What Is Guaranteed Universal Life Insurance?

Guaranteed universal life insurance (GUL) is a type of permanent insurance offering lifelong coverage with level premiums and a guaranteed death benefit. Unlike other universal life insurance policies, guaranteed universal life accumulates minimal, if any, cash value that you can use when you are alive. In exchange, it is more affordable than other permanent life insurance options.

Unders🍸tanding Guaranteed Universal Life Insurance

🉐 Guaranteed universal life insurance is a low-cost permanent life insurance policy that provides a guaranteed death benefit for your beneficiary. The key features of a GUL policy include:

• Affordable premiums: Since a GUL policy focuses on the death benefit rather than growing cash value, premiums are usually cheaper than 澳洲幸运5官方开奖结果体彩网:universal🔜 and whole life insurance policies.
• Age limit on premium guarantee: When you apply for a GUL policy, you can choose the policy maturity date, which is typically when your coverage ends. The maturity date is expressed in terms of your age and often ranges from 90 to 121. The longer the guarantee period, the more expensive the premiums will be. If you live past the guarantee period, some policies may allow you to continue coverage, but your premiums could increase significantly at that point. Since the policy maturity date tends to be very late in life, policyholders often don’t reach it. That’s why these policies are described as permanent, lifelong coverage.
• No-lapse guarantee: The policy is guaranteed not to lapse if you make on-time premium payments in full. Unlike other types of universal insurance, market conditions or inadequate funding (due to flexible premiums) cannot cause it to lapse. It will stay in force until you reach your premium-guarantee age or pass away, whichever comes first.
• Fixed premium: Your premium is guaranteed to remain the same up until your chosen maturity age.

GUL vs. Guaranteed Issue vs. Guaranteed Insurability♛ Rider

A GUL policy is not the same as guaranteed issue life insurance or a guaranteed insurability rider. 澳洲幸运5官方开奖结果体彩网:Guaranteed issue life insurance g🅠uarantees acceptance when you ap🥀ply for coverage. You cannot be turned down. For GUL, you need approval based on factors like your health and tobacco status to determine eligibility and pricing, though some insurance companies offer no-medical exam options. 

A 澳洲幸运5官方开奖结果体彩网:guaranteed insurability rider is an opti🍨onal feature some providers offer that allows you to purchase more life insurance coverage at predetermined life events or ages without proving insurability or taking a medical exam. You might be able to change a GUL death benefit, but it varies by insurance c﷽ompany and can require underwriting and a medical exam.

Pros and Cons o൲f Guaranteed Universal Life Insurꩲance

Pros of Guaranteed Universal🧜 Life Insurance, Explained

• Affordable permanent coverage: Guaranteed universal life is less expensive than 澳洲幸运5官方开奖结果体彩网:other permanent life i𒀰nsurance po🍎licies, providing an affordable option for people with lifelong coverage needs. 
• Level premiums: Premiums will stay the same right up until your selected maturity age. This makes a GUL policy easier to budget for without the fluctuations you might see with other universal life insurance policies. If you live past the age limit, though, your premiums could increase a lot if you want to stay insured.
• No-lapse guarantee: Unlike non-guaranteed universal life, a GUL policy will not be canceled even if the policy’s cash surrender value does not cover the cost of insurance. As long as you pay your premiums on time, you’ll be covered. 
• Customizable: You can choose how long your premium guarantee lasts, and some policies allow you to lower your death benefit if life circumstances change. Riders may also be available, such as a 澳洲幸运5官方开奖结果体彩网:return-of-premium rider, which refunds paid premiums if you cancel the policy after a specified time period.

Cons of Guaranteed Un💦iversal Life Insurance, Expl🀅ained

• Pricier than term life insurance: Although guaranteed universal life insurance is a cheaper permanent life insurance option, it’s still more expensive than temporary 澳洲幸运5官方开奖结果体彩网:term life insurance.
• Minimal cash value: These policies are affordable because they focus on the death benefit rather than the cash value component that whole and other universal life insurance policies feature. Some GUL policies don’t offer a cash value component, and those that do provide minimal growth potential, so they’re not a good investment vehicle.
• Missed payments could cause lapse quickly: Missing a premium payment could cause the policy to lapse, or cancel, which means you’ll no longer have a death benefit for your beneficiaries. While that’s true of any life insurance policy, it’s particularly important for a GUL. Other permanent policies have more of a cash value reserve that you can use to cover premiums. Since a GUL has little to no cash value, it could lapse more quickly after missed payments.
• Doesn’t offer true guaranteed lifelong coverage: If you end up living past your GUL’s maturity age, the coverage could end or you may need to pay significantly more at that time to extend. This could turn into a problem if you have a long life expectancy, especially if you set the GUL maturity age for 90 or 95. A GUL doesn’t offer guaranteed lifelong coverage at a fixed price like whole life insurance.  

Guaranteed Universal Life vs. Other Types 🍬of♏ Life Insurance

Who Is Guaranteed Universal Life Insurance Best F𒅌or?

Guaranteed universal life insurance is best for people who need permanent coverage and have savings elsewhere. A guaranteed universꦕal life policy can provide lifelong protection at an affordable price, often for less than a whole life policy. 

For example, you might consider a GUL policy if you want a death benefit that can help your heirs pay expenses related to your death, such as 澳洲幸运5官方开奖结果体彩网:estate taxes or inherited debts, but you don’t need the cash value from a life insurance policy that you could use while you’re alive—or you simply can’t afford a cash-value policy. With a GUL, all your premium goes toward buying the largest death benefit possible for your ✅budget with little to no money going toward the cash value. 

A GUL policy might also be a good fit if you have someone, like a child with special needs, who will depend on you indefinitely for financial support. As with other forms of permanent life insurance, the GUL policy can prov🀅ide the money to sec🍃ure their future after you pass away.

Finally, a GUL can make sense for retirees who want a more affordable life insurance policy and can’t qualify for term life because of the age limits. Insurers might only sell term policies to people in their 70s, but some would continue selling GULs to people in their 80s.

Frequently Asked Questions (FAQs)

The Bottom Line

Guaranteed universal life insurance (GUL) is a type of permanent life insurance that off🤡ers inexpensive, lifelong coverage with fixed premiums and a guaranteed death benefit. While these policies may include cash value, the amount is usually minimal. These policies are primarily m𝐆eant to create a death benefit for heirs at a more affordable price. While that reduces costs, it also means that if you miss premium payments, you can lose coverage more quickly than policies with cash value.

Consult with a life insurance agent to determine whether a GUL makes sense for your financial plan, and if so, determine how to set it up properl꧋y for your goals, budget, and life expectancy.