What is Guaranteed Universal Life Insurance?
Most people find whole life insurance to be too expensive, and while term life insurance can indeed be the perfect solution, concerns often arise:
“I like the price of term life insurance but am afraid of outliving it and being left without coverage later in life.”This is a very common concern, as living past the end of your term would leave your family without protection. Luckily, there is a middle ground between whole life insurance and term life insurance.
Guaranteed universal life insurance is an increasingly popular choice for people looking to secure affordable long-term coverage. Continue reading to learn how these policies can offer the affordability of term life and the security of whole life.
Quick Article Guide
Here’s what we'll cover in this post:
- Your Next and Last Life Insurance Policy
- Enter Guaranteed Universal Life: Coverage to 90, 95, and Beyond
- The Fine Print in Non-Guaranteed Universal Life Insurance
- Benefits of Guaranteed Universal Life Insurance
- Why Purchase Guaranteed Universal Life Insurance?
- Real Life Example of Guaranteed vs. Non-Guaranteed Universal Life Insurance
- The Best Guaranteed Universal Life Insurance Providers
- Talk to An Expert
Your Next and Last Life Insurance Policy
If you are like many of our clients aged 60 or older, you’ve had term life insurance in the past, and it has since expired or is getting ready to expire. If this is the situation you are in, you’ve probably received a notice that your rates are about to skyrocket.
Your next policy should be your last policy, as it becomes increasingly difficult to re-qualify as you age, and your health is not guaranteed to remain insurable. This is why we always recommend purchasing your life insurance policy as young as possible. However, there are still affordable options as you get older.
Read more about life insurance after 60, how to save on rates, and how to protect your family here.
Enter Guaranteed Universal Life: Coverage to 90, 95, and Beyond
Despite the implication of its name, guaranteed universal life (GUL) insurance is not whole life insurance. However, it is designed to last your entire life. It does not build cash value, which allows you to keep your monthly payments low, and it does not carry the expensive management fees of whole life.
Instead, a guaranteed universal life policy offers fixed rates throughout the life of the policy, just like term insurance. GUL policies are also set to specific ages (usually 90, 95, 100, 105, 110, or 121), while term life insurance offers fixed rates for a specific number of years (usually 10, 15, 20, 25, 30).
The later the age, the higher the likelihood of your policy paying out a death benefit, and consequently, the higher the cost. With this in mind, you have the option of tailoring a GUL policy to your specific needs, life expectancy, and budget.
In many cases, especially after the age of 60, a guaranteed universal life policy might even be more affordable than a comparable term life policy.
The Fine Print in Non-Guaranteed Universal Life Insurance
We’re always skeptical of any non-guaranteed universal life policy that involves a savings or investment option, given the market risk and the fact that your cash accumulation is not a death benefit but a living benefit.
Most of the clients we talk to are unaware of the fact that the 'cash' in their 'cash accumulating' policy is never really their money. Consider the fine print:
- If you withdraw the cash from your 'cash accumulating policy,' the insurance company views this as a loan, and the death benefit from your policy will be reduced until the loan is paid back with interest. If you fail to repay this loan, you can lose your coverage.
- If you pass away before you withdraw the 'cash value' from your life insurance policy, the insurance company gets to keep your cash.
- If you withdraw the cash from your 'cash accumulating' policy, you must pay a hefty fee, similar to a loan origination fee. Some life insurance companies charge more than $500 for this service.
Benefits of Guaranteed Universal Life Insurance
Here’s why we’re big proponents of guaranteed universal life over non-guaranteed universal life:
- Your cost of insurance will not change, even as you get older or if your health changes.
- Your coverage isn’t tied to an investment. You pay for the life insurance protection only, just like term life insurance.
- You aren’t pouring extra money into your policy. Trust the financial experts on this – you’re better off putting your money into savings, or perhaps paying down your mortgage.
- You will pay less up front. Guaranteed universal life insurance is a fraction of the cost of non-guaranteed universal life.
- You don’t run the risk of losing coverage from unfavorable investments or changes in the market.
Why Purchase Guaranteed Universal Life Insurance?
Guaranteed universal life insurance is the best solution for someone that needs permanent life insurance protection without any surprises down the road. It is also the most common choice for estate attorneys who want to avoid potential liabilities from surviving family members in the future.
With a GUL, the death benefit is guaranteed as long as the premiums are paid on time and your coverage is active. For these reasons, guaranteed universal life (GUL) insurance policies are usually ideal for the following purposes:
- Pension maximization
- Estate planning
- Leaving an inheritance
- Funding a trust
Over the years, we've helped hundreds of the families with the life insurance they need to establish Special Needs Trusts, fund an Irrevocable Living Trust, or maximize a pension plan, and we can help you too. Our agents offer at least 10 years of experience, and we're licensed in every state.
Real Life Example of Guaranteed vs. Non-Guaranteed Universal Life Insurance
A few years ago, we worked with a 66-year-old male named Frank. Frank wanted to purchase a $500,000 policy to leave an inheritance for his daughters. To accomplish this, he needed coverage that would last his entire life.
The males in Frank’s family typically live until their late 80s, and with Frank’s current health standing, he plans to live until at least the age of 90. We decided to compare Frank’s options for a guaranteed universal life policy until age 95.
Before deciding to call us, Frank spoke with a local agent who recommended a non-guaranteed universal life insurance policy to him instead.
For this policy, he was quoted with a planned annual premium of $12,000 dollars, but his "investment" would also have to earn an average interest rate of 5% each year until age 90 or later. To see a cash value, Frank would have to earn at least 6% interest (on average) over the next 24 years.
However, if the market does not perform well at some point in the future, the cost of his policy could dramatically increase to offset this difference. His rates could also increase at any time with a non-guaranteed policy, even if the market is performing well.
With a guaranteed universal life insurance policy, there are no surprises. Frank’s rate of $9,350 per year will not increase, even if the market flops. The dollar amount may not seem like a huge difference, but let’s see what happens if Frank lives until age 90:
| Policy Type: | Guaranteed Universal Life | Non- Guaranteed Universal Life |
| Annual Cost: | $9,350 | $12,000 |
| Cost to Age 90: | $224,400 | $288,000 |
| Amount Saved: | $63,600 | N/A |
Instead of tying up more than $60,000 over the course of two decades and hoping to earn it back in interest, Frank will have full access to the money he saves each year. He also won't have to worry about any future surprises from the stock market or his life insurance provider.
The Best Guaranteed Universal Life Insurance Providers
Here is a list of the best guaranteed universal life insurance providers and the coverage options they offer. For more information, please see our article, 'The 8 Best Guaranteed Universal Life Insurance Companies for 2023.'
| Company | Issue Ages | Coverage | |
| |||
 |
From: 18 To: 75 |
$100,000 - $10,000,000 | |
 |
From: 20 To: 75 |
$25,000 - $5,000,000 | |
 |
From: 18 To: 80 |
$100,000 - $10,000,000 | |
 |
From: 0 To: 85 |
$50,000 - $10,000,000 | |
 |
From: 18 To: 75 |
$50,000 - $10,000,000 | |
 |
From: 18 To: 85 |
$50,000 - $10,000,000 | |
 |
From: 0 To: 85 |
$50,000 - $10,000,000 | |
 |
From: 18 To: 85 |
$100,000 - $10,000,000 |
Talk to An Expert
There’s no cost to apply for guaranteed universal life insurance. You only pay for the coverage itself once you’re approved and have accepted the policy. If you think guaranteed universal life insurance might be right for you, contact JRC Insurance Group for a free quote and consultation.
As a non-partial, no-fee brokerage, our goal is match our clients with the best life insurance options available by shopping and comparing quotes from 63 highly-rated insurers. By having access to dozens of companies and their guidelines, we’re able to save our client’s valuable time and money.
To learn more about guaranteed universal life insurance, or to obtain an accurate quote, give us a call today, toll-free at 855-247-9555. Or, you can request a free quote below to instantly compare quotes from dozens of top-rated providers.
Written by:
Clifford Pendell
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.
Ask Our Experts
Leave your question below and one of our insurance agents will give you a detailed answer.
Questions From Our Visitors
Some of the questions we received from our website visitors:
I'm interested in getting a quote for a GUL policy to age 100 for $750k. I'm 57 and in very good health. I'm just starting this and don't want to explore this in my own time. Thank you.
Derrick, Thank you for your question and visiting JRC's life insurance website. One of our agents will be contacting you with ballpark best pricing cost comparisons for a 750k/age to 100 GUL policy and process of how to qualify. It can vary a bit by insurance carrier. They will likely ask what state you reside in, as we shop 40 A-rate life insurance carriers, and not all operate in every state. We look forward to helping you.
My mother has term life insurance that will expire at age 94. She is 92, and will lose all the money. Is there anything she can do to save this money? We really need a solution.
Ms. Deakin, Thank you for contacting JRC Life Insurance and visiting our website. Are you sure your mother has term insurance? Term insurance policies typically don't extend past the age of 85 or so. If your mother does indeed have term insurance, there's likely no cash value since the "term" refers to the number of years the price of the insurance is guaranteed. It's not an investment plan. Think of it like home or auto insurance....you're insured against a financial loss while paying premiums. There may be options to continue your mother's insurance past age 94. If so, it will be expensive due to her advanced age. If you haven't already done so, check with the insurance company.
When you say the Gtd UL premiums need to be paid on time, are you referring that the premiums must be paid by the due date or before the expiration of the 31 day grace period?
Hi William, We always recommend making your life insurance payments on-time, but if you fall behind, you have up to 30 days to catch up your payments. On the 31st day, the life insurance provider has the right to cancel your coverage. If you have additional questions about Guaranteed Universal Life insurance, please feel free to contact us, toll-free at: 855-247-9555. Thanks for visiting, Cliff Pendell
My calls are screened please leave a voicemail and I will call back you back
Hi Sherin, thanks for your comment. You can also reach us at 855-247-9555.