What Is Guaranteed Universal Life Insurance?

Key Takeaway

Guaranteed universal life coverage may offer a favorable combination of certainty and flexibility, as it’s an insurance product with a fixed death benefit and an adjustable payment plan.

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3/17/2024


Guaranteed universal life insurance is a product offered by a life insurance company that provides a compromise between whole life and universal life protection. 

This coverage isn’t subject to a specified term, but rather provides lifelong protection with a death benefit and flexibility for the policyholder. Policyholders can, for instance, select their own premiums and payment schedules, provided these meet the minimum requirements of the life insurance company.

As long as the policyholder complies with the policy terms and makes the required appropriate payments to keep their policy in force, their beneficiaries will receive the pre-defined death benefit, while taking into consideration that any loans taken against the value of the policy will reduce the death benefit (along with any applicable withdrawals, fees, and charges).

Comparing Whole Life, Universal Life, and Guaranteed Universal Life Insurance Products


What’s the difference between universal life insurance and whole life insurance? How do these products compare to guaranteed universal life coverage? 

Just like life insurance for individuals, group life insurance works by providing a form of insurance coverage (typically for as long as the person is employed, although some forms of group life insurance are portable). Each policy could have different conditions, provisions and limitations, so read the policy carefully for complete details. However, depending on the benefits offered by the employer, employees may have their premiums covered by their employer or split the premium with them through regular pre-tax payroll deductions.

These products are designed to offer the peace of mind that your family can receive financial support when you pass away, and are based on payment contributions into the policy (provided you have made the required premium payments). Keep in mind that several variables and product features may influence the type of life coverage you decide is most beneficial for you and your loved ones.

  • Whole life coverage offers a fixed premium, a set death benefit, and accumulated cash value–these policies can be more expensive than a basic term policy because they offer guaranteed dividends and a guaranteed death benefit.  
  • Universal life policies allow the policyholder to tailor their payments to a degree, meaning they may be able to adjust their premium payments based on their financial situation and overall circumstances. However, they must make the minimum required payment.

What is the Benefit of Guaranteed Universal Life Coverage?


Typically, universal life insurance can provide flexibility. It can be adapted to the policyholder’s needs and finances, unlike whole life insurance, which tends to be more rigidly structured.

Guaranteed universal life takes some elements of whole life, such as fixed premiums. Most providers will offer premium payment schedules based on the duration of your choosing, such as up to age 80 or 90, or for 20 or 30 years.This means most of the parameters of your policy are guaranteed for that time. However, it’s important to note that even in a guaranteed policy, the protection could lapse in some instances, such as if the policyholder has taken a loan against their policy and hasn’t repaid it, or they stop making premium payments.

Perhaps the biggest difference between guaranteed universal life insurance and other universal life insurance policies (e.g., IUL, UL, VUL) is that GUL offers limited opportunity to grow cash value. However, it's worth noting that the fees and expenses on this type of policy may be lower than those which offer more opportunity for cash value growth.

How Does a Guaranteed Universal Life Insurance Product Work?


Provided the policyholder complies with the agreed payment schedule and the premium values they select at the point of purchase, their coverage can provide a fixed death benefit with set premiums. Similarly to whole life coverage, the premium will not change even over an extended number of years.

When the insured person passes away, the guaranteed benefit is paid to their beneficiaries, provided the death occurs during the guaranteed period, and there are no withdrawals, partial surrenders, or loans against the policy that can erode the value.

Learn more about Everly Life Insurance Company.




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Guarantees are based on the claims paying ability of the issuer.

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.

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