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What is a Guaranteed Universal Life Insurance Policy?

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.

What is guaranteed universal life insurance?

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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Pros and cons of guaranteed universal life insurance

Some noteworthy pros and cons of guaranteed universal life insurance include:

Affordable life insurance premiums

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

Can modify guaranteed universal life insurance coverage?

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

Guaranteed death benefit

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.

Risk of losing coverage

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.

Minimal to no cash value

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.

What are guaranteed universal life insurance rates?

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

How guaranteed universal life insurance compares to other life insurance policies

If you’re unsure of whether guaranteed universal life insurance makes sense for your particular situation, consider how it compares to other options:

Universal life insurance

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.

Variable universal life insurance

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

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.

Term 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.

Is guaranteed universal life insurance right for me?

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

Get a life insurance quote

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.

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