LIFE INSURANCE
Universal Life and Guaranteed Universal Life
Universal life is permanent insurance with flexible policy mechanics. Guaranteed universal life, or GUL, is commonly structured to emphasize a long-term death-benefit guarantee rather than cash accumulation.
How Universal Life Works
Universal life policies combine a death benefit with an account value and policy charges. Premium flexibility can be useful, but the policy still has to be funded sufficiently to support the coverage. GUL policies may provide stronger death-benefit guarantees when required premiums are paid on time.
What to Consider Before You Choose
- Understand exactly what is guaranteed and what depends on interest-crediting assumptions.
- Ask how premium changes or missed payments could affect the duration of coverage.
- Do not assume a flexible premium means premiums are optional.
- Compare GUL with whole life when permanent death-benefit certainty is the main goal.
Who Often Considers Universal Life
Universal life can fit people who want permanent coverage with more flexibility. GUL can be especially relevant when the goal is a permanent death benefit rather than building significant cash value.