Guaranteed Universal Life Insurance (sometimes abbreviated as either GUL or UL-G) is a specific type of life insurance that grants the policyholder a guaranteed death benefit. Meaning, that even if there is insufficient cash value within the contract to support the death benefit, it will still remain in force due to the coverage protection guarantee. The requirement to this guarantee is that premium minimums must be met and on time. So in simpler terms: a Guaranteed Universal Life Insurance contract will still pay out a death benefit even if the accumulated cash value decreases or zeroes out as long as the payments are not missed and are made on time as required.
Some of the advantages of a Guaranteed Universal Life Insurance policy could be:
- Premiums can be level for lifetime.
- You can select the age you want the death benefit guaranteed to, whether it is age 90, 95, 100, 105, etc.
- Interest rate volatility will not affect premium payments.
- Generally this type GUL product is inexpensive as a permanent life insurance product compared to other permanent products, as the premium is calculated to maintain a level premium payment until death.
- GUL can be used as alternate to a term life insurance policy with more flexibility regarding planning a longer term length that you will need the policy to be in force. On the other side, term life insurance policies are generally limited to as many as 30 years, with even more term length restrictions for older folks that only allow for shorter term periods as they age.
(Depending on what you are looking for in a life insurance policy)
Some disadvantages of a Guaranteed Universal Life Insurance policy could be:
- Unlike other types of permanent life insurance, like Whole Life for example, Guaranteed Universal Life Insurance policies are generally not designed to build up a lot of cash value within the policy. (This type of insurance policy is designed more as an inexpensive way to get permanent life insurance. By not accumulating a large cash value build up in a Guaranteed Universal Life policy, the premiums can be a lot less expensive then say for a Whole Life Policy that is designed to build cash value.)
- However be aware that the timeliness of your premium payments is critical to maintaining the guaranteed level premium. Other type permanent policies that contain cash value can provide a source within the policy itself to cover the required premium to maintain the death benefit. Although, a missed or late premium payment in a GUL policy can jeopardize the guaranteed premium feature resulting in a policy without a guaranteed premium!
Note: Life Insurance information can be confusing to many people. As an "independent licensed agent" I can explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose a life insurance policy, from many choices of different insurance companies, that you feel fits your needs. Plus if you choose to work with me you will have personalized service by a local agent that can shop premium quotes for you. If you would like my assistance to discuss and/or start the process of getting you insured please call me at 941-404-5334.
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