Guaranteed Universal Life (GUL)
The Guaranteed Universal Life Insurance simply helps to cater for the lapses that exist in term life insurance:
In the term life insurance, you have a level premium and a death benefit for a limited period – you might possibly outlive the policy, and you will be required to secure another policy when you have become older, a time when your health might not be an advantage any longer.
Similarly, it saves you from the high premium payment of the whole life insurance despite its guaranteed death benefit and cash value. Thus, the GUL is called “Secondary Guarantee Universal Life” or “No Lapse” insurance.
How it Works?
The guaranteed universal life insurance has the following features as well as benefits:
You will be required to choose the amount of coverage which you need, there are various premiums which are affordable and available to select from and are guaranteed for the period when you hold the policy which can be as long as you live.
The premium value in the guaranteed universal life insurance doesn’t change once you hold the policy, therefore, you can be assured that you will pay the same premium rate years after you have made the policy even if the cost of living rises. However, this same reason tends to make the guaranteed universal life insurance policy a little more expensive when compared to the other types of insurance policies.
Advantages of the Guaranteed Universal Life Insurance
- Premiums in the GUL can be level for lifetime. It allows you to select the age you want the death benefit guaranteed to, whether it is age 90, 95, 100, 105, 115 or 121.
- The GUIL allows the length of premium payments to be structured according to your ease and preferences.
Volatility of interest rate doesn’t affect premium payments.
- A great benefit of the guaranteed universal life insurance is that it is inexpensive compared to a permanent life insurance product compared to other policies. Its premium is calculated to maintain a level premium payment until death.
- Comparisons of this policy among insurance carriers are relatively easy as it doesn’t have many components.
Disadvantages of the Guaranteed Universal Life Insurance
- This insurance policy may not have any cash value, unlike other permanent life insurance policies.
- Although premiums may be lower than whole life insurance or other permanent insurance policies, the guaranteed universal life insurance will generally be higher than term insurance.
- A huge disadvantage of the guaranteed universal life insurance is that a missed or late premium payment can jeopardize the guaranteed premium.
Who can Benefit from Guaranteed Universal Life Insurance?
Anyone can benefit from Guaranteed Universal Life Insurance as the premium does not increase over time which makes it ideal for younger and older individuals who wish to lock down a lower rate to guarantee their love ones will receive a death benefit.