There is a good chance you’re reading this article because you heard some compelling things about Guaranteed Universal Life. Perhaps you like the simplicity of this plan. Maybe you don’t want to mix your insurance with your investments, yet you want to keep a policy beyond the standard term durations.
In many ways, guaranteed universal life insurance is similar to term life insurance. Most people simply shop for the lowest-cost carrier when shopping for term insurance. Yet, even with term insurance, there are differences between carriers and products. It’s not always a matter of shopping for the lowest rate. In this article, we will look at the important factors to consider when comparing guaranteed universal life insurance – so you can make an informed decision.
If you would like to read more information about guaranteed universal life insurance (also known as Term for Life or Term to 100), then please read our article that reviews GUL. We also recommend an article that covers the pros and cons of this product. For instant quotes, use our quote engine on this page and read the section below covering the best place to obtain comparison quotes.
How to Compare Guaranteed Universal Life Insurance: Four Important Factors
- Financial Stability of Carrier
- Policy Provisions
- Policy Riders
- Premium & Finding the Best Place to Get Comparison Quotes
We will look at all four factors, so you know how to properly compare guaranteed universal life plans. This can serve as a checklist, so you are armed with right questions to ask.
1. Financial Stability of Carrier
This might be considered a “no brainer” for you. Of course, you will want to steer clear of companies with subpar ratings. However, even though the financial strength and stability of the carrier is important, it’s more important with other types of life insurance.
When you depend on a financial company for investment returns, then their financial ratings are of the utmost importance. Unlike, whole life or other types of universal life insurance, GUL is fully guaranteed. No moving parts, no cash value or non-guaranteed fee and internal costs. Regardless of a companies financial performance, carriers offering GUL are required to honor the guaranteed premiums and guaranteed death benefit.
Nevertheless, financial stability is important. You don’t want your state’s guaranty association to step in because your life insurance company went into receivership. We recommend sticking with carriers that have the top financial ratings by the main rating agencies: AM Best, S&P, Moody’s, and Fitch. Please use this link to read an article that expands on financial ratings.
2. Policy Provisions
This is an important, but often overlooked factor. Some carriers offer a Return of Premium benefit or a Chronic Illness Benefit as a “built-in” provision (no additional cost). These provisions can make a significant difference when comparing GUL policies. The Chronic Illness benefit is considered a “living benefit”.
- The Chronic Illness benefit is also often referred to as an Accelerated Death Benefit. For example, North American is one of several companies that offer this benefit. Their benefit is particularly strong. Most carriers allow you to receive a portion of the death benefit in advance if you are diagnosed with a terminal illness. This provision can vary among carriers.
- The Return of Premium (ROP) benefit is offered by only a few carriers. This benefit allows policyholders to receive a partial or full return of their premium. If you purchase a GUL and then decide 20 years later that the coverage is no longer needed, then you have a good option. Let’s take a quick look at Mutual of Omaha’s ROP benefit:
- Mutual of Omaha provides 7 60-day windows in which a policyholder can surrender their policy and have their premiums refunded: up to 50% at the end of year 15 and up to 100% at the end of years 20, 21, 22, 23, 24 and 25.
3. Policy Riders
For sake of clarity, we differentiate Policy Provisions from Policy Riders based on cost. Riders are optional benefits that are available for additional premium. Similar to most life insurance policies, GUL policies offer several riders such as:
- Waiver of Premium (premium waived in the event of disability)
- Accidental Death Benefit (additional coverage available that pays only for death due to accidents).
- Children’s Life Insurance (coverage for one or more children).
- Guaranteed Insurability This rider gives you the option to buy additional life insurance with no evidence of insurability at certain points during the life of the policy. North American and Midland National offer this rider.
These riders can vary (and the cost can vary) among carriers. Some carriers offer riders such as Return of Premium, Accelerated Death Benefit, and a Chronic Illness Benefit. Other carriers, as noted above, offer these benefits as policy provisions with no additional premium.
- Long-term Care Insurance
This rider is relatively new. The long-term care insurance rider is only offered by a few carriers. It can be worth considering, especially for people in their 50s and 60s. Adding an LTCi rider is an alternative way to protect against the risk of long term care at a much lower cost than traditional LTCi. Nationwide has a particularly strong LTCi rider. With Nationwide’s GUL, the death benefit and LTC benefit are the same. The benefit is paid directly to the insured. Unlike most LTCi plans, these premiums are guaranteed never to increase.
4. Premium & Finding the Best Place to Get Comparison Quotes
You would likely assume that we would say our quote engine is the best place to obtain quotes. Well, that’s not the case. Any agency that says their quote engine is the best one for obtaining guaranteed universal life insurance quotes misunderstands this product and market. There are several quote engines available to insurance agents – some are “consumer facing” and others are considered “back office”.
We have found that all quote engines have their strengths and weaknesses. That’s why we use the three best ones available. Not all quote engines show all the carriers, especially when it comes to GUL. Again, that’s why we use three. Since GUL rates vary depending on the selected guarantee age, it makes it difficult to effectively use quote engines for consumers to use.
So, we recommend completing our quote form on this page. Select “lifetime” to see GUL quotes guaranteed to 100. This will give you valuable information and see most of the top carriers. However, we will get in touch with you (at your request) to provide a customized quote comparison showing ALL the top carriers. We would like to learn more about your health and lifestyle to quote your the most accurate underwriting class.
Important Considerations Regarding Premium and Underwriting Classifications
Each carrier has it’s strengths and weaknesses in terms of medical underwriting. You might have determined that you will qualify for the best possible underwriting classification with all carriers. If that’s the case, then it’s simply a matter of comparing the Preferred Best class with all the top carriers.
However, many people have health issues that prevent them from qualifying for the best rate. This is where a knowledgeable agent can help determine which carrier will make the best offer. In fact, completing a short questionnaire can allow an agent to inquire with multiple carriers to see who will make the best offer. All of this can be done without completing an application or giving carriers identifying information.
How to Compare Guaranteed Universal Life Insurance – Conclusion
Working with an experienced agent who is works with the best GUL carriers. You will see on this site that we review all of the best GUL carriers. This market is dynamic. Rates often change, carriers add policy provisions and benefits (and remove them at times), so we stay current with all the changes.
In many ways, guaranteed universal life insurance is simple to compare. Unlike cash-value life insurance, there are no internal costs and other moving parts. You don’t have to worry about the life insurance company playing games and increasing the non-guaranteed fees. It’s like having a term policy that never lapses.
Even with the simple policy design, it is still important to compare carriers and policies. We hope that the information in this article will help you make an informed decision or at least equip you with the important criteria to understand.
We will be glad to help you find the best policy based on your needs, so please complete the quote form or call us anytime at 678-236-1600 for a free consultation.