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The Topic Of This Article Is Guaranteed Universal Life Insurance For Seniors.
Most likely you’re here because you have heard me talk about guaranteed universal life insurance in my other videos or posts about permanent types of coverage available for seniors. Maybe you have been quoted on a guaranteed universal life policy. You are trying to do some due diligence to figure out if this is the appropriate kind of plan for you for your life insurance needs. Guaranteed life insurance.
My goal is to give you as much information as possible to help you to determine if a guaranteed universal life plan for senior is an appropriate life insurance purchase decision.
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:
Why Get Guaranteed Universal Life Insurance For Seniors?
Who May Qualify For Guaranteed Universal Life Insurance?
Guaranteed Universal Life Insurance Rates And Carriers.
We will define what a guaranteed universal life plan is. We will make sure that we are on the same page.
We will answer the question ‘Why is it a good idea to consider a guaranteed universal life insurance plan for seniors?‘. We will talk about the qualifications needed for guaranteed universal life plan. Then we will look at insurance rates and carriers.
We will give you some examples of different price ranges and the different amounts of coverage that you can get. We will give you some final thoughts on the product itself and how to apply if that’s something of interest to you.
What is Guaranteed Universal Life Insurance?
You are probably wondering what guaranteed universal life coverage is. Let me give you my definition. Guaranteed universal life coverage, also known as no lapse universal life insurance, provides a death benefit at a guaranteed fixed price.
This is the main thing as long as the premium defined in the policy is paid. Most commonly sold universal life coverage plans are guaranteed typically to 121. Sometimes they go to 100, but the concept behind them is that they are permanent protection for the entirety of your life.
In exchange for that permanent protection, there is an option in there that makes it guaranteed universal life. The suggested premium is well understood in advance, there’s no confusion about it. As long as you make that premium on a monthly basis, you are guaranteed that this policy will not lapse.
I will tell you about the history of universal life insurance. A lot of these plans used to lapse back in the day, because they did not have this rider: a premium, or no lapse, guarantee as long as the specific premium was made.
This is why this product is particularly unique from other universal life plans. A lot of them simply don’t have a guaranteed premium.
With a universal life plan, also known as a flexible or adjustable life plan, you can adjust the premiums up and down. This is unlike a whole life plan, which is also permanent protection.
But you must pay the premium if you want to keep the thing enforced. The concept of universal life was that it allowed for flexible premiums. If you went under hard times and you did not want to lose your life insurance coverage, you would just lower your premiums for a period of time.
The problem in the history of universal life is that when it was sold a lot in the eighties and the nineties, there were a lot of these variable cost factors to the policy. One of those factors was the interest rates. Insurance agents, in order to make a sale, would show the policy at an interest rate that was thought to be high or would not be the norm.
The problem is that nobody can predict interest rates with perfect accuracy. A lot of agents assumed the best case scenarios when they sold these products.
What matters to you is that what was shown was the best case scenario with the lowest price necessary to keep the policy afloat and enforced. Invariably what happens in life is completely unpredictable.
Life quotes life insurance
The factors that affect the cost of the universal life plan turned against what was originally a promise from the agent. This caused eventual price increases over the course of the lifetime.
I have been in the business since 2011. I have seen good people trusting their life insurance agent with these universal life plans. 20, 25 years into the plan, they started to have price increases.
These are people in their sixties and seventies. Many now have trouble qualifying for any life insurance at the same price and at the same amount of coverage.
At this point, a lot of them feel deceived. They feel used. The agent essentially claimed that if they just pay this premium, it’s permanent protection.
The agents claimed that if they did what he told them to, there would be no worries about price increases. Now there are a lot of people that have these exploding or imploding policies.
The factors of the policy meant that, as they get older, there was a cost component to ensuring them at that age. If the universal life policy was not designed correctly, then ultimately the cash value in the plans ran out. The policy then required more premium paid in to keep it enforced.
These people thought their plans were fine and that they wouldn’t get rate increases. And they never saw rate increases. They paid diligently and it was the same price.
Invariably, in their sixties and seventies, prices started going up, becoming more expensive. People had to lose their coverage because they couldn’t afford it on a meager social security retirement income.
That is how a universal life plan was inappropriately designed. I would not sell a plan like that unless I used the most conservative of setups.
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 that lapse, that risk, does not happen as long as that predefined premium is paid on time, religiously.
A lot of people can do that and will agree to something like that. Again, the advantages of a guaranteed universal life plan are very similar to whole life insurance plan. The premiums don’t go up, the coverage won’t cancel and you are fully protected.
The biggest difference with guaranteed universal life is that you are going to get a lot more coverage for your dollar relative to another permanent product like whole life insurance.
That’s a quick primer on what guaranteed universal life is, in comparison to what universal life plans have historically been. In my opinion, guaranteed universal life is a very good step up. It is an improvement in the product and it will specifically help people that want permanent protection. They will get the most out of it for what they pay for it.
Why would seniors get a guaranteed universal life insurance program?
Here are some reasons why my clients in the past have purchased a guaranteed universal life plan. One is final expenses.
I am wrapping up a case in the southeast where a husband and wife wanted $25,000 in coverage. They didn’t want to spend the three or four hundred dollars a month for whole life. They are spending literally half that because their houses are good enough to qualify for a guaranteed universal life plan. They get a better bargain for the premiums paid, at an advanced age, which also contributes to the cost factor.
Another component is income replacement. Same scenario. You will have people who have a pension that’s nontransferable upon death to the surviving spouse. What do you do to replace the lost income?
Well, a guaranteed universal life plan is great because it doesn’t cancel. It’s a very good use of your money and if you can qualify for it, it’s going to max out the death benefit paid to your surviving spouse. This will then allow them to live a little bit more comfortably for a little bit longer. and not worry about the differential in losing your pension income.
Maybe you just want to leave the most money behind to a loved one for any circumstances, you don’t care about cash value or any of those components. Typically, a permanent life insurance product and guaranteed universal life plan are great, especially for seniors. That is really why people buy it.
Somebody approaches me and says, Dave, I just want to leave as much as I can afford for my loved ones. If they are healthy enough to qualify for guaranteed universal life plan, it is the perfect product to use.
Again, there is more coverage per dollar compared to certain whole life insurance products. It’s all about peace of mind. You pay your premium, you do exactly as the plan tells you to. You’ve got the coverage in force, you know, whenever you die, it’s going to pay.
Guaranteed issue whole life insurance rates and companies
Let’s look at some companies and rates. We will give you an idea of how this works so that you can better understand what your options are. I’m going to compare this to whole life at the same amounts so you can see the dramatic difference in price.
Here is a basic overview of guaranteed universal life. The minimums are $25,000 in coverage. That’s with the companies that I like to use. That’s the minimum.
There are health qualifications. You are going to have to be pretty healthy to qualify for this. I cannot promise you that you will qualify. This comes down to your unique scenario.
You may not qualify for it, but if you are interested in this, I’ll do my best to see if we can. And that’s why I’m a broker. We work with different companies, I would shop to see who’s going to give you the best price.
Sometimes there are conditions that these products won’t accept. Because of some of the advantages here, the many times guaranteed universal life wants you to have a little bit better health than some of the products that are out there.
A lot of these plans will not require exams as long as you pick the right companies. They will just do an in-depth analysis of your medical records.
Let’s go ahead and take a look at some rates.
You are seeing a $50,000, no lapse universal life plan for a non-smoking, 65-year-old male.
For $50,000 in coverage, with the company that I like to use, which would be Sagicor, 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.
Here we are looking at the most competitive $50,000 plan I know of, which is $260.57. There is, at the highest price, with standard pricing, $110 difference between this simplified level with a very competitive product and the magic core: no-lapse universal life plan.
You can pay a $150 for standard rates, you may even pay less than that for your preferred rate. You can see that there is a huge difference if you get preferred rates with the no-lapse universal life. You are looking at a difference of about half the price if not less than that.
That’s incredible. That’s the benefit of no-lapse universal life plans: They can do this for you if your health qualifies. They get you the same benefits that you would find in one of those whole life products.
Similarly, we’re going to look at a female 65-year-old non-smoker for $50,000, no lapse universal life coverage, same demonstration. Sagicore is a great company for this. $100 to $125, depending on which of the programs you qualify for. It could be more than that if you get a rated plan.
Let’s look at a whole life plan and compare. If we look at a term life insurance plan, again 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.
Huge difference, right? If you are looking at large amounts of coverage like this and you need permanent, this is a good starting point, you can see.
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.
It’s going to depend. Let’s look at 70-year-old males. We started with 65. So if we 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.
30 year level term life insurance
Large difference there. That is normal if you are an older male. It’s going to cost more.
The minimum coverage amount is $25,000. We can do less coverage. It will go up to hundreds of thousands so we can go well above and beyond the $50,000 number if that’s something you felt was important. We have a lot of flexibility in what we can do as far as getting as much life insurance as you need.
I love this product. I think it’s great for seniors who are in good shape, who want as much death benefit coverage as they can, to leave behind for mortgage pay down, income replacement, final expenses, or just the gift of love.
If you can qualify for it and you can follow how the plan is designed, which is to pay the same premium every month and never reduce it, then this particular plan is well worth the spending. The company I like to use does not require an exam up to $100,000 in coverage for most seniors.
Usually we can get it approved within a day or two, sometimes a week, maybe two weeks. It depends on whether we need extra doctors records. I like these plans because I don’t have to organize and the examination and they are still very competitively priced.
I like this plan a lot. I can’t help it. It’s something I think is really valuable for the right particular circumstance.
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 would figure out what you’re looking for, what your needs and goals are, ask you some health questions. Literally ten minutes later I can give you an estimate of what the quote would be.
If you like it, we would do the application via the phone or most likely through email. We would submit the application and usually seven days to a week or two later we find out if your coverage is approved or not, then you get your policy mailed.
That’s it. Pretty simple process. Again, no examinations necessarily required.
If you like the idea and you want see if you can qualify for one of these guaranteed universal life policies, you can do two things:
Go to my website, www.buylifeinsuranceforburial.com. Click on the contact box at the top, or the message box at the bottom. Send me a message saying what you’re looking for and we can start a conversation that way.
Call me live at 888 636 0439. I prefer to talk to my clients and I’m usually available. If you don’t reach me, leave a voicemail, I’ll get back to you as quickly as possible.
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Thank you so much for watching. I hope you got something valuable out of this and we’ll see you next time.