Guaranteed Universal Life Insurance

Guaranteed universal life insurance is a type of permanent life insurance, which means your policy never expires if premiums are paid.

These policies may also offer some flexibility, such as reducing the death benefit amount in the future if your needs change.

A guaranteed universal life policy may or may not include a cash value component.

If it does, cash value growth is minimal compared to other options, such as whole life or variable universal life insurance.

Guaranteed universal life insurance differs from its nonguaranteed counterpart because it accumulates very little — if any — cash value.

With other universal life policies, part of the premium is allocated to a growing cash value account you can borrow against or use to pay future premiums.

The growth of cash value can be tied to current interest rates, market indexes or investments.

These policies are often sold to people who want a hybrid insurance-investment product.

However, like the name implies, the growth of your policy’s cash value is not guaranteed with those policies.

Nonguaranteed universal life insurance tends to be more complex and expensive than guaranteed universal life coverage.

Easy-to-understand lifelong coverage is an attractive feature of guaranteed universal life insurance.

If you want to secure money for your beneficiaries that never expires without paying high premiums to build cash value, guaranteed universal life insurance may be right for you.

The cost of guaranteed universal life insurance is determined by the interest rate at the time your policy was created.

Because you select the age you want coverage to last until, you will not need to reapply for life insurance later.

Your future health and age will not increase your premiums down the road.

In 2021, a 45-year-old man purchasing a guaranteed universal life insurance policy could expect to pay roughly $5,364 a year in premiums for $500,000 worth of coverage that lasts until age 100.

Meanwhile, a whole life insurance policy would cost him about $6,168 a year and a 20-year term life policy would cost approximately $348 a year.

Guaranteed universal life insurance is often considered the best way to get the lowest quotes for permanent coverage.