Malecki Law Investigates Variable Universal Life Insurance Policies

The securities and investment fraud attorneys at Malecki Law are interested in hearing from investors who have purchased Variable Universal Life Insurance (VUL) policies.

According to Investopedia, VUL policies combine a death benefit with investment feature.  The investment feature generally includes sub-accounts, as with other variable annuities, that invest in stocks and bonds, or mutual funds that have exposure to stocks and bonds.  While a VUL investment feature may offer an opportunity to gain an increased rate of return by investing in securities, it generally comes with higher management fees and commissions.  As a result, these commissions and fees must be weighed against the risk of loss in the securities purchased.  These risks must be disclosed to the investor prior to investment.

Issues surrounding VUL policies are not new.  A U.S. News and World Report article from 2011 highlighted that these types of policies generally come with higher fees, fewer investment options and sometimes surrender policies.

Investments in VUL policies may be suitable only to certain investors.  If you were promised good returns with safety to your principal over a short investment horizon, yet were not informed of the many risks associated with the securities your money was invested in through the VUL policy, you may have a claim premised on suitability.

While VUL policies may be recommended as a form of insurance and a conservative product, any investment in securities, including stocks and bonds, necessarily carries with it risks of loss of part or all of the investment made.  Therefore, great care should be taken by an advisor to ensure that the investment is appropriate for the investor in light of their specific risk tolerance, investment objectives and other factors.  When a product is sold to an investor, despite being unsuitable for that investor, the financial advisor’s firm may be liable to the investor for those recommendations.

Investors who lost money in VUL policies at the recommendation of their financial advisor may be entitled to recover their losses from the brokerage house who sold it to them.  If you or a family member invested in such a policy, you should contact the attorneys at Malecki Law for a free consultation and to explore your legal rights and options.

Malecki Law takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and fine points makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.