ends Quietly but IUL Scrutiny Grows Financial terms were not disclosed. Each side would bear its own legal fees and costs, and the parties said they would file a formal dismissal within 30 days.1Insurance Journal. Kyle Busch Pacific Life Settle Insurance Lawsuit A Pacific Life spokesperson called the resolution “amicable” and “mutually acceptable,” saying both sides “worked constructively to achieve a confidential result.”11ThinkAdvisor. NASCAR Champ Kyle Busch, Pacific Life Settle IUL Lawsuit Smith and Red River LLC had denied most of the charges before the settlement.
How the Case Fit With Other Pacific Life IUL Litigation
The Busch case was not Pacific Life’s only IUL dispute. In February 2026, the company agreed to a $58 million settlement in a separate California class action, Mamboleo v. Pacific Life Insurance Co., over its “Pacific Discovery Xelerator” policies sold in California between roughly 2016 and 2019. That case alleged the company used misleading illustrations to inflate projected profitability while masking hidden costs. The class settlement included a $33 million fund for current policyholders and up to $25 million in term life coverage for former policyholders, with final approval scheduled for May 2026.12Insurance News Net. Pacific Life Agrees to a $58M Settlement in California PDX Class Action The Mamboleo settlement is a separate proceeding and does not resolve claims from Busch-style policies sold outside California.
The Busches’ attorneys said they were investigating other policyholders sold similar structures by Smith, describing the patterns as potentially systemic.13Investor Loss Center. Rodney Smith Pacific Life IUL Investigation
Kyle Busch’s Death After the Settlement
On May 21, 2026, less than three months after the settlement was announced, Kyle Busch died at age 41 from severe pneumonia that progressed into sepsis.14NASCAR. Kyle Busch, Two-Time NASCAR Cup Series Champion, Dies at Age 41 He is survived by his wife Samantha and their two children, Brexton and Lennix. Because the settlement was confidential, its terms are not part of the public record, and Pacific Life has not indicated any change to the agreement in the wake of his death.