Last Updated: September 2020
Guaranteed universal life insurance has the guarantees of term life insurance but like permanent life insurance, it doesn’t expire.
This article will discuss the pros and cons of guaranteed universal life (GUL) insurance. This is also referred to as “Universal Life with a No-Lapse Guarantee” and “Term For Life”.
- Pros of Guaranteed Universal Life Insurance
- Cons of Guaranteed Universal Life Insurance
- How to Apply for Guaranteed Universal Life Insurance
Pros of Guaranteed Universal Life Insurance
Let’s start with the benefits of guaranteed universal life insurance to see if it might be a good choice for you.
Pro: You Pay Level Premiums for the Rest of Your Life
The premiums, usually monthly payments, never go up and your death benefit will never go down. For people who want to maximize the death benefit with permanent life insurance, this is the type of policy for you.
Pro: GUL Insurance is Easy to Understand
Compared to other types of life insurance policies, guaranteed universal life insurance is easy to understand because of the guarantees associated with it. There are no assumptions of future interest rates that will affect your policy like other universal or whole life insurance policies.
As long as you pay your premiums, all the guarantees stay in place. For permanent life insurance, it doesn’t get much simpler than this.
Pro: Guaranteed Universal Life Insurance is Inexpensive
Compared to other permanent life insurance products, guaranteed universal life insurance is inexpensive. The premise is to take the lowest amount of premiums to keep the policy premium and benefit level until you die.
Pro: You Can Compare Companies Side by Side
This isn’t possible for any other type of permanent life insurance.
We do have to take into account your health which every company will look at you differently. However, because we can compare rates from the best life insurance companies, you’re securing the best guaranteed universal life insurance on the market.
Cons of Guaranteed Universal Life Insurance
Let’s review the downsides of guaranteed universal life insurance. It’s not the best policy for everyone.
Con: GUL has No Cash Value
The policy is built to minimize cash values. There is actually some cash value, but if you touch it, all guarantees go away.
Other permanent policies have cash values that you can access.
Con: GUL is More Expensive Than Term Life Insurance
Since the policy doesn’t expire as term life does, the premiums are more expensive than a term life insurance policy.
Con: If You Miss a Payment, the Guarantees are Taken Away
This is the biggest con. People change bank accounts or move residences and forget to update their address with the life insurance company.
If this happened with whole life and other universal life insurance policies, they would take premiums from your cash value until you get back on track, so you have some flexibility.
With guaranteed universal life, if you miss a payment, the “no-lapse guarantee” is taken off the policy when you re-instate it. Your premiums are no longer guaranteed when you miss a payment.
How to Apply for Guaranteed Universal Life Insurance
If you’re considering a guaranteed universal life insurance product, we recommend working with an independent life insurance agent.
That way, you’ll be able to structure your policy best for you, then compare rates from the best carriers. This will ensure you get the lowest rates when you apply.
Start now by using the quote box to the right or calling us for quotes on guaranteed universal life insurance.