Guaranteed Universal Life Insurance (GUL) offers a harmonious blend of the enduring protection
found in permanent life insurance with the simplicity and affordability characteristic of term life
insurance. This policy type stands out for its guaranteed death benefit that extends to a
predetermined age, which can be as advanced as 90, 95, 100, or even 121. To maintain this
guarantee, the policyholder must consistently pay the predetermined premiums.
Advantages of GUL
GUL is designed with specific advantages in mind:
Dependable Death Benefit: The policy guarantees a death benefit to the chosen age, ensuring that
beneficiaries have financial support when the policyholder passes away, provided the premiums
are maintained.
Stable Premiums: The premiums are set at a fixed rate, offering a cost-effective alternative to the
typically higher-priced whole-life insurance while ensuring permanent coverage.
Adaptability: GUL policies may offer a degree of flexibility, permitting adjustments to premium
payments and the death benefit, catering to changing financial situations.
Disadvantages of GUL
However, GUL also comes with certain limitations:
Minimal Cash Value Accumulation: Unlike other types of permanent life insurance, GUL policies
either do not build cash value or do so at a very reduced rate.
Limited Investment Potential: The absence of an investment element means that there’s no
significant growth in cash value over time, which could be a drawback for individuals seeking an
investment component in their life insurance.
Risk of Losing Guarantee: If premium payments are not made on time, the guaranteed aspect of the
policy can be compromised, potentially leading to a lapse in coverage.
