Term to 100? How Guaranteed Universal Life Insurance Works

Agents and financial gurus often refer to Guaranteed Universal Life Insurance as term to age 100. But using the word term is a bit misleading because this product isn't term life insurance at all.

It's a form of universal life insurance that provides for a guaranteed death benefit provided the policy owner pays a required premium over a specified number of years (known as the guaranteed period).

The product does accumulate a small amount of cash value, but that cash value cannot come out of the policy without forfeiting the guaranteed death benefit feature.

Because the policy owner cannot touch the cash value without sacrificing the guaranteed feature of the death benefit, many professionals recommend that policy owner of this type of universal life insurance completely ignore the cash value in the policy (this is generally a good policy).

The guaranteed period of these policies can be for practically any period of the policy owner desires up to the insured's age 121. A shorter guaranteed period will require a smaller premium payment while a longer guaranteed period will require a larger premium payment.

The guaranteed death benefit period is chosen at policy inception and the policy owner cannot change this guaranteed period once the policy is in force.

Guaranteed universal life insurance has a level death benefit, which differs from some forms of universal and whole life insurance. Because the death benefit will not increase over time, it's important that the buyer consider the adequacy of the death benefit amount decades into the future.

[ThomasGuerriero]

Clear and concise presentation... good job... thanks!

[canadaboy]

Hello, Thanks for the presentation, I have somewhat of a similar policy -
1- can you pls advise why is the cash value grows only till age 69 and after age 70 keep decreasing even though the policy holder is still paying the yearly premiums . does that mean the policy owner has to pay an increase in premium to keep the policy in force as the cash value has ben depleted to zero.
2- I though the whole idea of building cash accumulation was so that the policy owner can use it to offset or make the policy pay for the yearly premiums his latter years if he is running short of cash .