Guaranteed Universal Life
The main benefits of a Guaranteed Universal Life Insurance policy are clearly stated in the product’s name — its guaranteed value and its lifetime coverage. This type of policy’s value is evident in these features:
- It combines the permanent coverage of whole life insurance with the lower cost of term life insurance.
- A client can customize coverage periods to last well beyond traditional term life periods.
- The premiums don’t change from year to year — and will never increase as long as they’re paid on time.
- It is usually a more affordable insurance option because the policyholder isn’t paying to fund the cash value.
Any excess from premium payments — above the current cost of insurance — is added to the cash value of the policy. This cash value is credited with interest each month, and usually has a contractual minimum rate.
Some of the most common uses for these kinds of life insurance policies include:
- Use as alternative to term life insurance, whole life insurance, annuities, or maximization of pension or annuities.
- Use as an alternative to life insurance retirement plan or Roth IRA = Especially appealing for high-income earners who want an additional tax shelter (with potential creditor/predator protection) who have maxed out their IRA, who are not eligible for a Roth IRA, and who have already maxed out their qualified plans.
- Final expenses = Such as funeral, burial, and unpaid medical bills.
- Use as an alternative to long-term care insurance = Where new policies have accelerated benefits for long-term care.
- Income replacement = To provide for surviving spouses and dependent children
- Debt coverage = To pay off personal and business debts, such as a home mortgage or business operating loan
- Estate liquidity = When an estate has an immediate need for cash to settle federal estate taxes, state inheritance taxes, or unpaid income taxes on income in respect of a decedent (IRD).
- Estate replacement = When an insured has donated assets to a charity and wants to replace the value with cash death benefits.
- Business succession and continuity = For example, to fund a cross-purchase or stock redemption buy/sell agreement.
Why Agents Offer Guaranteed Universal Life Insurance
Just as Guaranteed Universal Life Insurance policies aren’t the best fit for every client, they aren’t always the best fit for Agents. Consider these questions:
- Are these plans beneficial for the people in your community and the areas you serve?
- Do you offer similar/competitive products?
There are many compelling reasons to offer Guaranteed Universal Life Insurance policies, such as:
- You can help families with some of the most difficult decisions of their life
- You can provide your clients with peace of mind, as they will know they have a health plan behind them
- You’ll be serving the needs of your clients and community
- You can offer a profitable product that will help your bottom line
How to Get Started with Guaranteed Universal Life Insurance
If you decide to offer Guaranteed Universal Life Insurance policies, we recommend talking to someone from the Medicare Advisors team of experts. They’ll provide answers to your questions, and have tools available to support your new product offering.
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