Guaranteed Universal Life Insurance

Guaranteed universal life insurance offers a low-cost alternative to more expensive permanent life policies. With a guaranteed universal policy, you’ll have a fixed premium that won’t increase and a policy that remains active for your entire life. This policy has little to no cash value.

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  • Written By
    Jennifer Schell, CAS®

    Jennifer Schell, CAS®

    Financial Writer, Certified Annuity Specialist®

    Jennifer Schell is a professional writer focused on demystifying annuities and other financial topics including banking, financial advising and insurance. She is proud to be a member of the National Association for Fixed Annuities (NAFA) as well as the National Association of Insurance and Financial Advisors (NAIFA).

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  • Edited By
    Lamia Chowdhury
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    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial editor at Lamia carries an extensive skillset in the content marketing field, and her work as a copywriter spans industries as diverse as finance, health care, travel and restaurants.

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  • Reviewed By
    Stephen Kates, CFP®, Licensed Life Insurance Producer

    Stephen Kates, CFP®, Licensed Life Insurance Producer

    Principal Financial Analyst for

    Stephen Kates, CFP® is a personal finance expert specializing in financial planning and education. He serves as the Principal Financial Analyst for, where he delves into industry trends to support consumers and financial advisors on wealth management, annuities, retirement planning, and investing.

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  • Updated: January 24, 2024
  • 4 min read time
  • This page features 5 Cited Research Articles

What Is Guaranteed Universal Life Insurance?

Guaranteed universal life insurance is one variety of universal life insurance. This means, your policy will never expire if you continue to pay the premiums.

Universal life insurance differs from other types of life insurance because you can adjust the terms of the policy throughout your life if your financial needs change.

Most universal life policies also have a cash value that accumulates over time. You can use this cash value to get a loan from the policy issuer or let it accrue interest at a fixed or variable rate. The cash value component is typically unapplicable for guaranteed universal life insurance.

A guaranteed universal life insurance policy comes with a guaranteed death benefit and a premium amount that stays the same throughout the life of the policy. This means, guaranteed universal policies are less flexible than other universal policies, but they tend to be less costly.

Universal life insurance offers flexibility that other permanent insurance does not. Guaranteed universal life insurance can be a useful tool for older individuals who may have changing coverage needs over time but can’t use term insurance and can’t afford other permanent insurance options.

How Does Guaranteed Universal Life Insurance Work?

Guaranteed universal life insurance can be thought of as a combination of universal life and term life insurance. It doesn’t have much cash value (like term insurance), but guaranteed universal does have some of the flexibility that a universal life policy features.

Although it’s considered a permanent life insurance policy, guaranteed universal life does have an end date. When you purchase a guaranteed universal life insurance policy, you’ll choose an advanced age that the policy will remain active until, for example 95 or 100 years old.

Another major difference between guaranteed universal and other types of permanent life insurance is the cash value of the policy. While most permanent life policies accumulate cash value over time, a guaranteed universal policy has little or no cash value.

This is another reason why guaranteed universal life insurance can be a more affordable permanent life insurance option. You’ll pay less in premiums, but you won’t be able to use your policy to get a loan.

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Pros and Cons of Guaranteed Universal Life Insurance

Guaranteed universal life insurance works best for someone who anticipates having long-term insurance needs but may not have the funds for a more expensive universal life policy. Like any type of life insurance, a guaranteed universal policy has benefits and drawbacks. You should always weigh the pros and cons of a life insurance policy before you purchase.


The biggest advantage that guaranteed universal life insurance offers is the guaranteed premiums. When you purchase the policy, you’re locking in a premium amount that won’t increase throughout the policy. This makes it easy to budget for year after year. Because neither the value of the policy nor the premium amount is dependent on the financial market, guaranteed universal is considered a “safer” insurance policy.

Another benefit of having a guaranteed universal policy is the length of the policy. You can choose a policy that doesn’t expire until you’re 120 years old, essentially eliminating the risk that you’ll outlive your life insurance coverage.

The final strength that guaranteed universal has over other life insurance types is the lower cost. Guaranteed universal presents a lower-cost alternative to more complex policies like whole life or variable universal life.


Because guaranteed universal life insurance is designed for simplicity, it doesn’t have as many features as more complex permanent life policies. While a guaranteed universal life policy allows you to increase or decrease the death benefit, it doesn’t allow you to adjust premiums like that of a different universal life policy. You also won’t be able to grow the cash value of your policy via market exposure like you can with a variable universal life policy.

Another potential drawback of guaranteed universal life insurance is the low cash value. There’s no savings component in a guaranteed universal life policy, meaning you can’t withdraw cash from the value of your policy or get a policy loan.

Guaranteed Universal Life vs. Types of Universal Life Insurance

To better understand what sets guaranteed universal life insurance apart, let’s see how it compares to other varieties of universal life insurance.

Comparing Types of Universal Life Insurance

Type of Insurance

Premium Cost Cash Value Other Features
Fixed Universal Higher premium that can be adjusted Accumulates at a fixed rate Ability to adjust premium and death benefit
Variable Universal Higher premium that can be adjusted Can grow or diminish based on market performance Offers choice of investment funds for cash value
Guaranteed Universal Lower premium guaranteed for life Little to no cash value Ability to increase or decrease death benefit
Source: Business Insider
Please seek the advice of a qualified professional before making financial decisions.
Last Modified: January 24, 2024