A family of funeral parlor operators in Montana has sued Mass Mutual, one of its former brokers, and affiliated companies for allegedly selling them $67.5 million worth of premium-financed life insurance policies that ultimately cost them $8 million more than the policies' face value in premium loans and interest, according to the complaint.

The lawsuit, filed last week in U.S. District Court for the Missoula Division of the District of Montana, claims that, in early 2014, Joshoa Gardner, then a registered insurance agent of both Mass Mutual and Penn Mutual (a company also named in the suit), persuaded Todd Stevenson of Miles City, Mont., to purchase premium-financed life insurance policies, misrepresenting them as “responsible, safe, and tax-friendly estate planning tools,” according to the lawsuit. Gardner then recommended that three other members of the Stevenson family create irrevocable trusts to purchase more of these life insurance policies, the lawsuit claims.

Premium-financed life insurance policies are considered a risky strategy, the suit alleges, one that might be appropriate for high-net-worth clients who don’t want to liquidate assets to pay the premiums on very large life insurance policies. They require policyholders to borrow money from a third-party lender to pay the premiums. The lawsuit says the policies were not appropriate for the Stevensons, who are described as “conservative, investment risk-averse, financially unsophisticated morticians.”

The suit estimates that the Stevenson family’s total outlay for these policies and the debt service on the loans used to pay the premiums "outpaced the valuation of the products by roughly $8 million."

According to the suit, the third-party lender that Gardner had the Stevensons use to pay the premiums was a firm called Burgess, with which Gardner was allegedly associated. No further details about the lending firm were cited.

According to the Financial Industry Regulatory Authority’s BrokerCheck page, Gardner is no longer a registered broker. Between 2013 and 2015, his most recent job in the database, he was with MML Investors Services, a broker-dealer and wealth-management unit of Mass Mutual. Before that, he was with New York Life but resigned in 2013 with an outstanding debt to the company of more than $33,000 for commissions paid for policies that were no longer in force, according to BrokerCheck.

He also represented himself as a licensed representative of Penn Insurance and Annuity Co., and owner of two financial services firms, at different times—called Summit and Capital, respectively. These are not reflected in the BrokenCheck record. “Gardner, Summit, Capital and/or Burgess acted at all relevant times as agents of the insurance entity defendants,” the lawsuit says.

Gardner and the firms he was allegedly associated with are all accused of failing to determine whether these life insurance products were appropriate for the various members of the Stevenson family who purchased the products, and ignoring their risk-averse goals.

“The success of the premium-financed life insurance scheme depends on the costs on the premium loans over the long term being less than the returns on the insurance policies,” the lawsuit states. “Otherwise, the policyholder will be forced to come up with the significant capital necessary to pay back the premium loans, interest, and fees.”

As interest rates have risen, the lawsuit says, depressed returns on the Stevensons’ cash investment could not keep up with premium loans, interest and service fees. As a result, the suit alleges, the Stevensons were left owing some $8 million more than the policies’ face value.

The Stevensons are third-generation owners and operators of Stevenson & Sons Funeral Homes, a company started in 1962 that currently has six locations in Montana, according to its website.

The defendants are accused of failing to provide the Stevensons with accurate information, disclose risks, or assess the suitability of the policies. They allegedly gave “false or misleading representation of the likely performance” of the life insurance products, which led to damages that were significantly higher than the Stevensons’s initial outlays and led the plaintiffs “down a path of financial ruin,” according to the lawsuit.

Specifically, Gardner, Mass Mutual, and the other firms are accused in the lawsuit of professional negligence, misrepresentation, breach of fiduciary duty, fraud, and fraudulent inducement related to “unsuitable” policies that caused “catastrophic financial damages.”

For all these charges, the Stevenson family is seeking compensation, including rescission of contracts to make them “whole,” restitution, punitive damages, and an accounting of payments. Exact dollar amounts, however, were not specified.

Mass Mutual and attorneys for the Stevensons did not respond to a request for comment.