Accelerated Benefits: Chronic or Terminal Illness

Most people think of life insurance as money for your loved ones after you die. But what if you need the money while you’re still alive? Being diagnosed with a serious chronic condition or terminal illness can drain your finances quickly. Chronic and Terminal benefit riders allow you to access your death benefit for qualified illnesses without paying taxes.  Why are they tax-free? Because it is a prepayment of your death benefit.

You decide what you want to spend your accelerated benefit dollars for: for instance, you could apply the cash toward big medical expenses or paying off other kinds of debts. Some people have even used the money for a dream vacation, allowing them to treasure the time they have left with family and friends and create memorable experiences.

After your death, depending on the portion of the policy you used, your beneficiaries will receive a tax free payout. 

To qualify for life insurance with living benefits, you’ll just need to check that your condition is considered eligible. 

Some universal life insurance plans let you accelerate part of your death benefit if you have a qualifying chronic, or terminal illness health event in states where available. This benefit could allow you to access up to 50% of your death benefit while you are alive.

Electing to receive accelerated benefits will impact your death benefit. The net amount paid to heirs depends upon any amounts you may have previously received through accelerated benefits, withdrawals, and/or loans.

Insurance should be made for living – first for you, then your heirs. 


Got questions? Reach out and chat with us! Or give us a call a 855.290.0529. 
At Everly, we’re here to help.


The information provided is general in nature, is not tailored to your needs, and is not intended to be tax or investment advice. For legal, investment, accounting, or tax advice, consult the appropriate professional. This information does not reflect the availability of products or product features unless specifically stated, nor does it alter the terms, conditions, exclusions, or limitations of policies issued by Security Benefit Life Insurance Company.

What happens if you need life insurance money while you're still alive?  Learn more about options you may have here.

Life Insurance with Living Benefits: What You Should Know

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The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company.

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Guaranteed acceptance life insurance is an option for most individuals aged 40 to 80, offering coverage without the need for medical exams or health inquiries. As the name suggests, approval is typically assured, regardless of your health history. These life insurance policies typically provide smaller death benefits, ranging from $2,000 to $25,000, and are commonly chosen to cover final expenses such as funeral costs. However, there are some drawbacks. There's usually a waiting period before the death benefit is available, and payouts may be limited in the initial years. Additionally, the cost of a guaranteed life insurance policy tends to be higher.

Guaranteed acceptance life insurance typically allows for insurance coverage without the need for medical exams or health inquiries. Learn more about the pros and cons.

What is “Guaranteed Acceptance Life Insurance”?

Guaranteed acceptance life insurance is available to most people ages 40 to 80 years old, and purchasing this type of life insurance does not require undergoing any medical exams or answering health questions.



Understanding Life insurance Solutions that are Guaranteed


Guaranteed acceptance life insurance is available to most people ages 40 to 80 years old. Purchasing this coverage does not require undergoing any medical exams or answering health questions.

As the name of this policy implies, acceptance for life insurance coverage is guaranteed—regardless of your health history—which is its main selling point. You won’t have to answer questions about prior medical issues or ongoing ones, and typically you won’t be turned down for a life insurance policy, though there may be certain exceptions. In most cases, you are guaranteed insurance approval. This kind of insurance coverage is ideal for some people’s life circumstances, and getting a quote for life insurance rates is typically easy. Because the insurance application process is simple, guaranteed insurance is also very convenient.



Is Guaranteed Acceptance Life Insurance the Right Plan for me? 


The right insurance coverage depends on your age and other factors. If you’re younger, for instance, guaranteed acceptance life insurance may not be the coverage that best fits your life circumstances. Younger people may be able to benefit more from the tax-advantaged growth potential of universal life insurance coverage or the lower costs of term life insurance. 


With guaranteed acceptance insurance, there’s usually a longer waiting period before your death benefit may be paid, and the insurance payouts can be limited in the first few years of coverage. Also, guaranteed acceptance life insurance tends to have a higher cost of insurance.


Someone with a medical condition or other lifestyle factors that might make life insurance otherwise unattainable, or who doesn’t mind having a somewhat smaller amount of death benefit coverage, may find greater value in a guaranteed acceptance life insurance policy.



How Much Coverage is Available in Guaranteed Life Insurance? 


Guaranteed life insurance policies tend to have lower death benefit amounts, typically $2,000 to $25,000. Typically, guaranteed life insurance policies are purchased as a final expense policy to cover things like funeral costs. 

How the Death Benefit Works with Guaranteed Life Insurance


The death benefit for guaranteed acceptance insurance is reduced for the insurance policy’s first few years. If you die within that time period (for a reason other than an accident), your insurance beneficiary may receive a reduced amount—or in some cases, they will only receive a refund of the insurance premiums paid, plus any applicable interest. Although this type of insurance is guaranteed, the amount of insurance coverage may not always cover your final expenses, such as funeral costs.

The Pros of Guaranteed Acceptance Life Insurance


Having a guaranteed issue life coverage plan can help offer peace of mind, with several advantages:


●     The application process for guaranteed acceptance life insurance is straightforward, and you can apply with the assurance of receiving insurance coverage.

● 	Guaranteed issue life policies do not require a medical examination or complex declarations of your previous medical history.  



The Cons of Guaranteed Acceptance Life Insurance


Guaranteed issue life insurance does have potential downsides, which include the following:


● 	The maximum coverage values available may be lower when compared to other kinds of life insurance coverage.


● 	Insurance beneficiaries may not receive a payout or may be granted a lower benefit if you pass away within a short period after purchasing your guaranteed issue life insurance coverage.  


● 	Insurance premiums for guaranteed issue life coverage may not be cost-effective when compared to the death benefit.


● Most guaranteed issue life insurance products are only available up to a maximum age. If you need advice about choosing the life insurance coverage that is right for you, you should speak to a trusted financial advisor or licensed insurance agent.



Why Choose a Life Insurance Policy Offering Guaranteed Acceptance?

Why Choose Guaranteed Acceptance Life Insurance?


There are several scenarios where guaranteed issue life insurance can be a good solution because it is a life insurance policy you can't be turned down for, although the terms and premiums may depend on your coverage requirements.


For example, you may not qualify for whole life insurance coverage based on your age or health, or it may not be a cost-effective option for you. Typically, companies issue life insurance that is guaranteed to help individuals who may struggle to qualify for traditional life insurance. While a guaranteed acceptance life product might offer a lower final payment, it is much easier to qualify for life insurance without any health examinations.


Applicants may choose to purchase a guaranteed issue life insurance product because they would like coverage in place as soon as possible, with minimal inconvenience. In many cases, the payout associated with a guaranteed issue life coverage product might be intended to cover funeral costs or to repay certain debts, loans, and credit cards.


Other situations where this type of guaranteed issue life insurance may be beneficial is if you have a medical condition that potentially could make you ineligible for other coverage solutions, if you have a limited budget to purchase life insurance, or if you only need modest insurance coverage.



Cash Value Life Insurance Policies: What Is a Cash Value Life Insurance Policy?

Guaranteed acceptance life insurance is available to most people ages 40 to 80 years old, provided they qualify for coverage.

Life Insurance Solutions: What is “Guaranteed Acceptance Life Insurance”?

A universal life insurance company provides flexible life insurance coverage, where the policyholder is responsible for managing their contributions and adjusting their payments according to their circumstances and financial position (as long as the required minimum payment is met). 

Is universal life insurance the same as whole life insurance? No–whole life coverage is sold with a fixed monthly premium payable with a potential to grow cash value and a death benefit payable to beneficiaries when the insured person dies. However, some consumers may find that premiums can become unaffordable at certain points in their lives, and there is no scope to increase the policy value in the future (however, you can apply for additional coverage). 

Like whole life coverage, universal life insurance policies are designed as long-term protection against premature death, and can potentially accumulate cash value over time. The difference is that the end value of the policy will depend on how much the policyholder chooses to pay into the savings portion of their policy. Universal life offers the ability to grow cash value with more flexibility than whole life, since the policy holder can decide how much or how little they want to contribute to their cash value once the minimum payment is met to keep coverage in place (the cost of insurance includes any underwriting fees and expenses).

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The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company.

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

A universal life coverage product is a type of life insurance structured around your needs. It can feature adjustable premiums, the ability to grow cash value, and a death benefit payable to the beneficiary of your choice. 

Universal life insurance: adjustable premiums, possible cash value growth, death benefit to chosen beneficiary.

Why Universal Life Insurance Coverage May Be a Good Option

There are multiple scenarios where the flexibility of universal life coverage can be more appealing than the fixed premiums in a whole life product. Examples might include: 

Needing a policy that allows flexible payments. All products have minimum contribution thresholds that must be maintained, but universal life can offer flexible payments as long as minimum payments are met. 

Wanting a more accessible financial entry-point into life insurance. Depending on your circumstances, whole life coverage can be more expensive than universal life coverage, and may be outside of your budget.   

Anticipating a higher income in the future. When you apply for whole life coverage, the cash value growth potential is defined. Those who expect to earn more later on can decide whether to make larger deposits within a universal life plan, but whole life values are fixed. 


When you make a payment into your universal life policy that is above the minimum required payment, the insurance provider will deduct any administrative charges linked to the cost of the coverage and deposit the balance into your policy’s cash value. 


Over time, that cash value can grow and earn interest, which you may be able to take out a loan or withdrawal from if you encounter unexpected expenses.  

What Are the Potential Drawbacks of Universal Life Insurance Plans?


The primary issue associated with the flexibility of universal life coverage is that the policy must be adequately funded to remain valid, so there are always minimum payments that need to be met. Underfunded policies may lapse, or the policy holder may need to pay a substantial amount to make sure the policy stays in force.  

Likewise, the cash value is not guaranteed, and it is worth comparing the interest rates offered to ensure a particular product meets your financial needs. Choosing a product with a competitive minimum interest rate may be a good option.

How Does a Universal Life Coverage Death Benefit Work?


Most universal life insurance products allow you to adjust your premium payments, as long as minimum premiums are met.  

You can select universal life insurance coverage that offers a level death benefit, whereby the death benefit is fixed for the duration of the policy, and any additional funds are channeled into your policy’s cash value. However, this type of policy does not increase the overall death benefit. If the cash value hasn’t been accessed at the policy holder’s death, or hasn’t been used to help pay premiums, any remaining cash value would revert to the insurance company. 

An alternative is to have an increasing death benefit (although not every company offers an increasing death benefit). In this case, any accumulated cash value is added to the amount payable to your beneficiaries, provided no loans or withdrawals have been made against the cash value. This product feature often commands higher premiums than a level death benefit. 

You may also apply for increased coverage at a later date. However, this may require a medical exam. Most insurance companies also require policyholders to have maintained their policy for a minimum period before they can make changes to their policy.

A universal life coverage product is a type of life insurance structured around your needs. It can feature adjustable premiums, the ability to grow cash value, and a death benefit payable to the beneficiary of your choice. Read more.

Insuring yourself and your family against the unexpected is important. Having life insurance in place can help provide assurance that you’ll have a financial safety net should something unexpected happen to the primary breadwinner of a family.  For instance, universal life (UL) insurance coverage can help you take care of your family, even when you’re no longer living. In addition to providing lifetime protection, a UL policy can also help you save money because of the built-in savings component this type of product typically offers. Before purchasing UL coverage, it’s a good idea to familiarize yourself with the characteristics of Universal Life products, how they work, and the benefits they offer.  

The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company. 

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Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Universal life insurance is a permanent life insurance policy that offers flexibility along with an opportunity to grow cash value.

Learn the basics of universal life insurance: flexibility, growing cash value, & permanent protection. A simple way to help protect your family.

Universal Life Insurance Policies Explained

Universal life insurance is a type of permanent coverage that stays in effect for the lifetime of the policy owner. To keep it current, you need to make your regular premium payments promptly and make sure that if you take a loan or a withdrawal from the policy, enough cash value remains to keep the policy in effect.  

When you apply for a life insurance policy, you will need to provide some medical information. This is often collected online via the health questions on the application, although in some cases this will require an in-person visit with a health professional. You’ll also need to choose your beneficiaries. Providing your beneficiary information is important so you can ensure the right people receive the death benefit when you pass away. Apart from protecting the welfare of your family and loved ones after you’re gone, a UL product can usually build cash value. Simply put, cash value is the portion of your policy that earns interest. 

This way, you can earn some extra money within your insurance policy, which can help you take care of yourself and your family while you’re still alive. Unlike other types of insurance policies, a UL policy is quite flexible in terms of adjusting premium payments – as long as you continue to meet the required minimum payment outlined in your particular policy. 

For example, if you were to lose your job or have another type of financial emergency and you couldn’t afford your current premium, you might be able to use your existing cash value to pay your premiums until you’re back on your feet. However, it’s important to note that it usually takes some time for a product to accumulate cash value. The longer you save, the more money you can accumulate. 

Yet policy owners should also understand that using your cash value to help pay premiums will reduce the overall cash value. And, it’s important to understand how much cash value you have to access – if you are relying on your cash value to pay your premiums and deplete the cash value, there is a danger your policy might lapse. It’s important to be proactive and understand how your policy works. You should consult with your insurance agent on the parameters of the policy and ensure you understand how to access cash value and any restrictions or limitations. In most cases, if you have exhausted your cash value and you still can’t pay premiums, your policy will lapse and your coverage will end. 



How Are Universal Life Insurance Premiums Calculated?

Here are the main considerations your insurer will take into account when calculating how much someone pays for their policy:


The death benefit is what the insurance company pays to your beneficiaries when you die. This is usually paid in a lump sum, and is tax-free in most cases. Typically, the larger your death benefit, the more you will pay for your policy. For example, a policy that offers a $100,000 death benefit would be less expensive than a policy that offers a $500,000 death benefit. Death benefits (also called face amounts) are generally limited based on income. 

Some insurance companies offer two different kinds of death benefits – level and increasing. A level death benefit, as you might expect, stays the same throughout the life of the policy. An increasing death benefit means that the death benefit could increase based on any cash value that accumulates over the course of the policy. (Of course, this assumes the policy owner hasn’t taken any loans or withdrawals from the policy that might impact the death benefit.)  


Your insurer will consider your current health condition and age to determine how much you should pay in UL premiums. If you have a chronic medical condition or have a lifestyle that puts your life at greater risk or if you’re in your twilight years, your premium will be higher than that of a young, healthy policyholder with no risky habits or hobbies. And in some cases, a specific medical condition could make someone ineligible for coverage. Each product offered by an insurance company has specific issue ages (for example, if issue ages are 18-50, a 55-year-old would not qualify). Insurance companies also have specific underwriting requirements when considering the individual health status of an applicant. 


Simply put, universal life insurance is a permanent life insurance policy that offers flexible premiums and benefits. With this policy, you can adjust your premiums (provided the minimum payments are made), grow cash value, and withdraw or borrow cash from your policy. However, it’s always a good idea to seek advice from an experienced life insurance agent or financial advisor before taking any of these steps to avoid creating issues that may be detrimental to your future plans.


What Is Universal Life Insurance in Simple Words?


If you’re a financially-savvy individual looking for a life insurance policy that offers you flexibility and the potential for growth of your cash value, an indexed universal life insurance policy may be a good option. Here's a guide to help you understand more about IUL policy options.


The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company. 

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Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Indexed universal life insurance (IUL) is a type of permanent life insurance that can offer flexibility to policyholders. Indexed universal life insurance protects your family and also accrues cash value. IUL policies offer  flexibility, the potential to accumulate cash value, and protection for your family with a benefit that is payable upon the death of the insured. But some downsides to IUL policies are potential caps on accumulation and additional costs or fees. It's crucial to keep all these factors in-mind when deciding if an indexed universal life insurance policy is right for you.

For financially savvy people seeking flexible life insurance with cash value potential, consider indexed universal life policies.


Indexed universal life insurance (IUL) is a type of permanent life insurance that is often praised for its flexibility for policyholders. An index universal life insurance policy can last your entire life while also building cash value within its accounts. However, these insurance policies can be a little complicated to understand. Indexed universal life policies typically place a portion of the premium payments from the policyholder into an account that has the potential to earn interest that is based, in part, on the performance of a market index - but money isn’t directly invested in the market. So index universal life insurance policies aren't like traditional investing. Some IUL policies also offer a fixed account option that can earn interest at a set rate.


Indexed universal life insurance policies usually function similarly to fixed universal life insurance policies, with the primary difference being in how they accrue their cash value.  


The cash value in an indexed universal life insurance policy is  tied to a market index, whereas in a typical fixed universal life insurance policy, the cash value may accrue using fixed interest rates that are set by the insurer.  


An index universal life insurance policy will usually grow cash value by setting aside a portion of the policyholder’s premium payments and providing the opportunity to earn interest on that amount based in part on the performance of a specified market index. The insurance policyholder’s cash value can grow when the index performance is positive, though, it’s important to note that index interest may be subject to limitations such as a cap or participation rate. However, because this type of insurance policy is not an investment, the cash value is not reduced due to negative index performance.  It is important to note that cash value can be reduced due to the insurance policy’s fees and expenses. 


Many index universal life insurance policies’ cash values will earn a minimum interest rate no matter how the market performs, but some insurance policies will have an interest rate cap. These financial interest rates will usually cap between 8% and 12%, but can vary from insurance policy to insurance policy. It is important to note that it is still possible to experience negative performance in these types of policies due to the effects of insurance policy fees and expenses. 

Fixed Universal Life Insurance Versus Indexed Universal Life Insurance

Essentially, index universal life insurance is not very different from a fixed universal life insurance policy. Both fixed universal life insurance and IUL policies can offer insurance policyholders a great deal of flexibility. Both have a cash value component and a protection  component to the plan, and you may be able to adjust your monthly insurance premiums based on the funds in your cash value. However, IUL policies may offer more growth potential than a universal life policy.

An Indexed Universal Life Insurance Policy Versus Whole Life Insurance

Indexed Universal Life Insurance Vs. Whole Life Insurance


When searching for permanent life insurance policies, ‘whole life insurance’ and ‘indexed universal life insurance’ are two terms you’ll commonly see. Both of these insurance policies aim to provide you with lifelong coverage, but the key distinction between the two is how the cash value grows and the cost of IUL coverage. 


In index universal life, your cash value is tied (in part) to a market index’s financial performance. With whole life insurance policies, it’s more straightforward–it’s life insurance where the cash value earns a set interest rate. You pay your insurance premiums, your policy premiums remain at a fixed rate, and your beneficiaries receive a death benefit after your passing. With whole life insurance, the primary focus is permanent coverage with limited potential to grow cash value, so premiums are typically lower than IUL policy premiums. 


Some insurance policyholders may prefer an index universal life policy over a whole life insurance policy because IUL policies can offer them increased flexibility with greater potential cash value accumulation. Index UL policies may allow insurance policyholders to adjust their premium rates and/or access their cash value while living. 


Who May Benefit From an Indexed Universal Life Insurance Policy?

Families with dual incomes and individuals with higher net worth who are interested in tax-advantaged savings may find index universal life policies appealing, especially if they are seeking flexibility with their life insurance policies.  For these potential buyers, indexed universal life insurance may be a good fit for their objectives. It may be helpful to have strong financial literacy, or to work closely with a professional insurance agent to ensure this type of insurance policy best suits your needs and objectives. It’s important to understand the potential downside of an IUL policy should the underlying financial index not perform well.



Just like with other permanent life insurance policies, index universal life insurance comes with a death benefit. This death benefit is typically not subject to income tax or estate tax, and may not be required to undergo the probate process. The insurance death benefit will be paid out to the named beneficiary(ies) upon the passing of the insured person. This death benefit from the universal policy that helps provide for your family after your death is the primary reason people purchase life insurance. 


From flexible insurance premiums to accessing your cash value when you need it, indexed universal insurance can allow you to take the reins when it comes to your IUL policy. Index universal life insurance  policyholders can increase or lower their insurance premiums (provided their policy values are adequate to sustain the policy) and control the amount they contribute toward their cash value.  


There are insurance policies that can offer a range of optional riders, allowing someone who is shopping for life insurance the ability to find a policy that is best for them and their family. An insurance rider is an addition to an existing insurance policy, which allows you to add features that can help meet your specific life insurance needs. It’s always best to speak with a financial professional or licensed insurance agent for education on these policies and how they may be beneficial to you and your family. 

The Four Ways to Access Your Life Insurance Policy’s Cash Value


With an indexed universal life insurance policy, the amounts credited to the policy’s cash value can grow tax-deferred. Index universal life insurance  policyholders may be able to pay their insurance premiums by using their cash value,  allowing them to stop paying premiums, or to pay smaller premium payments. Some index universal life insurance policies may offer a rider that will allow the cash value to be added to the death benefit upon the passing of the insured.



Certain insurance companies will limit the amount of cash value that can be accumulated within the policy either through a cap, or other mechanism such as a participation rate. 


Because the interest earned on the cash value is tied to a market index, this can have both positive and negative effects on your accounts depending on how that index performs. For example, if the financial index goes down, the insurance policy may not credit any interest to the cash value of the accounts. Check that your insurance policy offers a ‘floor’ on financial losses. A ‘floor’ means there is a minimum interest rate on the indexed account, so in times of negative financial returns, the growth rate credited to the policy will not go below a certain interest rate threshold. While having a floor can help protect against market losses, it is still possible to experience a loss when insurance policy fees and expenses are factored in. Conversely, many IUL policies have a cap – meaning that even if the market performs very well, the cash value you receive may be limited based on your insurance company’s maximum financial cap.


Some insurance policies may charge additional financial fees, which can potentially drain your account’s cash value. Talking to your insurance provider can help you understand the rates and costs of different policies.

Cash Value Life Insurance Policies: What is Cash Value Life Insurance?

For financially savvy people seeking flexible life insurance with cash value potential, consider indexed universal life policies. Read more...

IUL Insurance: What is Index Universal Life Insurance?


Purchasing life insurance post-retirement or in older age may feel complex, with many seniors finding it difficult to qualify with policy eligibility conditions or understand which insurance coverage solutions best align with their priorities. 


Seniors may also believe they cannot buy life insurance protection past a certain age, even if they are healthy. While this may apply to some types of life insurance policies, most seniors can usually find a policy that offers insurance protection for you and your loved ones. 


Guaranteed universal life (GUL) insurance policies may provide the answer, whether they are used as a safeguard for income replacement or to ensure family members are provided for when the insured person passes away. GUL is a form of permanent insurance that does not provide much cash value accumulation potential, making it less expensive than other forms of universal life policies.  


The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company. 

EL01603f (2-24)

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Guaranteed universal life insurance  coverage can be a cost-effective life insurance product with a primary focus on a payable death benefit. Purchasing life insurance protection as a senior person can provide the peace of mind knowing that your family will be taken care of upon your death. The right life insurance policy will always depend on your existing resources and assets, so be sure to carefully evaluate your policy options and speak with a trusted advisor or life insurance agent before making a decision.

Guaranteed universal life coverage can be a cost-effective life insurance product, focused primarily on a payable death benefit.

Why Purchase Whole Life Insurance Coverage as a Senior?

Life insurance products cover a broad scope and can provide a blanket of assurance that should you pass away, you have insurance protection in place to settle certain debts, help prevent a family member from losing property, or pay other expenses such as medical and funeral costs. 


Senior life insurance typically provides protection geared towards objectives such as: 

Leaving a lump sum payable to your designated family members 
 

Covering burial costs and any other expenses  linked to your estate 
 

Replacing your income, such as when a spouse or partner is financially dependent on your pension earnings or other income 


Purchasing life insurance protection as a senior person can provide the peace of mind that your family will be able to honor your life wishes and celebrate your life comfortably, potentially without the burden of large medical bills or other debts.  


Well-structured life insurance policies may also offer tax advantages and present beneficiaries with an inheritance from the death benefit that is potentially less exposed to limited tax obligations. 


Considerations When Purchasing Senior Life Insurance Coverage

Data from Statista indicates that in 2022, 2.55 million children throughout the US were living with a grandparent within their household. A report published by AARP further shows that 2.3 million grandparents were primary caregivers for grandchildren in 2023. 


These figures indicate a demonstrable need for seniors to secure insurance coverage to protect their life interests, ensuring that grandchildren who depend on older relatives have the means to help maintain their lifestyle should a grandparent pass on.

Questions to Ask When Purchasing Life Insurance Coverage for Seniors

However, the most appropriate life insurance policy for you may depend on your expectations and objectives–for example: 


What level of life insurance coverage do you require, and which payouts or benefits matter most to you when selecting life insurance? 

Do you have a fixed budget available to pay insurance premiums, or is there a minimum death benefit you require with your policy? 

Are the rates for your preferred life insurance policy affordable for you, and are there any health-related circumstances that may impact your policy decision-making? 


We advise you to speak with an experienced, licensed insurance advisor should you need assistance evaluating your options or deciding on the right policy for you. Life insurance companies may offer free quotes, so that you can understand how much you will pay each month for the policy and compare policies.


Understanding Guaranteed Universal Life Insurance Policies for Seniors

Guaranteed universal life coverage is an insurance product that can be purchased at a lower expense  than other universal life insurance options, with a primary focus on a payable death benefit rather than accumulating a cash value within the policy. Insurance applicants who are seniors may choose this insurance policy since the ability to accumulate cash value is less of a consideration than it would be for a younger person, given the potentially smaller period the policy would have to grow. 


The guaranteed universal life insurance policy that’s best for you will vary based on your circumstances and requirements, but in most cases, this insurance coverage offers lifelong protection, policy premiums that are typically more affordable, and a way to help make sure  your family is taken care of through the death benefit. 



Insurance costs naturally tend to increase with age. Still, the possible advantage of a whole life or a guaranteed universal life insurance product is that policy applicants may be eligible as seniors.  However, policy availability is dependent on their assessed insurance risk. If you are looking to get a life insurance policy, an insurance advisor can help you determine what you will qualify for and the final expense for the policy.


The Benefits of Guaranteed Universal Life Insurance for Retirees



Guaranteed universal life insurance coverage is designed to last for life, in a similar way to a whole life policy. Seniors may find this life insurance policy feature beneficial when searching for cost-effective life insurance that does not have an expiry date.


Lower Costs for the Life Insurance Policy



While guaranteed universal life insurance does not generally build cash value, forgoing this policy feature often makes insurance coverage more affordable, particularly for insurance applicants who have encountered high estimates for other kinds of insurance policies.


This insurance coverage ensures that the benefit payable at death remains stable and assured provided you comply with the expense payment schedule and any other insurance policy conditions (based on the claims paying ability of the issuer). Note that missed or late payments may impact your insurance policy coverage.

Flexibility to Modify Insurance Coverage




In some cases, you have the flexibility to modify your insurance coverage, which can be useful should your policy requirements change or if you would like to customize your life insurance. 


The primary advantage of guaranteed universal life insurance for seniors is that the policy does not run for a set period before expiring and typically has a lower cost for coverage than indexed or variable universal life policies because these kinds of policies aren’t designed to build cash value. The policy typically guarantees a payout of the death benefit, provided the policy is in good standing when the insured person passes away (guarantees are based on the claims-paying ability of the issuer). 



Comparing Life Insurance Products for Seniors

Comparing Life Insurance Policies for Seniors


Insurance can be a viable solution in later life if you require the assurance of having a policy that can pay a suitable value to your beneficiaries and cover any financial obligations that may have otherwise been difficult to cope with. For many seniors and retirees, their long-term financial liabilities decrease, and they may have retirement policies and savings as a financial cushion and own their property without mortgage debt to worry about. 


However, end-of-life costs such as medical and funeral expenses may be high and can exceed the value of your life savings or erode the value of the estate you wish to leave to your loved ones. You may also want to obtain life insurance to help take care of a spouse's or partner's financial needs after your death.


Choosing the Right Life Insurance for Seniors


Your policy coverage and insurance expense will always depend on your existing resources and assets, whether you require a modest or significant insurance benefit payable to your family, your current age, health, and lifestyle, and what features you wish to add to your policy. For further information about guaranteed universal life insurance, policies designed for seniors, or assessing policies to meet your requirements, you should speak with a trusted financial advisor or licensed insurance agent.

Life Insurance Loans from a Whole Life Policy

Guaranteed universal life coverage can be a cost-effective life insurance policy, focused primarily on a payable death benefit. Read more...

Guaranteed Universal Life Insurance for Seniors

The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company. 

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Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Some universal life insurance policies mature when the policyholder reaches a certain age. ‘Maturity’ means the policy ends. Many insurance companies have set the maturity date at an age that is unlikely to be reached (such as age 121), while other companies set the maturity date at an earlier age, such as age 85. 

If the policyholder has survived to the maturity date, they may receive a maturity payment. If the policyholder died before the maturity date, then the death benefit would have been paid to the designated beneficiaries and the policy would end. 

Explore universal life insurance maturity & options: death benefits, payments, & policy types.

Universal life insurance is a form of permanent life insurance that can come with a caveat to the ‘permanence’ because of the maturity date. Universal life insurance policies come with a maturity date – a kind of ‘expiration date.’ This means universal life insurance can expire, so it’s important to review the policy specifications for any product you might be considering purchasing. In most cases, the reason companies set a maturity date is so they can calculate the life insurance premiums that are payable.  

Generally, these maturity dates can coincide with an advanced age such as 105, 118, 121, or beyond. However, some plans reach maturity dates as early as age 85, meaning you could potentially be alive once the plan reaches its maturity date – especially as life expectancy continues to increase.  

If you are alive when your universal life insurance plan matures, generally you may receive a payment and the policy ends.  The exact payment amount depends on the policy, but it may be the full death benefit or the cash value amount. It is also important to note that the proceeds from a policy maturing could be taxable. If you pass away before the maturity date of your policy, your beneficiaries will receive the death benefit outlined in your particular policy. 


What Kinds of Universal Life Insurance Are Available?

If you’re wondering about how or when a policy matures, you might be wondering about the different kinds of universal life insurance policies. There are multiple types of individually owned universal life insurance, which is why exploring your options with an insurance agent or financial advisor can help you find the plan that may work best for your needs. 

Group universal life insurance works a little differently. This policy offers life insurance coverage at group rates that may be more affordable, and members may have the opportunity to set aside money that has the potential to grow cash value. Accumulated cash value typically earns tax-deferred interest, as does individual life insurance. However, group life policies are typically only available through an employer or an affiliated membership group. 

With Indexed Universal Life insurance policies, the cash value is tied to a market index, although not directly invested in the market or an index. However, gains are usually capped or limited– meaning there are limits to how much money you may gain based on how a particular index performs. IUL is not an investment and therefore policy holders cannot experience a loss as a result of negative index performance (though fees and expenses can impact cash value). With many IUL policies, you may also have the option of choosing a fixed-rate account, which earns a fixed interest rate and isn’t dependent on market performance. 

This type of policy can build cash value that is generally regarded as a little more uncertain than fixed universal life insurance, simply because of the relationship to the stock market. However, for policyholders who are looking to potentially grow cash value while still protecting their families, it may be a good fit. 

Variable Universal Life insurance allows policyholders to tie their cash value gains directly to the market in the form of mutual fund-like subaccounts. These subaccounts are structured to mirror the performance of  mutual funds. You can choose the allocation of how your payments to suit your risk tolerance and investment objectives.   However, tying these values to these policies could also result in subsequent losses, which are not always capped. This means variable policies could be perceived as more volatile, and these kinds of policies may also require more hands-on management. However, they could also offer greater growth potential.

Guaranteed Universal Life insurance, sometimes called Fixed Universal Life, is often regarded as the most secure UL policy because premiums typically remain consistent and stable, with policyholders paying a fixed amount throughout the life of the policy. These policies may have little cash value accumulation potential, yet the option to pay fixed premiums may make this option more appealing to some customers. 


If you’re considering purchasing life insurance, the decision may feel somewhat intangible – but it’s important to remember that life insurance isn’t solely about death.  

As you research your options, it’s vital to consider the benefits and cost of each life insurance policy and to speak to a trusted advisor who can help you decide which policy is best for you and your family.  


What are the characteristics of Universal Life Insurance


What Happens When a Universal Life Insurance Policy Matures?


Basically, cash value life insurance is a form of permanent life insurance that includes both a protection component in the form of a death benefit and a savings component in the form of accumulated cash value. When you purchase this type of insurance policy, a portion of the premium payment is allocated to a cash value component. This cash value has the potential to grow over time, and can be accessed by the policyholder during their lifetime, or the funds could potentially serve as an additional death benefit to be distributed after the insurance policyholder’s passing (provided the company offers this feature–be sure to carefully explore death benefit options for each product you are considering). In this guide, we'll help you understand more about life insurance cash value so you can determine which plan is right for your insurance needs.

The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company. 

EL01603g (2-24) 

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Cash value life insurance policies are policies that offer the potential to grow cash value apart from the protection component of the insurance policy. This cash value has the potential to grow over time. There are several types of cash value insurance policies and ways to access the money, including through a withdrawal or a loan. Whether you'll be able to access the cash tax-free is dependent on the type of insurance policy you have and how much money you have paid into the policy versus how much you’d like to take out. Before choosing a cash value insurance product, you should thoroughly review the policy details and speak with a trusted advisor or life insurance agent as to whether or not this type of policy may be a good fit for you.

Many different types of life insurance qualify as cash value life insurance policies. But what does ‘cash value life insurance’ mean? A product that can build  cash value.

Types of Cash Value Life Insurance Coverage


A cash value life insurance policy can offer several options to the policyholder, because there are multiple ways policies can accrue cash value. However, it’s important to note that a life insurance product that builds cash value may not suit your unique needs and life goals. It’s important to discuss all your insurance policy options with a trusted financial advisor.

Universal life insurance policies generally allow policyholders the ability to adjust the value of their premium insurance payments, but this may impact policy coverage and the insurance rate. One benefit of universal life insurance is that if your life hits unpredictable circumstances or your needs change, you can usually adjust your insurance premium while still maintaining some amount of coverage and any accumulated cash value. 


Life insurance that builds cash value can come in handy, as you may use the cash value of your policy to make your insurance premium payments, or pay other expenses if needed such as a home mortgage or to pay off loans. 


This type of cash value life insurance is permanent, lasting the entire lifetime of the policyholder–as long as the insurance premiums are being paid regularly. In this type of insurance policy, the cash value can increase over time. Additionally, the death benefit remains guaranteed (based on the claims-paying ability of the insurer). Unlike with universal life insurance, the premiums for these coverage plans are fixed.

Indexed Universal Life Insurance Policies



When you purchase an indexed universal life insurance (IUL) policy, your cash value accumulation potential is tied, in part,  to a particular stock market index. How the index performs will help determine the growth of your cash value and the amount of index interest credited. However, it is possible that the index will be negative in a period resulting in no index interest earned on your accounts. Because it is a fixed insurance product and not an investment, policyholders do not experience a loss as a result of negative index performance. It is important to note that this policy is not an investment and it is not possible for customers to invest directly into an index. Life insurance companies manage the index, which is why customers can't invest directly into the fund. 


While greater risks can result in  greater potential rewards, it’s still advisable to understand whether or not a policy  you are considering offers a guaranteed minimum interest rate. Again, you should speak with a financial advisor or an insurance agent to fully understand how an IUL product might work. 


Variable Universal Life Insurance Policies

In a variable universal life insurance (VUL) policy, your cash value is directly invested in mutual fund-like subaccounts. These insurance policies tend to include higher risk because the cash value will increase or decrease depending on how the chosen subaccounts are performing. 


This coverage may be a good fit for life insurance policyholders who are experienced in investing, have room to take risk, and have more time to grow their account’s cash value. 



Term life insurance is not included in the list of cash value policies for life insurance. A term insurance policy does not accumulate cash value. A term insurance policy only provides a death benefit if the insured person passes away while the policy is in effect. Term Life Insurance is generally less expensive than universal life insurance due to its fixed term and inability to accumulate cash value.


How Cash Value Life Insurance Policies Work


A cash value insurance policy can provide lifelong coverage, just like other forms of life insurance coverage. When the insured person eventually passes, the death benefit is paid out to the beneficiaries, provided the policy is in good standing and premiums are up-to-date. 


Before the insured person passes, it’s important to understand why paying life insurance premiums matters. When the policyholder pays their life insurance premium, the payment goes towards the protection component (the death benefit), the savings component (the cash value), and towards the life insurance company’s policy charges and fees. This means only a certain portion of the insurance payment goes into that cash value component.  


If the insurance policyholder needs to access their cash value before their death, they can do so provided they meet the life insurance company’s criteria. In many cases, withdrawing cash from cash value may be a better option than taking out new lines of credit or applying for new loans. You should carefully evaluate the terms of your insurance policy when considering taking a loan or withdrawal from your policy. 


There are four main ways you can access the cash value of your insurance policy: 


Pay Your Life Insurance Premiums Using Cash Value


If you’re experiencing financial hardship but don’t want to sacrifice your life insurance by missing payments or lapsing your life insurance policy coverage, you may be able to use the cash value of your policy to pay your monthly premiums. 
