What is guaranteed universal life insurance?

Learn the differences between guaranteed and non-guaranteed universal life insurance. 

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What is guaranteed universal life insurance?

Guaranteed universal life insurance is a type of long-term life insurance that can provide lifetime protection and carries a guaranteed1 death benefit. When you purchase the policy, you have the ability to tailor premium payments and payment schedules to your needs, within limits. The death benefit and the benefit period are guaranteed to perform as the policy has been illustrated to you, as long as you make your scheduled payments in full and on time and you do not have any outstanding loans or partial surrenders that reduce your policy’s available cash surrender value. 

Why would you want/need 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. 


Guaranteed Universal Life vs. Non-Guaranteed Universal Life

Guaranteed Universal Life

Non-Guaranteed Universal Life

Policy will not lapse (be canceled) even if the policy’s cash surrender value does not cover the monthly policy charges. The benefit will remain in effect unless the guarantee value is less than or equal to zero, or if the cash surrender value does not cover the monthly deduction charge AND the policy has an unpaid loan. If your policy is underfunded for any reason, we will keep the coverage in place but reduce the length of your benefit period. 

The cost of coverage is not guaranteed.

Fluctuations in interest crediting rates do not impact policy performance.

Fluctuations in interest crediting rates will impact policy performance.

Coverage lasts anywhere from 20 years to your entire lifetime. (Must be at least 20 years.)

You have the flexibility to adjust the amount and frequency of your premium payments (within limits), and even to increase or decrease your policy’s coverage.

What are the 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 some alternatives that 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.2

  • 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.3 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. 

How does guaranteed universal life insurance work?

As long as you meet the premium payments and payment schedule you chose at purchase, a  guaranteed universal life insurance policy offers a death benefit and premium payments that will not change over time. You pay the same premium for the entire duration of the policy.1 Your guaranteed benefit will be paid should you die within the guarantee benefit period as long as you make the scheduled payments agreed upon when you purchased your policy—and you don’t take any unpaid loans or partial surrenders. Face amount increases are not allowed on Custom Universal Life Guarantee policies, however, but decreases are permitted after the first policy year. 

What are the benefits of guaranteed universal life insurance?

The key benefits of guaranteed universal life include:  

  • No-lapse guarantee: Policy will not lapse; as long as you pay your premiums in full and on time, you’ll have coverage. 

  • Age limit on premiums: You can create a premium payment schedule that fits your lifestyle. You can customize to most ages: 90, 95, 100, 110, or even 121. If you choose a guarantee period that turns out to be shorter than your lifetime, you risk a substantial premium increase in the future if you wish to continue the guarantee beyond the expiration date you originally chose.

How much more does it cost?

The cost of guaranteed universal life insurance depends on how much coverage you need and how long you want to pay the premiums. 

How do you pay for life insurance?

Most insurers allow you to pay your premiums by electronic transfer or check, but accepted payment methods vary by insurer. Ask your agent to confirm your payment options. 


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.

2Accessing the cash value of the policy for special purposes will reduce the available cash surrender value and the death benefit.

3Additional 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