UPDATED: Aug 12, 2020
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.
What you need to know…
- Guaranteed universal life insurance is often significantly more expensive than term life insurance
- With guaranteed universal life insurance the policy provider guarantees your death benefit, cash value, and/or premiums
- For those who want a more than just a death benefit for their beneficiaries, guaranteed universal life insurance may be a good option
After searching and searching for the right life insurance policy, you’ve decided that you want permanent life insurance, only to learn that there are quite a few options to choose from, including guaranteed universal. So, what is guaranteed universal life insurance?
In just a few minutes you won’t have to ask yourself what guaranteed universal life insurance is. We’ll cover how to get guaranteed universal life insurance, all of the benefits, and we’ll help you decide if guaranteed universal life insurance is a good policy for you.
Before learning what is guaranteed universal life insurance, don’t miss your chance to see your FREE quotes using the tool above. Click now.
Shopping for Guaranteed Universal Life Insurance Quotes
There are many life insurance companies to choose from and not all of them are the best guaranteed universal life insurance companies. With all of those options, we think it’s important to note which of those companies are the most well-equipped to handle your needs. Check out the top companies by market share below:
- Northwestern Mutual
- Metropolitan Group
- New York Life
- Lincoln National
- John Hancock
- State Farm
However, this is just a sample of the life insurance companies offering competitive rates. Guaranteed universal life insurance from Mutual of Omaha, for example, is also an option.
Guaranteed universal life insurance (GUL) tends to be more expensive than term life insurance. On the contrary, it also tends to be a bit cheaper than whole life insurance. Because guaranteed universal life insurance does cover your lifespan, it does tend to lean a little closer to whole life insurance prices. So I question, term or permanent life insurance, which is better for you?
When shopping for guaranteed universal life insurance, there will be some special clauses, or riders, you may need to be aware of in your policy to better estimate your premiums. For example, you may have options for return-of-premium which would cover you if you decided to terminate your plan or reduce your death benefit.
Like any other permanent life insurance policy, guaranteed universal life insurance tends to be significantly more expensive than term life insurance. Keep in mind that guaranteed universal life insurance does have flexible premiums to benefit consumers.
Sample Monthly Guaranteed Universal Life Insurance Rates
Now, let’s take a look at some sample monthly guaranteed universal life insurance rates based on key ages to give you a better idea of what to expect.
|Policyholder Age||Average Monthly Rate|
Get Your Rates Quote Now
Premiums do vary tremendously based on various factors listed below. In any case, it’s reasonable to expect to pay somewhere between the rates for whole life versus term life insurance listed above when purchasing guaranteed universal life insurance.
Can your guaranteed universal life insurance rates change? Absolutely. Rates vary greatly based on many factors. That said, the market does influence interest rates which could be a factor when considering guaranteed universal life insurance.
Ready to get started?
Your quotes are always free.
What is a guaranteed universal life insurance policy?
Guaranteed universal life insurance is a form of permanent life insurance. Permanent life insurance is simply designed to last throughout an entire lifetime. With guaranteed universal life insurance, your premiums are set at one rate for the duration of your life or a limited payment period.
Although similar, guaranteed universal life insurance is not to be confused with whole life insurance.
What is the difference between whole life insurance and universal life insurance?
The key difference between the two policy types is that guaranteed universal life insurance allows flexible premiums. In many cases, this is due to a reduced cash value when compared to whole life.
Flexible premiums essentially mean that a client can pay more or less at certain periods to their benefit or need. For example, if someone needed to save a few bucks during the COVID-19 pandemic, they could pay less on their premiums for a couple of months until they are ready to get back to normal. This is one of a few reasons to purchase permanent life insurance.
What is a guaranteed universal life policy?
Prospective clients can have guaranteed universal life insurance explained as a more cost-efficient version of whole life insurance. Whole life insurance premiums can be more expensive, albeit used more-so as an investment than guaranteed universal life insurance.
A guaranteed universal life insurance policy has multiple components. The guaranteed portion essentially states that the company or provider of the policy guarantees your death benefit, cash value, and/or premiums. If the market crashes it’s not your problem.
A universal life insurance policy is simply a permanent life insurance policy that typically has both a savings component and an insurance (death benefit) component. As mentioned before, these can typically be adjusted based on the needs of the policyholder.
So, why choose guaranteed universal life insurance? If you want to have a predictable payment that covers your lifespan, guaranteed universal life insurance may be right for you. With the same context as whole life insurance, but more flexibility given a financial emergency, there is less risk with a guaranteed universal life insurance policy.
Speaking of risk, before you make any decisions you should ask yourself what the difference is between guaranteed and non-guaranteed life insurance. A guaranteed policy has higher premiums but puts the insurance provider at risk whereas a non-guaranteed policy puts the customer at risk. Who do you want to absorb a market crash?
In short, it’s good to be able to outline guaranteed universal life insurance policies. Expect to pay a premium, between whole and term life insurance prices, that covers your death benefit and still has a cash value component to serve as an investment.
Hundreds of companies provide guaranteed universal life insurance policies. Of those, guaranteed universal life insurance is considered a strength of Nationwide, North American Company, Principal Financial, and even Protective Life.
To find out if a company offers guaranteed universal life insurance, you can simply visit its specific website to get its individual information. To make matters easier for you, you can get free quotes from multiple companies on this page.
Ready to get started?
Your quotes are always free.
How does a universal life policy work?
A universal life insurance policy is a unique tool that can be used partly to cover your death benefit, but most universal life policies also carry a cash value. Is a cash value life insurance policy all it’s cracked up to be? How does a universal life policy work?
Cash value in a universal life insurance policy means that you pay a higher premium, but are essentially paying into a savings fund that you can access if necessary. Unlike a whole life insurance policy, that cash value can be paid in varying amounts if needed, meaning your monthly premiums can be reduced if needed.
What is the difference between guaranteed and non-guaranteed universal life insurance?
For a guaranteed life insurance policy, the policyholder will pay a set premium that will not change despite things like inflation, market changes, or more. This is basically to protect the policyholder, though that does come at a cost.
For a non-guaranteed life insurance policy, the premiums tend to start lower. However, if there are any events that could be catastrophic to the market, the premiums could be raised at the expense of the policyholder. There is a bit of risk involved.
What is guaranteed universal life insurance used for?
Guaranteed universal life insurance is yet another form of permanent life insurance. It is desirable to those who would like to get ahead on their life insurance, thus protecting their family or beneficiaries if the policyholder were to pass. This, however, is not the sole purpose of guaranteed universal life insurance.
Does guaranteed universal life insurance help consumers? The answer is yes. Guaranteed universal life insurance allows policyholders more flexibility with great coverage and consistent rates. It makes budgeting, hardships, and the overall life insurance process easier.
Who should consider guaranteed universal life insurance?
Guaranteed universal life insurance is ideal for anyone looking to protect their beneficiaries and invest. It is more cost-effective than whole life insurance, but still holds cash value to use if you are in a bind financially. With consistent rates throughout your lifetime, it could be good for anyone with beneficiaries.
Imagine you are a newlywed and you just purchased your guaranteed universal life insurance policy with $250,000 in coverage. Thirty years down the road you get cancer and sadly leave your spouse behind. You two were able to make the payments, despite The Great Recession, thanks to the flexibility of your policy.
Your mortgage gets paid off, and you accumulated $100,000 in cash value for your spouse to use for funeral expenses, college tuition for your kids, or to pay off the boat that’s now sitting in the driveway. Thankfully, her only concern will be mourning your loss. That’s the coverage you want.
What are the benefits of guaranteed universal life insurance?
Guaranteed universal life insurance has numerous benefits which are highlighted by flexibility, reasonable rates, and cash value. Compared to whole and term life insurance, guaranteed universal life insurance gives you the best of both worlds. Find guaranteed universal life rates using our FREE quote tool below.
Guaranteed Universal Life Insurance for Seniors
It can be expected that any life insurance policy will be a little more pricey for aging adults. With guaranteed universal life insurance for seniors over 70, you can expect the same. That said, there are some benefits.
Even with term life insurance, rates skyrocket as adults get older. At least with guaranteed universal life insurance, you will pay less than whole life insurance, still build cash value, and have flexibility as you age. Some seniors like to prepare with a similar policy known as indexed universal life insurance, which tends to fluctuate with the market like non-guaranteed.
For seniors, it’s hard enough to find a reasonable life insurance policy, and even then, many companies only offer 10-year terms. If you live another 30 years, you are going to pay more and more for the same coverage each 10 years. You get consistent payments as a senior with guaranteed universal life insurance.
Ready to get started?
Your quotes are always free.
How to Qualify for Guaranteed Universal Life Insurance
Luckily, most of your big companies offer guaranteed universal life insurance. To find out if a specific company has guaranteed universal life insurance, simply go to its website and see what services the company offers.
What might take a bit more research are other riders and clauses they offer in their policies. For example, do they offer a return of premium life insurance rider? If you need to cancel your policy, don’t you want some of your dividends back?
Want to be able to increase your death benefit without going through all of the underwriting? You might want a guaranteed insurability rider. Be sure to ask your insurance provider about riders are offered to help protect yourself and your beneficiaries.
No-Exam versus Guaranteed-Issue Policies
Another consideration during the application process will be exam versus no-exam options, at least for some companies. Remember that no-exam rates are typically higher than exam rates due to the unknown.
No-medical exam term life insurance rates are higher, so why wouldn’t the same be true with permanent life insurance? If you have health factors you want to remain unknown, no-exam policies are likely the safer bet for you.
Again, a guaranteed-issue policy simply means your rates won’t change. If something affects the company, that’s not your problem. This is also why it’s smart to choose insurance companies with strong financial backgrounds.
What if my guaranteed universal life insurance application is denied?
There’s always an off chance that a company will deny your guaranteed universal life insurance application. If this is the case, you always have the option with trying another company.
You’ll want to get a report stating why your application was denied. For example, maybe you took an exam and found out you had symptoms of COPD. You could always go with a no-exam policy to get by that issue with another company.
What to do if your application is denied?
Depending on why your life insurance application was denied, you can always appeal the denial. This may mean paying a higher rate or losing a specific rider. Make sure to read the fine print.
Something off about your policy details? You can always settle for a non-guaranteed or indexed universal life insurance policy to pay a lower premium, but know that the insurance provider is basically in the power seat then. You might get lucky and keep consistent premiums over your life, or they might climb rapidly over the course of a few years, it’s a mystery.
Is guaranteed universal life insurance worth it?
Guaranteed universal life insurance may or may not be for you. If you have the means to pay more than a term life insurance policy, it would be a great idea to shop for different permanent life insurance options, including guaranteed universal life insurance.
If you want to invest, but can’t afford the high premiums associated with a whole life insurance policy, the guaranteed universal life insurance is a safer option. Remember you can always adjust your coverage as needed. Still confused? Check out these tips on whole versus flexible life insurance from the NAIC.
Guaranteed Universal Life Insurance Pros and Cons
There are many reasons to prefer or avoid a guaranteed universal life insurance policy. Like all life insurance policies, they aren’t for everyone.
Pros: Why Guaranteed Universal Life Insurance is a Good Investment
It’s easy to summarize the guaranteed universal life insurance pros when comparing to other life insurance policies.
- Cheaper rates than whole life insurance
- Financial flexibility and safety
- Still holds cash value
With so many options, we want to understand what each policy type has to offer.
Cons: Disadvantages of Guaranteed Universal Life Insurance
GUL might have some great benefits, but no life insurance policy is for everyone. Like the disadvantages of universal life insurance, guaranteed universal life insurance has the following drawbacks.
- More expensive than term life insurance
- Might not be the best investment location
If you have the knowledge to invest elsewhere, you might find other sources more lucrative.
Ready to get started?
Your quotes are always free.
Guaranteed Universal Life Insurance: The Bottom Line
At the end of the day, there are a lot of concerns to consider when choosing a life insurance policy. Guaranteed universal life insurance is great for those who want a little more than just a death benefit for their beneficiaries.
Now that we’ve answered the question of what is guaranteed universal life insurance, don’t wait another minute to get affordable life insurance. Check out our FREE quote tool to get started now.