Guaranteed Universal Life Insurance | GUL Pros And Cons

Heidi Mertlich Heidi Mertlich Posted in Types
Last updated on June 30, 2020

Highly popular, guaranteed universal life insurance offers long-term protection and affordable premiums.

Before you apply, it is a good idea to uncover the details of this form of coverage – to make sure it matches your needs.

Everything you need to know about guaranteed universal life insurance is found here – including an overview, what’s good, what’s bad, sample rates, and frequently asked questions.

Table Of Contents

  1. Overview
  2. Pros
  3. Cons
  5. Companies
  6. FAQs
  7. How to Buy

Guaranteed Universal Life Insurance Overview

To start, let’s uncover the foundational aspects of this type of life insurance.

What is guaranteed universal life insurance?

Guaranteed universal life insurance, or GUL, is an affordable type of life insurance that offers longterm protection, level premiums, and a no-lapse guarantee.

There are seven key components to be aware of.

guaranteed universal life insurance

1. GUL is a bridge

Considered a sweet spot between term and whole life, guaranteed universal life insurance offers (almost always) lifelong coverage, without the expensive aspects of whole life insurance.

Guaranteed universal life insurance is affordable coverage that won’t expire.

In other words, a GUL policy bridges the gap between cheap temporary coverage (term) and expensive permanent coverage (whole).

It is an ideal type of coverage for many – none of the frills that whole life offers, and coverage that is still in force when you need it most.

2. Level premiums

Unlike other forms of universal life insurance, a GUL policy includes level premiums.

What does that mean? Your premium payments remain the same for the life of the policy.

Level premiums are typical for traditional term and whole life insurance.

Other types of coverage, like variable or indexed universal life insurance, offer more premium flexibility. 

That being said, depending on the specific GUL policy, you do have the option to adjust your premium amounts. 

Note – some GUL policies allow you to pay up your policy early.

3. Limited cash value

There is limited cash value to guaranteed universal life insurance.

To make the policy more affordable, GUL policies have minimal cash values.

What is cash value? Separate from the death benefit, cash value is an additional component to most permanent life insurance policies that can be accessed via loans or withdrawals while the insured is living.

If you have no interest in utilizing the cash value of a life insurance product, a GUL policy could save you money.

Note – recently, additional GUL products have come onto the market in which the premiums cost a little more and do include some cash-value.

4. Lasts your whole life

At the time of purchase, you will select a specific age in which the policy will expire: age 90, 95, 100, 105, or 121.

So, in that sense, GUL is technically not permanent life insurance. The policy will, almost always, outlive you, however.

Selecting an older age, 121 for instance, will cost more than selecting a younger age for the policy to expire.

5. Affordable

Your premiums are more affordable than permanent life insurance products, thanks to the simplistic design of the policy.

Guaranteed universal life insurance generally has little or no cash value. Because of this, it’s the cheapest kind of universal life insurance you can buy. Forbes

With a no-frills strategy, a GUL policy focuses on the death benefit – financial support for your loved ones or business partner – and not living benefits. This makes your policy cost less.

6. Flexible death benefit

Often, a guaranteed universal life insurance policy includes a flexible death benefit.

What does the mean? If the financial needs of your beneficiaries change over time, you may have the option to reduce the death benefit.

If your finances change and you need to lower premium payments, this option becomes advantageous.

Adjusting the death benefit will not impact your coverage guarantee period.

7. No-lapse guarantee

The no-lapse guarantee means that your policy’s death benefit is guaranteed to the selected age you purchased, such as 121.

In fact, GULs are sometimes referred to as no-lapse guaranteed universal policies.

Even if the cash-value of your GUL policy is zero, the life insurance company guarantees your coverage remains in force.

Guaranteed Universal Life Insurance Features

Level PremiumsYes
Cash ValueModest
Lifetime ProtectionAlmost always
Adjustable Death BenefitOften
Face AmountWide range available
Required Medical ExamOften
Individual policies may vary

What Is Good About Guaranteed Universal Life Insurance?

There is a lot that is good about this form of coverage.

Longterm affordable coverage

If you are interested in life insurance that will last until you die and don’t want exorbitant premium payments, consider the GUL policy.

In fact, seniors looking for life insurance often settle on guaranteed universal life insurance for this reason – they need coverage that will outlive them and not break the bank.

Guaranteed tax-free death benefit

As long as your premium payments are made, your policy remains in force – known as the no-lapse guarantee.

Further, the death benefit is tax-free, just like almost all life insurance policies. In contrast, funds from an estate are often subject to taxes.

Not subject to market fluctuations

Different from other universal life insurance products, a GUL has no market exposure. Your cash-value, although likely minimal, is not affected by stock market performance.

Remember, a GUL is simplistic in design.


Like most forms of life insurance, you can add riders onto your GUL contract.

What are riders? They are helpful contractual provisions in addition to the death benefit. Riders make all the difference during a difficult time.

For instance, most carriers offer the following riders for the GUL products:

  • Accelerated death benefit – the option to access a percentage of your death benefit if diagnosed with a terminal illness.
  • Accidental death – an additional death benefit paid if death occurs as the result of a qualifying accident.
  • Children’s term – provides term life insurance to eligible children.
  • Waiver of premium – the option to forgo premium payments after experiencing a total disability.

Depending on the particular company and policy, additional riders are also available.

What Is Bad About Guaranteed Universal Life Insurance?

GULs are not for everyone.

No significant cash value

Your policy will not accumulate significant cash value in all likelihood.

Depending on your goals, the savings component (cash value) of a life insurance contract can be advantageous:

  • Policy loans
  • Policy withdrawals

Cash accumulation does make premium payments more expensive. However, those monies may make all the difference should you need to finance a major purchase or access funds during a hardship.

More expensive than term

GULs are less expensive than permanent products but cost more than cheap term life insurance.

If you only want temporary coverage, such as while you are raising a family, a GUL may not be your best bet. Term will cost less and ends after a certain number of years (e.g. 20-year term).

Less options than other universal products

GULs are uncomplicated by design. In fact, a GUL is more similar to term life insurance than its universal counterparts.

Other universal products, like variable universal life (VUL) or indexed universal life (IUL) offer more flexibility and features.

For example, VULs and IULs provide market exposure, either directly or indirectly, for the possibility to grow your cash value.

These products also feature an adjustable death benefit and premiums.

Guaranteed Universal Life Insurance Quotes

To gain a general idea of cost, consider the following sample rates.

Keep in mind, however, your individual quote will vary and depends on your age, health, and policy specifics.

Quotes are for healthy applicants. Smokers will be charged more. Rates are for annual premium amounts

Guaranteed Universal Life Insurance Quotes Male

20 year old$417.65$840.00$1,505.00
30 year old$518.48$1,126.95$2,063.40
40 year old$733.99$1,683.20$3,015.00
50 year old$1,105.00$2,425.00$4,570.00
60 year old$1,709.00$3,905.00$7,645.00
70 year old$3,066.00$7,172.50$13,925.00
80 year old$6,615.00$15,652.50$30,890.00
85 year old$10,626.15$26,477.47$52,841.18
Annual rates. Samples only. Up to age 121.

Guaranteed Universal Life Insurance Quotes Female

20 year old$370.60$727.50$1,315.00
30 year old$439.36$982.67$1,743.34
40 year old$623.29$1,332.50$2,545.00
50 year old$941.00$2,050.00$3,950.00
60 year old$1,499.00$3,402.50$6,610.00
70 year old$2,619.00$6,127.50$12,015.00
80 year old$5,583.00$13,225.00$25,780.00
85 year old$8,353.93$20,771.44$41,520.83
Annual rates. Samples only. Up to age 121.

Best Guaranteed Universal Life Insurance Companies

Many life insurance companies offer guaranteed universal life.

The following eight carriers are highly-rated.

American National Life Insurance Company (ANICO)American-National accelerated underwriting

Product name: Signature Guaranteed Universal Life

Whether you only need coverage to a certain age or a guarantee that can last a lifetime, you can select the guarantees that work for you. – American National

Product at a glance

  • Guaranteed death benefit up to age 121
  • Issue ages: 0 – 85
  • Minimum face amount: $25,000
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • Cash-out options at years 15, 20, and 25 with living benefits

AIG Life Insurance Company

Product name: Secure Lifetime GUL 3

Thanks to the tax-advantaged power of guaranteed universal life insurance, Secure Lifetime GUL 3 provides protection you can count on for your family or your business. – AIG

Product at a glance

  • Guaranteed death benefit up to age 121
  • Issue ages: 18 – 80
  • Minimum face amount: $100,000 (restrictions apply)
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • Option to surrender policy with a return of premiums

Further reading: AIG life insurance review

North American

Product name: Custom Guarantee

With North American Company’s Custom Guarantee universal life insurance policy, what you buy today is what we deliver whenever it’s needed. – North American

Product at a glance

  • Guaranteed death benefit up to age 120
  • Issue ages: 0 – 85
  • Minimum face amount: $50,000 ($25,000 for ages 60 – 85)
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • Guaranteed exchange privilege

Further reading: North American life insurance review

Prudentialprudential life insurance

Product name: PruLife Universal Protector

UL Protector features a built-in death benefit guarantee, which means the policy will remain in effect to provide a generally income-tax-free death benefit for your loved ones until you die – whenever that may be. – Prudential

Product at a glance

  • Accelerated underwriting available (no medical exam)
  • Guaranteed death benefit up to age 121
  • Issue ages: 0 – 85
  • Minimum face amount: $50,000 ($100,000 for ages 76 – 80; $250,000 for ages 81 – 85)
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • Adjustable no-lapse guarantee period

Further reading: Prudential life insurance review

Bannerbanner life insurance

Product name: Life Step UL

Life Step UL is a flexible premium universal life policy plan that provides lifetime guaranteed coverage with provisions for guaranteed cash values. – Banner

Product at a glance

  • Guaranteed death benefit up to age 121
  • Issue ages: 20 – 85
  • Minimum face amount: $50,000
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • Extended maturity date (beyond age 121) available

Further reading: Banner life insurance review

Mutual of Omahamutual of omaha

Product name: Guaranteed Universal Life

Mutual of Omaha Life Insurance Company offers GUL, GUL Plus, and GUL Express life insurance policies. All pay proceeds to the beneficiary and offer similar riders/provisions and options. – Mutual of Omaha

Product at a glance

  • Simplified issue available (GUL Express)
  • Multiple GUL products available
  • Guaranteed death benefit up to age 120
  • Issue ages: 18 – 80
  • Minimum face amount: $100,000 ($50,000 for ages 66 – 85)
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • Catch-up option for late or skipped premium payments


Product name: Custom Choice UL

With benefits similar to term, Custom Choice UL℠ offers the flexibility of a universal life policy. – Protective

Product at a glance

  • Death benefit period ranges from 10 to 30 years; similar to term
  • After the initial level period, death benefit decreases and premiums remain level
  • Premiums and charges discontinue at age 121
  • Issue ages: 18 – 75
  • Minimum face amount: $100,000
  • Minimal cash value
  • Some policy flexibility
  • Multiple riders available
  • Income provider option pays monthly or annual income for up to 30 years

Further reading: Protective life insurance review


Product name: Sage No Lapse Universal Life

Our Sage No Lapse Universal Life product is a competitively priced, universal life insurance policy that offers affordable coverage for life. – Sagicor

Product at a glance

  • No medical exam underwriting available
  • Guaranteed death benefit up to age 121
  • Issue ages: 16 – 85 years
  • Minimum face amount: $25,000
  • Modest cash value
  • Some policy flexibility
  • Multiple riders available
  • The potential to be approved within minutes

Frequently Asked Questions

FAQs about guaranteed universal life insurance and their unbiased answers.

Who should buy a GUL policy?

Guaranteed universal life insurance is an excellent fit in many situations.

In particular, consider the following scenarios in which a GUL is often the best life insurance option.

Who should not buy a GUL policy?

There are two primary reasons someone should skip purchasing a GUL policy.

First, if your life insurance needs are only temporary, term coverage will be more affordable.

Second, if you are interested in utilizing the cash-value of a life insurance contract for loans or withdrawals, look to other permanent products, such as traditional whole life insurance.

What company offers the best GUL?

Your specific needs and goals will determine the best life insurance carrier to apply with.

To start, you will want to analyze:

  1. Your overall health
  2. Purpose of the policy
  3. Financial needs of your beneficiary
  4. Length of time coverage is needed

Based on your unique situation, an independent agent will compare and contrast the best carriers and their rates to find the ideal policy.

How To Buy

Plan to do two things in order to buy a guaranteed universal life insurance policy, or any form of coverage for that matter.

First, most importantly, collaborate with an independent agent.

Why? It is in your best interest to have access to multiple policies from multiple carriers. Applying directly with one company hinders your ability to find the GUL policy that meets your needs.

Second, be prepared for the application. That way, the purchasing process is streamlined.

In particular, jot down any major health issues you have, medications you take, your physician’s contact information, your annual income, and your beneficiary’s name and address.

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