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Guaranteed universal life insurance is a permanent life insurance policy that comes with a guaranteed death benefit and fixed premiums. If you’d like lifelong coverage, it’s less expensive and a convenient option. Although Aflac does not offer guaranteed universal life, here’s what you should know about how it works so you can decide whether this type of policy suits you and your loved ones. Please note, this article contains a general overview and is not intended to portray any specific benefits or details of Aflac policies.
With guaranteed universal life insurance, you can count on a death benefit no matter when you pass away and premium payments that will remain the same. Since it usually has minimal to no cash value, a guaranteed universal life policy is an affordable way to get coverage for the rest of your life. The caveat, however, is that if you make a late payment or miss one altogether, the policy may terminate, and the insurer will keep the premiums you already paid.1 Guaranteed life is a cost-effective yet less flexible permanent life insurance policy.
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Some noteworthy pros and cons of guaranteed universal life insurance include:
Guaranteed issue life insurance comes with affordable rates. When you purchase guaranteed universal life insurance, you can choose a cost-effective premium payment schedule that fits your budget. Your premium payments will remain the same throughout your life.1
If you find that your life insurance needs change, you may be able to modify the coverage amount of a guaranteed universal life insurance policy. This can be helpful if you need more or less coverage in the future. Depending on the insurance company, you might also get the chance to add on riders to further customize your coverage.2
A guaranteed universal life insurance policy guarantees a minimum death benefit, no matter how the market performs.2 This is not true for some other types of universal life insurance plans.
With guaranteed universal life insurance, you may lose your coverage if you miss a premium payment. So, it’s important to stay on top of payments each month.
As mentioned earlier, guaranteed universal life insurance has low to no cash value. Although this means the policy comes with reasonable premiums, it also won’t allow policyholders to grow much or any cash value over time.
Here’s a look at the rates of a $250,000 guaranteed universal life insurance policy by age and gender:2
| Age | Gender | Cost |
|---|---|---|
| 25 | Female | $79 |
| Male | $89 | |
| 35 | Female | $117 |
| Male | $130 | |
| 45 | Female | $187 |
| Male | $207 | |
| 55 | Female | $291 |
| Male | $331 |
If you’re unsure of whether guaranteed universal life insurance makes sense for your particular situation, consider how it compares to other options:
Unlike most guaranteed universal life policies, universal life insurance comes with cash value that earns interest based on the market. You can also use your cash value to pay your premiums or meet other financial goals.
Unlike guaranteed universal life insurance, variable universal life insurance allows you to select sub-accounts for cash value investments. This means there could be great returns on the cash value, but can also mean that your cash value could go down if the investments don’t perform well.2 It also comes with a flexible death benefit and flexible premiums.
Whole life insurance is a plan that is yours for your lifetime and features a death benefit and cash value component. This type of policy typically comes with higher premiums than guaranteed universal life insurance.
Unlike guaranteed universal life insurance, term life insurance offers coverage for a set period, typically between 10 and 30 years. This type of policy offers a death benefit but no cash value component.
There are several instances in which guaranteed universal life insurance is a great option. If you’re in the market for permanent coverage but want to keep premium costs low, it’s worth considering.
Guaranteed universal life might also be a solid choice if you’d like affordable coverage that offers a permanent death benefit or a permanent policy for a dependent with special needs. In addition, it may be a smart move if your goal is to cover estate tax but you don’t need a cash value component.2
Guaranteed universal life insurance is an affordable permanent life insurance plan with a guaranteed death benefit and fixed premiums. But this life insurance policy doesn’t offer a large cash value account and can terminate if you don’t make your premium payments.
If you’re looking for alternatives to guaranteed universal life insurance, Aflac offers term and whole life insurance policies with enhanced coverage. You can apply quickly from the comfort of your own home and enjoy reasonable premiums. Start chatting with an agent today for more information and get a quote.
1 Forbes - What Is Universal Life Insurance? Explained. Updated April 11, 2022. https://www.forbes.com/advisor/life-insurance/universal-life-insurance/. Accessed April 28, 2023.
2 Policygenius - Guaranteed Universal Life Insurance: What It Is, How It Works. Updated March 20, 2023. https://www.policygenius.com/life-insurance/guaranteed-universal-life-insurance/#how-much-does-guaranteed-universal-life-insurance-cost. Accessed April 28, 2023.
Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.
68000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400.65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series: Whole: In Arkansas, Delaware & Oregon, Policy Q60100M. In Idaho Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Texas, Policy Q60100MTX.Q60000 series: Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.
Final Expense insurance coverage is underwritten by Tier One Insurance Company.
The life insurance policy described herein contains an optional Accelerated Death Benefits Rider that is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code. Aflac does not give legal or tax advice. Please consult with a qualified legal, tax, and accounting advisor before engaging in any transaction. In AR, AZ, ID, OK, OR, PA, TX and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
This is a brief product overview only. Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions. For complete details, including availability and costs, please contact your local Aflac agent.
Content within this article is for informational purposes only and does not constitute legal, tax, accounting or medical advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer will have to consider in their benefits decision-making process. This article contains a general overview and is not intended to portray any specific benefits or details of Aflac policies.
Aflac does not offer Universal or Variable Universal life insurance.
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