Guaranteed universal life insurance is insurance that is somewhere in between term life and whole life insurance. Despite its benefit, this insurance makes up a percentage of health insurance sales in the United States. This is because Americans are not very knowledgeable about it. This post contains the top things you should know about guaranteed universal life insurance. Some may surprise you.
Guaranteed universal life insurance is cheaper compared to whole life insurance. It is perfect for senior citizens not interested in cash value. It is similar to term life insurance in this regard. Remember, term life insurance allows a specific premium payment with cash accumulation. GUL is like this too. Only that, it lasts as longer than term life insurance. Hence, it is cheaper than whole life but more expensive than term life insurance.
Little or No Cash Accumulation
Whole life insurance is a cash value insurance, which is more or less like an investment. Some of the proceeds are diverted into special accounts over time. The accumulated cash is taxable. But that’s not the issue with guaranteed universal life insurance. The premium remains the same and doesn’t accumulate over time or has little accumulation tendencies. Hence, it is not taxable.
It Last as Long as Whole Life Insurance
Although GUL is somewhat in between term life and whole life, it is similar to the whole life insurance when considering the expiration period. Whole life insurance lasts throughout the policyholders’ life, and so does GUL. It lasts between 90 and 121 years. Honestly, it is hard to outlive the age range of the policy.
In rare cases, you can choose a lower expiration date. The lower the expiration date, the lower the insurance cost.
It Works Best for Older Citizens
Typically, life insurance is based on age and health conditions. So it may be a real hassle getting insurance as a senior citizen. You want to consider the cost and policy length. Term life is not the best for them because it doesn’t last long. Whole life may not be an option considering the cost. GUL seems to be the only viable option for older citizens regarding cost and policy expiration date. It uses term rate even when it is no longer available for them.
Flexible Premiums and Benefits
Another appealing thing about guaranteed universal life is its flexibility for premiums and benefits. Policyholders can adjust their coverage, the cost, premium payment frequency, and policy expiration. Also, unlike term life, GUL refunds all or part of the paid premiums when the policy is canceled or expired within the specified time.
There is always the right kind of life insurance for you, regardless of your age or health condition. You need the right information. At Randy Jones Insurance, we offer the right coverage you need. You can contact us for more inquiries. Get a free quote from us today!