How Guaranteed Universal Life Insurance Works for Seniors

How Guaranteed Universal Life Insurance Works for SeniorsLooking for a quote for life insurance or burial insurance? Click here and send me a message with details of what you’re wanting to accomplish. If you’d prefer to talk live, call 888-626-0439 to speak with me directly

Most likely you’re here to do research on how guaranteed universal life insurance for seniors works.

Perhaps you’ve had an insurance agent quote you on a policy, and you want to make sure you’re getting the best deal.

Regardless if you’re looking for life insurance coverage on yourself or a loved one like your mom or dad, this article is for you!

My goal is help you determine if universal life insurance is right for you as a senior citizen.

NOTE: Would you prefer me to present this information to you in video format? Watch the video below for the complete presentation on how guaranteed life insurance for seniors works. Enjoy!

Here’s An Overview Of Our Discussion On How Guaranteed Universal Life Insurance For Seniors Works:

The Basics Of Guaranteed Universal Life Insurance

Everything you need to know about life insurance

When I write articles on topics like term life insurance for seniors or how to get life insurance for burial costs, I like to start with the basics of how the insurance product works.

Guaranteed universal life coverage (also known as no lapse universal life insurance) provides a death benefit payout to your beneficiary at a guaranteed fixed price.

Unlike most universal life insurance, this unique version has a premium guarantee rider attached to the policy.

As long as you pay the suggested premium, your policy will not rate up.

And with most no-lapse universal life plans sold to last until age 121, they provide permanent protection for the entirety of your life.

Universal Life Policies Of The 80s and 90s

This type of policy design is much-improved over universal life insurance policies sold in the 80s and 90s.

The Wall Street Journal and profiled in late 2018 how seniors are losing their universal policies in dramatic numbers because of how they were improperly designed.

The problem with universal life insurance plans sold in the 1980s and 1990s stems in part due to overly-optimistic expectations.

Universal life insurance plans were designed to have more flexibility in design than a whole life or term life insurance plan.

Clients could adjust premium rates up or down if they ran into hard times, and the agent could custom-tailor many parts of the policy to make it fit the client.

One of the biggest issues with older universal life insurance plans were higher expectations for interest rates.

Monthly US Interest Rates Since 1975

Chart of interest rates since 1975. Universal life insurance written in the 70s and 80s depended on high interest ratesInterest rates are a component of the policy an insurance agent could tinker with to make it look better on paper. And the higher the interest rate proposed to the client, the better the policy looked.

Of course, the problem over the past several decades is that we have experienced a historically-low interest rate environment.

And since interest rates projected in the policies were WAY higher than what actually happened, many improperly-designed universal life insurance policies have had dramatic premium increases forced on policyholders to keep the policy in force.

We’re talking 200% premium increases, year-over-year, mostly to fixed-income seniors who cannot afford such crazy premium-increases.

Here’s the problem…

Nobody can predict interest rates with perfect accuracy.

A lot of agents assumed best case interest rate scenarios when they sold these policies to unsuspecting consumers.

But very few people can accurately forecast where interest rates will be 5 to 10 years from now.

I have been in the business since 2011, and I have seen many seniors with these older universal life insurance policies.

These are people in their 60s and 70s. Many feel deceived. They feel used. The agent claimed the universal life insurance policy was as certain as the sunrise.

Fast-forward 25 to 30 years later, seniors are experiencing or will experience imploding universal life policies.

The good news is that guaranteed universal life insurance policies are MUCH safer than those sold back in the day. The no-lapse guarantee preventing premium increases makes the policy more palatable to many consumers.

What is nice about guaranteed universal life plans is that they are very similar to a whole life plan.

The design of a guaranteed universal life plan is to guarantee that the risk of lapsing due to a premium increase does NOT happen as long as that predefined premium is paid on time.

And what makes no-lapse universal life insurance more appealing than whole life insurance is you may qualify for more coverage per premium dollar. This is very useful if you’re looking to maximize death benefit payout.

That’s a quick primer on what guaranteed universal life is today versus its earlier form in the 80s and 90s.

Bottom line, the no-lapse rider on guaranteed universal life insurance makes the insurance product a better deal than the earlier version without the guarantee.

Why Would Seniors Consider No-Lapse Universal Life Insurance?

The top 5 reasons to purchase a Life Insurance Policy

Let’s spend time discussing why a senior citizen may consider buying a guaranteed universal life insurance program.

Final expense protection

Do you want life insurance to cover your funeral expenses?

A guaranteed universal life insurance product may be the answer.

I am wrapping up a case for a couple in South Carolina where a husband and wife want $25,000 in coverage.

The primary motivation for $25,000 in coverage was to pay for their burial expenses and to mop up any remaining debt.

They didn’t want to spend $300 to $400 monthly for whole life insurance. That premium was too high.

Instead, with universal life insurance, they are getting the same amount of coverage for approximately half the premium.

Even better, my clients cannot outlive their coverage and will never experience premium increases as long as they pay agreed-upon level premium.

So consider no-lapse universal life insurance coverage if final expense protection is important.

Replacing your income

A no-lapse universal life insurance policy is great for seniors looking to replace lost income when a spouse passes away.

Many times the motivation stems from a non-transferable pension. The surviving spouse does not receive the deceased spouse’s pension, causing a large loss of household income. that’s nontransferable upon death to the surviving spouse. What do you do to replace the lost income?

This is where a guaranteed universal life plan comes in handy.

First, universal life insurance doesn’t cancel due to age or health. So you don’t have to worry about outliving your life insurance coverage like risk seniors have when taking out term life insurance.

Second, guaranteed universal life insurance arguably provides the best source of maxed-out death benefit a permanent policy can provide.

What this means is that no-lapse universal life insurance plans may provide more cash payout to your beneficiary than burial insurance or whole life insurance coverage.

Leaving money behind

Maybe you just want to leave the most money behind to a loved one.

Typically, a permanent life insurance product like a guaranteed universal life plan are perfect for seniors looking to do just that.

Bottom line with guaranteed universal life insurance, it’s all about peace of mind.

Simply put, you pay your premium as prescribed to keep the no-lapse rider in effect. And in exchange you have permanent coverage you cannot outlive with no worry about a premium increase.

Not too bad, huh?

Concerns About Seniors Qualifying For Coverage

Let’s discuss some basics about qualifying for guaranteed universal life insurance, and what roadblocks some seniors will experience.

First, the minimum coverage for a no-lapse universal life insurance policy is $25,000.

If you want LESS than $25,000 in life insurance coverage with the same benefits, check out getting a whole life burial insurance plan instead. Minimums start at $1000 in coverage.

And like most life insurance policies, expect to answer a series of detailed health questions.

This is the most difficult aspect to guaranteed universal life insurance. Compared to burial insurance, you may experience more difficulty in qualifying for coverage.

Make no bones about it. If you want guaranteed universal life insurance, you must have GOOD health.

What does “good health” mean? It’s just going to depend.

Seeing if you may qualify doesn’t cost you anything. I’d recommend you give me a ring at 888-626-0439 or message me here if you’re interested and want to know your chances in qualifying.

Buy Life Insurance For Burial works with different insurance companies, so we’ll shop the major life insurance carriers to see who offers the best options.

And one final bit of good news. Most of these plans will not require an exam or physical. If you want to qualify for a VERY large guaranteed universal life insurance policy, you SHOULD expect a physical.

Smaller-size policies don’t require exams anymore. They will just do an in-depth analysis of your medical records.

Guaranteed Universal Life Insurance Rates

Let’s go ahead and take a look at some rates.

$50,000, no lapse universal life plan for a non-smoking, 65-year-old male

You are seeing a $50,000, no lapse universal life plan for a non-smoking, 65-year-old male.

For $50,000 in coverage, you’re looking at monthly premiums of approximately $120 to $150 for standard or preferred underwriting.

It could be higher, depending on whether your health has rated it up.

Let’s say you’re in good enough health to get these rates. Let’s compare this to a whole life plan that would use simplified issue underwriting, in very similar manner, meaning no medical exam. You can see the stark contrast.

50,000 Whole Life Plan

Here we are looking at the most competitive $50,000 plan I know of, which is $260.57.

At the highest price with a standard rating a $110 difference between this simplified issue whole life insurance product than a no-lapse universal life plan.

You can see a huge difference if you get preferred rates with the no-lapse universal life. That’s incredible!

That’s the benefit of no-lapse universal life plans. If you quailfy, they get you the same benefits that you would find in a whole life product.

Similarly, we’re going to look at a female 65-year-old non-smoker for $50,000, no lapse universal life coverage.

Premiums are $100 to $125, depending on which of the programs you qualify for. It could be more than that if you get a rated plan.

$50,000/65 female non-smoker, no lapse universal life coverage

Let’s look at a whole life plan and compare.

You’re looking at $211 for $50,000, for a 65-year-old non-smoking female. Again that compares to the price of $101, maybe $120.

$50,000 Whole Life Plan for a 65-year-old non-smoking female

Huge difference, right?

If you are looking at large amounts of coverage like this and you need permanent protection, this is a good starting point.

At this point, let’s go up the age range, to keep showing you some differences in prices.

If we go to a 70-year-old, $50,000 will be between $145 to $175.

If we go up to 75, you are looking at somewhere between $188 and $230 depending on the company.

If we go up to 80, you are looking at $286 to $368. Somewhere in there, if not a little bit higher.

$50,000/70-year-old male

Let’s look at 70-year-old males.

For $50,000 in coverage, $220’s through $300’s.

If you’re looking at a 75-year-old male, $50,000 non-smoker, mid $300’s to upper $400’s.

Then an 80-year-old male, somewhere between upper $400’s to $700’s.

$50,000/ 75-year-old male

$50,000/80-year-old male

Large difference there. That is normal if you are an older male. It’s going to cost more.

Keep in mind the minimum coverage $25,000. Also keep in mind that we can do MUCH higher than $50,000.

We have a lot of flexibility in what we can do as far as getting as much life insurance as you need.

How To Apply For A Policy

As you can see, I love this product.

I think no-lapse universal life insurance is great for seniors who:

  1. Are in good physical shape,
  2. Want as much death benefit coverage as possible, and
  3. They want a plan to pay off a mortgage, replace income, leave money behind, or pay final expenses.

It’s pretty quick to get qualified, too.

Usually we can get an approval within several days or several weeks.

It depends on whether we need your doctors’ records to determine insurability.

Here’s how to get started

Let’s say you want to qualify for one of these guaranteed universal life plans. How do you do it?

The process is very simple.

Pick the agent you want to work with. Right now, I nominate myself. I can definitely help you with this.

We would do a quick phone interview. I ask you what you’re looking for, what your needs and goals are, and ask you health questions.

Within 10 minutes, I can give you an accurate estimation as to what premium you’ll potentially qualify for.

Owner of David Duford with his son

My goofball son and I thank you for reading, and hope you’ve gained truly valuable information on your search for life or burial insurance. If you’re ready to discover your options for life or burial insurance, call me at 888-626-0439 now for your free life insurance quote!

Assuming you like what you see, we would do an application via the phone or through email.

Several days to several weeks later, we’d find out the company’s decision. And if approved, you’d receive your policy within several days of the decision.

That’s it. Pretty simple process. Again, no examinations necessarily required.

To get started,

  • Click here to send me a quote request, or
  • Call me and my team at 888 636 0439. If you don’t reach us, leave a voicemail. We’re typically slammed daily taking phone calls from clients.