Kyle Busch and his wife Samantha reached a confidential settlement with Pacific Life Insurance Company in late February 2026, ending a lawsuit in which the couple alleged they lost more than $8.5 million on indexed universal life insurance policies that had been sold to them as safe retirement plans. The Kyle Busch Pacific Life settlement, filed on February 26, 2026, in the U.S. District Court for the Western District of North Carolina, also resolved claims against the selling agent, Rodney Smith, and his firm, Red River LLC. The financial terms were not disclosed.
What the Busches Bought
Beginning in 2018, the Busches purchased multiple indexed universal life policies from Pacific Life through Rodney Smith, an Arizona-based agent operating under Red River LLC. Smith presented himself as a wealth management and retirement planning specialist. The products at issue were Pacific Life’s Pacific Discovery Xelerator and PDX 2 policies, which tie a cash-value component to stock market indexes like the S&P 500 while providing a death benefit.
According to the couple’s amended complaint, Smith told them the policies would be fully funded and self-sustaining after a limited number of premium payments and would generate substantial, tax-free retirement income. Samantha Busch purchased PDX policies in 2018. Kyle bought PDX policies that year and additional PDX 2 policies in 2020, one carrying a $44.5 million death benefit. The couple was told they could withdraw roughly $800,000 per year starting at age 52.
Over about five years, the Busches paid approximately $10.4 million in premiums. An independent review later indicated that, following the initial payment schedule, one of the policies was projected to lapse in just 16 months. The couple said they first grew suspicious when they received a sixth premium notice despite being told only five years of payments would be required.
What the Lawsuit Alleged
Kyle and Samantha Busch filed suit on October 14, 2025, naming Pacific Life, Smith, and Red River LLC as defendants. They claimed net out-of-pocket losses exceeding $8.58 million and sought additional punitive and treble damages under North Carolina’s Unfair and Deceptive Trade Practices Act.
The amended complaint, filed January 13, 2026, laid out several strands of alleged misconduct. Sales illustrations, the couple said, used unrealistic return projections and concealed internal costs. The policies were allegedly designed with high death benefits and 100% “basic coverage” to maximize the agent’s upfront commission rather than to benefit the policyholders; the complaint cited estimates that charges consumed roughly 88% of premiums paid over the first ten years in similar designs.
The complaint also reached inside Pacific Life. It named three employees who allegedly coached Smith’s sales efforts: field vice president Noah Jacobs, regional vice president Tim Breland, and product director Barbara Trost. Internal emails attached as exhibits allegedly showed those employees providing guidance on policy design and funding urgency.
On Smith himself, the complaint noted a prior disciplinary record with the North Carolina Department of Insurance for providing false information on his license application, including failing to disclose a criminal conviction. The formal claims included negligence, negligent misrepresentation, breach of fiduciary duty, violations of North Carolina’s unfair trade practices statute, and vicarious liability against Pacific Life for its training and oversight of Smith.
How Pacific Life Defended the Case
Pacific Life filed a motion to dismiss on January 22, 2026, calling the complaint “inflammatory and disingenuous.” Its defense, led by Carlton Fields and Parker Poe Adams & Bernstein, argued that the Busches had signed documents explicitly acknowledging that illustrated values were “not guaranteed” and that premiums could be required for 30 or more years. The insurer said the couple had their own team of financial and legal advisors, including a CPA and corporate attorneys, and had agreed in writing that their producer was responsible for ensuring the policies met their objectives.
Pacific Life also argued the case was untimely. The three-year clock for negligence claims on the 2018 policies would have run in 2021, and on the 2020 policies in 2023, well before the October 2025 filing.
The company pointed to a 2022 federal decision in South Carolina, affirmed by the Fourth Circuit in 2024, that rejected similar claims against the same PDX product. That court found that “conspicuous and repeated disclaimers” in the policy illustrations precluded a finding of justifiable reliance as a matter of law. Smith and Red River LLC were represented separately and filed their own response denying most of the allegations.
How the Case Ended
The court never ruled on the motion to dismiss. A joint notice of settlement was filed on February 26, 2026, stating that the parties had resolved the dispute and intended to file for dismissal within 30 days. All parties were included: the Busches, Pacific Life, Smith, and Red River LLC.
The financial terms are confidential. The filing specified that each side would bear its own attorneys’ fees and costs. Pacific Life said in a statement, “Both sides worked constructively to achieve a confidential result that is mutually acceptable and avoids further legal proceedings.” No reporting has disclosed or estimated the settlement amount. The Busches’ attorneys at RP Legal LLC, based in Columbia, South Carolina, did not comment publicly on the outcome.
A Wider Wave of IUL Lawsuits
The Busch case sat inside a growing docket of litigation over indexed universal life products, and Pacific Life’s PDX line in particular. Plaintiffs across these cases have raised the same core complaint: sales illustrations that made the policies look like reliable retirement vehicles when, they allege, the policies were structured to benefit agents and the insurer at policyholders’ expense.
The largest parallel case is a California class action, Mamboleo v. Pacific Life Insurance Company, filed in June 2021 in Orange County Superior Court. Pacific Life agreed to a $58 million settlement covering people who purchased PDX policies in California between 2016 and 2019. The deal, pending final court approval as of early 2026, allocates $33 million in credits to current policyholders and up to $25 million in term life insurance coverage for those whose policies lapsed or were surrendered.
RP Legal, the firm that represented the Busches, had taken Pacific Life to trial before. In May 2024, a jury awarded $1,526,156.54 to another PDX policyholder, Karen Shelstad. Attorney Robert Rikard said after the verdict that “the jury delivered a loud and clear message that what Pacific Life did to Karen was wrong.” The firm says it has represented more than 400 clients in IUL-related cases since 2018 and recovered over $70 million for policyholders.
In February 2026, another lawsuit was filed in South Carolina. Geib v. Pacific Life alleges that a retired couple was induced to liquidate $1.5 million from their 401(k) accounts to fund an IUL policy marketed as “Retirement Approach No Tax,” and that Pacific Life investigated and terminated the selling agents in 2019 for misconduct but never told the policyholders. Agent compensation structures that can pay commissions of 90% to 140% of first-year premiums continue to create what plaintiffs’ attorneys describe as a built-in incentive to push unsuitable products.
Kyle Busch’s Death Weeks After the Settlement
Kyle Busch died on May 21, 2026, less than three months after the settlement was filed. He was 41. His family said severe pneumonia had progressed into sepsis, causing what they described as “rapid and overwhelming associated complications.” A death certificate later indicated he had bacterial pneumonia for “days to weeks,” which led to sepsis, disseminated intravascular coagulation, and hemorrhagic shock. He is survived by Samantha and their two children, Brexton and Lennix.