No-Lapse Insurance: Universal Life No Lapse Guarantee Insurance

Key Takeaway

Some universal life insurance policies can expire when the policyholder reaches a certain age. No-lapse universal insurance, on the other hand, is a flexible, permanent option that allows you to protect your family for as long as you are alive. As long as minimum payments are made to keep the insurance policy active, you may also have the option of accumulating cash value that can be used when personal finances are tight or to help cover your policy premiums at a future date.

No Lapse Universal Life Insurance Chart

Life insurance can be one of the most important purchases you can make for yourself and your loved ones. A life insurance policy can offer certain personal benefits. First and foremost, it’s designed to help your family with lost income upon your death passing, but if you choose a policy that can build cash value, it can also help with other financial needs that may occur while you are still alive. Life insurance solutions can help keep you on track for personal financial goals, and provide a sense of security when that plan deviates.

Certain life insurance ‘permanent’ policies can come with a few caveats to their permanence. Some life policies have a maturity date, when the policy will end. This means that your universal life insurance policy can expire, and that date ranges from company to company. However, the policy maturity date is usually an advanced age, typically between 85 and 121.

So as people are living longer, more individuals are seeking no-lapse universal life insurance coverage. An insurance policy that offers a no-lapse guarantee means that as long as premiums are paid, the insurance policy won’t expire. The only exception is if the insurance policyholder fails to pay the required minimum premium. 

What Is No-Lapse Guaranteed Universal Life Insurance?

Universal life (UL) insurance is a type of permanent life insurance, meaning it offers lifetime coverage and can build cash value over time. However, most UL policies generally last until a certain age, so it’s possible for policyholders to outlive the terms of their life policy. The maturity age varies from insurance company to insurance company, but most policies don’t mature until an advanced age. The maturity age is usually somewhere between age 95-121, although some life policies have a maturity age as low as 85.

This type of insurance can be more flexible than other types of insurance policies. This is because you can adjust the amount you pay in insurance premiums (as long as minimums are met), which can help when your income fluctuates. Just like other types of permanent policies and products, universal life insurance provides you lifelong coverage and provides your beneficiaries a death benefit when you pass.

With universal life insurance, you have the ability to build cash value and can borrow or withdraw money from any accumulated cash value while you are still alive*. When you pay your policy premium, the insurance company first deducts the cost of the insurance and administrative fees, if applicable. The remaining funds are added to your insurance policy’s cash value, which can grow based on the interest rate set by your insurer or in part by the performance of a market index depending on the type of lifetime policy.

Benefits of a No Lapse Guarantee Universal Life Insurance Policy

Universal life insurance policies with a no-lapse guarantee can come with several coverage benefits, including:

  • Guaranteed coverage at a cost that may be more affordable than other types of life insurance policies.
  • A sense of security–your contract will not lapse as long as you pay your insurance premium.
  • The ability to leave money to your loved ones.
  • The potential to cover estate taxes, estate settlement fees, medical bills, or other personal debt.

Some policies can offer a return of premium option, which can allow you to recover all or a portion of your insurance premium if, at the end of a specified term, you decide you no longer need coverage. Some insurance companies also offer access to your policy’s death benefit while you’re still living if you have a qualifying critical, chronic, or terminal illness. You should speak to a trusted financial advisor or life insurance agent to fully understand all the features of any product and any costs associated with added coverage benefits you might be considering.

What Can Cause Life Insurance Coverage to End or Lapse?

With no-lapse universal life insurance, or really with any kind of life insurance, failing to pay your policy premium will cause your coverage to end. There are other circumstances that might adversely affect your insurance coverage, such as borrowing too much from the accumulated cash value which could result in an equity surrender, so please speak to a trusted financial advisor to understand how your personal policy could be impacted.

Next Steps for No Lapse Guarantee Life Insurance

Universal life insurance can help you reach your personal goals and could help provide a sense of security for you and your loved ones. To find out more about what type of life policy is right for you, please speak with a trusted financial advisor.

EL01603z (3-24)

* Accessing cash value will reduce your policy death benefit and values, may result in certain fees and charges, and may require additional premium payments to maintain coverage.

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.

Policies are issued by Everly Life Insurance Company (“Everly Life”), Topeka, KS. Everly Life is not licensed in the state of New York and does not solicit or transact business in New York.

A.M. Best's 15 ratings are a measure of claims-paying ability and range from A++ (Superior) to F (in Liquidation). Ratings are current as of January 25, 2024 and subject to change at any time. While ratings can be objective indicators of an insurance company's financial strength and can provide a relative measure to help select among insurance companies, they are not guarantees of the future financial strength and/or claims-paying ability of a company and do not apply to any underlying variable portfolios. The insurance agency from which a policy is purchased, and any affiliates of those entities, make no representations regarding the quality of the analysis conducted by the rating agencies. The rating agencies are not affiliated with the above-mentioned entities, nor are these entities involved in any rating agency's analysis of the insurance companies.

CalendarLive support: Mon–Fri, 8am–5pm CT

© 2023 Everly, LLC