Non-Guaranteed vs. Guaranteed Universal Life Insurance | Pros And Cons – [MUST READ]


You’ve been debating purchasing life insurance, which is why you’re reading this. Even though you know it’s a smart idea, the choices seem too numerous. What ought I purchase? What amount do I require? Is there anything more I ought to think about before deciding?

The truth is that choosing life insurance is one of those matters on which everyone has an opinion, and most people aren’t thinking in your best interests. You may learn the answers to all of these questions in this post, among others.

The Truth About Guaranteed Life Insurance Vs Non-Guaranteed

The guaranteed universal life insurance policies will be broken down in this article, along with how the guarantees and non-guaranteed policies differ from one another. A GUL is one of the most affordable permanent life insurance products, unlike term life insurance and distinct from guaranteed acceptance life insurance.

In general, a life insurance illustration must be submitted with the application when applying for a guaranteed or non-guaranteed policy. This will display the cash value portion, the guaranteed cost of insurance, and the maximum age at which the insurance is valid.

In general, the majority of these policies are valid from 85 to 121 years of age. Also, you can design the insurance so that premium payments are made until or over a shorter period of time. Yet again, life insurance providers will require proof that the client received the illustration of the insurance policy.

Moreover, a medical examination will typically be required to determine your rate class. Certain kinds of life insurance are not loss-sensitive, contrary to the widespread belief regarding whole life. This is NOT a guaranteed issue life insurance policy, to be clear.

It’s crucial to understand that this is the most affordable permanent life coverage if you’re seeking for life insurance aged 65 or older.

One of the greatest policies for seniors is guaranteed universal life insurance since you may choose an age range and not worry about anything because your funeral expenses will be covered.

These policies, which are extremely customisable, are also utilised for various forms of workers’ compensation. A GUL express no medical plan is provided by Mutual of Omaha up to age 70.

Appreciate reading the article’s remainder in depth.

Non-Guaranteed and Guaranteed Universal Life

Things you should be aware of!

I’ve been explaining this subject a lot lately. In actuality, it frequently results from a life insurance agent performing their duties improperly.

For instance, they are offering to sell a permanent coverage without outlining the potential hazards. Nothing is worse for seniors than having a million-dollar policy and assuming everything is covered just to find out that the rates have increased!

In conclusion, the terms “non-guaranteed” and “guaranteed” may be used when searching for a policy, such as a universal life.

As a result, this is the point at which a client may become perplexed. In actuality, this is what distinguishes genuine agents from fly-by-nighters who won’t be present when things become really bad.

When communicating to a client, it’s critical to understand the distinction. Additionally, Guaranteed and Non-Guaranteed are completely different.

In truth, they are extremely dissimilar, and failing to recognise them now could cost you money in the future.

Due to this, we shall explain the distinction in the following paragraphs. You will thus be able to appreciate why we are such ardent supporters of the Guaranteed Universal Life (GUL).

What Is Non-Guaranteed Universal Life

To be clear, Non-Guaranteed Universal Life belongs to the group of permanent life insurance products. In other words, it provides lifetime coverage. That is accurate in theory, but can you afford it?

The first thing to keep in mind is that a non-guaranteed policy offers a death benefit just like any other type of permanent life insurance, but it also includes an investment element where your premiums will be placed.

One benefit of these policies is that they would be excellent investments in an environment with high interest rates.

Today’s clients are typically not aware of the risks because the rates have risen from their previous lows. Rates are low, thus the policy ends up being underfunded while your insurance costs rise.

Regrettably, the usual salesperson will strive to conceal any potential risks in order to sell a product with a large commission.

In reality, I’ve seen this occur far too frequently without the client being aware of the risks.

Thus, your premium payment typically climbs, in some cases by over 100%, when they ultimately need the coverage the most.

You are unable to pay premiums because you have a fixed income. Unexpectedly, I frequently get calls like this. Most often from a client who is above 75 and only wants to give their spouse a small amount more.

Given this, we do not recommend this kind of product, especially if you want to use it to cover your final costs.

Fund for GUL Cash Accumulation


Cash Accumulation vs. Cash Value

The largest misunderstanding is equating the concept of wealth accumulation with financial worth. The cash value is not a death benefit for a non-guaranteed universal life policy!

If you don’t get rid of that money before you pass away, the insurance company will keep it. For a no-lapse guarantee or to borrow against the policy, the cash value can be utilised.

To repay the debt, they will deduct the amount borrowed from the face amount if you pass away.

As the life insurance company will keep the money, in essence, you are being paid a surrender fee on funds that were never really yours.

What Is GUL Life Insurance


It would be a Guaranteed Universal Life GUL if a term life insurance policy and a whole life insurance policy had a child. With this kind of policy, the insured is at no risk and the life insurance coverage is guaranteed.

It does not develop a guaranteed cash worth, thus it is not like a full life.

Well, it resembles a phrase a lot. For instance, you can choose it to age 85, 90, 95, 100, 105, 110, and 121 instead of looking at a 10, 20, or 30-year period. The death benefit is assured to the age and the premiums are level.

There is no rate of return, in contrast to other permanent insurance products. The major distinction between this and a non-guaranteed UL is the absence of the cash value that generates high management costs.

Generally, guaranteed universal life is less expensive than whole life and one of the best options for estate and pension planning.

Guaranteed Universal Life Insurance Quote

One of my favourite products to recommend to seniors considering different types of permanent life insurance is the GUL. As a result, a senior may be able to obtain affordable life insurance up until age 121 without a cash value component.

Living benefits are included in the insurance through a critical, chronic, and terminal illness rider from my preferred GUL insurers. Most of the time, these insurance will demand a medical exam, especially for people over 70.

These are the top GUL carriers, as an independent agent, that I like to recommend to seniors over 75 in comparison to term and/or whole life insurance (Burial Insurance).

A 75-year-old healthy male who qualifies for the best rate is our possibility. He is looking at GULs that cost $250,000 through age 100.

Guaranteed Universal Life Insurance Rates

Although Mutual of Omaha has a GUL as well, it does not qualify.

The best price is undoubtedly Protective Life Advantage Choice GUL. However, some of the others also have other choices.

The following life insurance companies offer cashback or a return of premium:

  • 100% payback from American National on years 20 and 25
  • AIG offers a 50% cashback on year 15 and 100% payout on years 20 and 25.

These companies provide life insurance with living benefits:

  • National American
  • North American

It’s comforting to know that you can choose to have your premiums reimbursed. Also, having living benefits is an advantage. American National is our preferred carrier!

Guaranteed Universal Life Insurance for Seniors

A GUL could be the greatest choice if you are over 65 and looking for affordable permanent life insurance.

This will guarantee that your premiums will remain constant till the age you specify. 90/95/100/105/110/121 in this instance.

What Are The Benefits of Guaranteed Universal Life

Above all, Assured Universal Life is a fantastic substitute for expensive entire life insurance. Particularly if the customer prefers that assurance to the policy’s cash value component.

In actuality, GULs are between 1/3 and 1/2 the price of whole life.

Having said that, let’s go on to the key justifications for my clients’ recommendations.

  • Your Premiums WILL NOT CHANGE! –With regard to non-guaranteed insurance, it’s common for premiums to rise every few years for customers. In fact, this will be a big problem if you’re elderly and on a fixed income. I frequently get calls like this. You don’t want to shop for life insurance in your 70s, I can assure you of that. Your premium for a guaranteed policy is fixed. For instance, it’s similar to a term policy in that you can choose an age rather than a time frame to be covered. You can offer a premium guarantee till age 90, 95, 100, or 121.
  • Coverage Is Locked And Not Linked To An Investment! I cannot stress enough to consumers that coverage is locked and not linked to an investment. Investments in the non-guaranteed policy must constantly beat expectations, otherwise premiums will increase. The truth is that no investment increases in a straight line. The insured must make up the difference if the market underperforms and the guaranteed interest rate decreases. Typically, this results in an increase in rates, a reduction in coverage, or both. Non-guaranteed plans put you at danger in this context of low interest rates, unless of course you are over-funding and the policy pays for itself. Remember, with Guaranteed plans, the insurer TAKES ALL THE RISK, so you don’t need to worry!
  • Most People Don’t Over-Fund A Life Insurance Policy! –If you choose a non-guaranteed policy, you often have to contribute more to it in order to build cash value. Overall, that cash worth will increase to balance off any investments that perform poorly or go bad. Having stated that, the beneficiaries will get the death benefit in the event of your passing. Nonetheless, the insurer keeps the entire monetary amount. What I always advise is to purchase GUL and invest the difference if you’re wanting to invest. The excellent guiding principle of Suzy Orman and Dave Ramsey is this. The net outcome is that when you pass away, your family will receive both the death benefit and the investments.
  • Paying Less Upfront Is A GREAT THING! –The upfront cost of a Non-Guaranteed Universal Life Insurance policy is significantly higher than that of a GUL. In certain instances, three to four times the cost of the insurance.
  • Can Be Used For A Deferred Compensation Plan – It is not unusual for your accountant to tell you that you make too much money when you run a successful firm. Offering employees a deferred compensation scheme through a flexible universal life, or GUL, is a terrific method for a firm can get a tax write-off.

Comparing Non-Guaranteed vs Guaranteed UL

Above all, comparing these two policies will clear up any misunderstanding. GUL is the best option if you want a level premium with a guaranteed death benefit.

A non-guaranteed insurance is suitable for you if you wish to invest in premiums and take on greater risk.

Comparing Rates of GUL Vs Term Vs Whole Life

The cost of a term vs. variable universal life insurance policy for a 55-year-old female who is in good health and needs $500,000 in protection is compared below.

As you can see, having universal life insurance as opposed to term has its benefits, especially if your family is known for its longevity.

When I talk to a customer in a situation like this, and we consider the advantages and disadvantages of guaranteed universal life vs. term, we typically choose the GUL.

Also, you can compare the costs of guaranteed universal life insurance with whole life insurance to evaluate the advantages of permanent life insurance.

Is Applying For a GUL policy Different than other life insurance

Excellent questions, but NO!

In actuality, the underwriting procedure for applying for Guaranteed Universal Life Insurance is the same as for a standard term.

You’ll have to take a test, for instance. A report of the inspection may also be required, depending on the insurance’s age and whether it is a multimillion-dollar policy.

Overall though, it normally takes 30 days to process and approve.

Please feel free to contact me at 855-380-3300 if you have any questions. I’ll explain this product in a straightforward manner using common sense.

My top 5 GUL carriers are listed below:

  • AIG
  • Protective Life (Cash Back)
  • National American (Living Benefits)
  • N. American (Living Benefits)
  • Group Financial Lincoln

What Is No Lapse Guarantee Life Insurance

No matter how well the policy performs in practise, coverage must be maintained by paying the No-Lapse Guarantee premium.

No one can predict until it happens during this time when premiums are guaranteed not to lapse even if cash values decrease and stay at or close to their current rate for years on end without significantly fluctuating, along with other potential risks like claims costs increasing unexpectedly high because they are unpredictable events.

In order to give yourself peace of mind before death knocks, it becomes crucial when purchasing life insurance as soon as you start making plans concerning retirement income needs (literally).


The article’s thesis is that assured universal life insurance is distinct from term life insurance.

GULs are among your finest choices if you’re seeking for a permanent policy because they offer flexible coverage options at affordable costs.

And once a person has been authorised for a GUL, there won’t be any need for another round of physical testing or waiting periods before getting payments if death were to occur, in contrast to GUAs, which require medical underwriting on an annual basis to preserve their guarantee status!

They are consequently cheaper than other other types of plans. Please contact us if you have any queries regarding these types of policies; we’ll do our best to respond!

You should keep in mind that a GUL has a non-guaranteed surrender value. And always discuss the distinctions between guaranteed and non-guaranteed life insurance with your independent agent!