Does Guaranteed Universal Life Insurance Provide Lifetime Coverage

Guaranteed Universal Life Insurance
Guaranteed Universal Life Insurance
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A guaranteed universal insurance policy is a plan that offers lifetime coverage. The cover will not lapse even when the cash value falls to zero.

It can be treated as a term life policy whose term ends at the maturity of the policy. In most cases, guaranteed universal life insurance has no cash value component.

However, it can have very little cash value. But the cost of the policy is lower compared to the cost of a standard cover, which is important to keep in mind.

The cover can be treated as a combination of both whole life insurance and term life. However, it provides coverage at affordable rates compared to whole life insurance.

It is an ideal cover for anyone looking for a cover that guarantees death benefits. Such people should not have an interest in benefits like cash value. It comes with the following features:

  • It is a lifelong coverage
  • It is affordable
  • Guarantees to pay death benefits when the insured die
  • You can decrease the death benefits if the need arises

Guaranteed Universal Life Insurance is the only policy that allows people to buy a permanent cover that will last up to when they breathe their last. The only challenge the insured face is that they should be able to pay the premiums as planned.

Paying premiums on time keeps the policy active. Besides, it guarantees that the beneficiaries will receive the payment upon the death of the policyholder.

But if the needs of the insured changes along the way, they can choose to decrease the benefits. They can do this without the need of buying a separate or new policy. This is critical in cases where the budget changes or one loses a job.

Thus, it becomes difficult to continue paying high premiums. Also, if the responsibility reduces a huge overage may be unnecessary. In such a case, you can negotiate to have the premiums reduced.

Also, guaranteed universal life insurance comes with the option of getting your premium back. By this, it means that if needs change this coverage can be canceled or surrendered. When you do this, you will be entitled to receive your money back.

However, the specifics of this feature vary depending on the company in question. Some companies can only allow you to cancel the cover and get refunded during certain years. They will also decide the amount of money you can receive as a refund.

Note that the objective of a guaranteed cover is not to build cash value. However, it may still include the cash value component. Thus, it is a lifetime coverage that is ideal for people who are not interested in building cash value.

It is a low-cost policy designed to guarantee payment upon the death of the insured. Even in a case where it may generate cash value, the money may not be sufficient to allow one to take a loan. But, if the insured decides to take a loan, it diminishes the guaranteed death benefits.

One important thing about guaranteed universal life insurance is that it needs underwriting. As such, smoking status, gender, age, and family history may need to be assessed. It helps to determine the risks. Also, you may be required to undergo a medical exam before you get the cover.

Who should Consider this Lifetime Coverage?

A family that looks forward to lifelong protection but which is operating on a tight budget may find this cover affordable. Also, young dependents may benefit from the cover.

It guarantees that they will receive the payment if something happens. Guaranteed universal life insurance protects individuals who own small businesses or those in debts.

If the debts are expected to last until retirement they can rely on this cover. Other people who may find the cover vital are those who need to be protected from estate tax.

Also, if the elderly want to leave a legacy including inheritance to their heirs, the cover can do the job. Lastly, old people whose term policy has lapsed but who still want a cover will find this policy worthy.

So why should one Consider this Lifelong Coverage

If they want a cover that lasts the entire life and is not interested in extras like cash values, they may consider the cover. Also, if they do not have a lot of money to spend on a cover, the guaranteed universal life cover is the best.

Guaranteed universal life insurance coverage is thus, the best option for anyone looking for lifelong coverage. It is affordable and guarantees death benefits upon the demise of the policyholder. Besides, it is one of the few policies that allow the holder to decrease coverage when the need arises.

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Paschal Okafor is NaijaTechGuide Team Lead. The article Does Guaranteed Universal Life Insurance Provide Lifetime Coverage was written by Abu Obaida. The article was last modified: January 28th, 2021
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