In general, the cost of a GUL policy typically falls somewhere in between term and whole life coverage. The actual price will depend on a variety of factors such as your age, health, the amount of coverage needed, and how long you would like it to last. To find out for sure, please consult a New York Life agent.
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What is guaranteed universal life insurance?
Learn about the differences between guaranteed and non-guaranteed universal life insurance and see which type of coverage may be right for you.
What is guaranteed universal life insurance (GUL)?
Guaranteed universal life insurance (GUL) was created as a cost-effective way for people to get long-term protection they can count on. Depending on your needs, you can secure coverage that lasts anywhere from 20 years to the rest of your life. But what makes this protection different from traditional universal life policies is that the death benefit and length of coverage you choose are 100% guaranteed1 (provided you make your scheduled payments in full).2
How does guaranteed universal life insurance work?
With a guaranteed universal life policy, you get a unique combination of long-term protection and flexibility, within limits. That’s because these policies let you set your premium payments, payment schedule, and death benefit at the time of purchase. As long as you maintain your policy as specified, your level of protection and cost of insurance will always remain the same.
Note: With New York Life’s Custom Universal Life Guarantee policy, you can reduce the death benefit after the first policy year, but increases in coverage are not allowed.
The pros and cons of guaranteed universal life
GUL insurance policies have a lot to offer people who need dependable, long-term protection—but there are some trade-offs to consider when comparing to traditional (non-guaranteed) universal life coverage.
Advantages of GUL
- Guaranteed death benefit protection (provided premiums are paid in full and on time).
- You decide how long you want your coverage to last (anywhere from 20 years to the rest of your life).
- Premiums remain fixed once you choose a payment schedule.
- Reductions in interest crediting rates will not affect the policy.
- If the policy is underfunded for any reason, it will not be canceled. (However, the benefit period/length of coverage will be reduced).
Disadvantages of GUL
- Death benefit can only be decreased (never increased).
- Little to no potential for cash value accumulation.
- Increases in interest crediting rates will not help the policy.
- Premium payments and schedules cannot be adjusted after purchase.
- If you outlive the guarantee period you selected and want to keep your coverage, you may face a substantial premium increase.
Reasons to consider guaranteed life insurance
With a guaranteed universal life insurance policy, your premiums can be fixed, so you don’t have to worry about the price going up. You get the peace of mind that comes from knowing that your premiums won’t change, as long as you pay them on time and in full. Of course, if you make changes to the policy or skip premium payments, the length of the benefit guarantee may be shortened.
What are some alternatives to guaranteed universal life insurance?
Now that you know the difference between non-guaranteed and guaranteed universal life insurance, you may want to know more about other insurance policies that could be right for you. Here are a couple of alternatives you may want to consider:
- Whole life insurance comes with several guarantees:1 Provided premiums are paid in full and on time, the death benefit will never be less than the face amount of the policy; your premiums will never increase, regardless of changes in your health, your age, or the economy; and the cash value in your policy is guaranteed to grow. So, you get permanent lifetime protection with access to the policy’s cash value when you need it.3
- Term life insurance locks in your immediate protection and gives you access to features like the option to convert to permanent coverage in the future if your life changes.4 You choose exactly how long you want coverage, so you can match your coverage length with significant milestones, like paying off a mortgage or covering your children’s college education. With term life, you have the flexibility to construct coverage to fit your family’s needs and budget.
Guaranteed universal life insurance FAQs
Since whole life and universal life (both guaranteed and non-guaranteed) are able to provide lifetime protection, they fall into the category of “permanent” life insurance coverage. In the case of universal life, however, you will need to select your benefit period carefully if you want to make sure your coverage will last for the rest of your life.
While the “G” in GUL stands for guaranteed, it does not mean that you are assured coverage (as in the case of guaranteed issue life insurance). In this case, the guarantee applies to the death benefit and the amount of time you are covered.1
It is possible to fully or partially surrender a GUL policy; however, doing so will eliminate your coverage or significantly shorten your coverage period. The possibility of surrender charges should be considered as well.
Most insurers allow you to pay your premiums by electronic transfer or check, but accepted payment methods vary. A New York Life agent will be happy to review all your payment options.
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Want to learn more about guaranteed life insurance?
A New York Life financial professional can help determine what’s right for you.
1All guarantees are based on the claims-paying ability of the issuer.
2The death benefit and benefit period are guaranteed, as long as there are no outstanding loans or partial surrenders that reduce the policy’s available cash surrender value.
3Accessing the cash value of the policy for special purposes will reduce the available cash surrender value and the death benefit.
4Additional guidelines for term conversions, such as timing, may apply.
In Oregon the Policy Form Number for New York Life Custom Universal Life Guarantee is ICC18-318-54P.