Lawsuit Against National Life Highlights IUL Misleading Practices

Life
Insurance Lawsuit Consumer Protection Life Insurance Regulation Insurance Marketing
Jan 27, 2026

Sanya Virani, an Indiana resident, has refiled a lawsuit against National Life companies regarding an indexed universal life (IUL) insurance policy she acquired, which resulted in a 0% return. The complaint was initially dismissed by Chief District Judge Christina Reiss for lack of specificity, but she allowed Virani to amend it. Virani's enhanced filing addresses perceived deficiencies in her original claims against the insurer.

Virani purchased the IUL policy while living in Massachusetts on September 8, 2023. This policy, providing coverage of $2,767,336, offered interest crediting options via "Fixed-Term Strategies" and "Indexed Strategies." According to the policyholder's annual statement covering September 22, 2023, to September 21, 2024, opting for the US Pacesetter No Cap Annual Point-to-Point Indexed Strategy led to a 0% credited interest. Such a return is a common baseline in many IUL products but has sparked Virani's allegations of misleading marketing tactics.

Allegations of Misleading Practices

In her updated legal complaint, Virani claims National Life misrepresented the Pacesetter Index by not clarifying its "excess return" foundation compared to the "total return" model, a disclosure clearly made for other indices like the Balanced Trend Index. This omission may mislead consumers to overestimate the index’s performance potential, a critical regulatory compliance issue for insurers like National Life in product marketing and consumer transparency.

Impact of Historical Performance Representation

The lawsuit emphasizes that National Life portrayed the indexed strategies based on a purported 20-year historical performance, despite the indices being relatively new. This has raised concerns about how back-casted models can convey unlikely future outcomes and poses significant risks in insurance industry compliance and accurate carrier communication.

Virani has reportedly invested extensively in policy premiums but argues that surrendering the policy incurs prohibitive costs, notably an initial surrender charge of $49,618.33 that only decreases over time. Despite having acknowledged the non-guaranteed nature of the policy's illustrated elements, her claim criticizes the possible misrepresentation of historical returns in promotional materials.

This lawsuit underscores critical issues of compliance and transparency for insurance providers in structuring and selling indexed insurance products. It highlights the need for clear, truthful communication regarding the performance potential and characteristics of insurance indices to ensure regulatory adherence and consumer protection.