Group Universal Life Insurance
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Group Universal Life Insurance

Group Universal Life Insurance Harman Stone

Group universal life insurance is life insurance that is offered by an employer as part of an overall employee benefits program.  The premium is generally lower when compared to an individual universal life insurance policy.  Universal life insurance is permanent life insurance - it provides coverage for life.  Like other types of permanent insurance, such as whole life, universal life insurance provides a guaranteed death benefit that will be left to the insured's heirs.  Universal life insurance is also more flexible than term or whole life insurance.  Insurance premiums can be adjusted, if necessary, as long as there are sufficient cash values to cover insurance costs.

Group universal life insurance offers permanent insurance - often up to $1,000,000 - that is guaranteed renewable to age 95 and an optional cash accumulation account that earns tax-deferred interest at competitive rates.  Often there is an accelerated death benefit provision that is included.

Key features may include:

  • At death, the face amount with accrued cash values are payable
  • No administrative fees or surrender charges
  • Often payments to the cash account may be skipped.

Guaranteed universal life insurance is often called “no lapse” or “secondary guarantee” life insurance.  While term life insurance will provide a guaranteed level premium and guaranteed death benefit for a limited period, you will often outlive the guaranteed level period and be forced to secure a new policy at an older age if your health conditions allow.

Whole life insurance will provide a guaranteed level premium and guaranteed death benefit beyond age 100, as well as, provide a guaranteed cash value. However, whole life insurance will have the highest premium because of the guaranteed cash value.

So, what other options are there if you do not want guaranteed cash value in whole life insurance, cannot afford the whole life premiums and dislike term life insurance with its lack of long term guaranteed level premiums?  A possible solution is group universal life insurance.

Some aspects associated with Group Universal Life Insurance:


  • Premiums can be level for a lifetime.  You can select the age you want a death benefit guaranteed to - age 90, 95, 100, 105, 115 or 120.
  • The length of premium payments can be structured.
  • Interest rate volatility won't affect premium payments.
  • Relatively inexpensive permanent life insurance compared to others - the premium is calculated to maintain level premium until death.
  • Comparisons between one group universal plan and another are relatively simple since there aren't many components in the plans.
  • Cash surrender values of other permanent products can be transferred to this group universal life plans without current income taxation on policy gains utilizing a Section 1035 Exchange.


  • Group universal life insurance may not have any cash value - depending upon how it is funded - unlike some other permanent life insurance.
  • While premiums may be lower than whole life insurance - they will generally be higher than term insurance.
  • The most critical aspect of Group Universal Life Insurance is the required timeliness of premium payments to maintain the guaranteed level premium.  Other types of policies can cover the required premiums to maintain the death benefit.  However, a missed or late premium payment can jeopardize the guaranteed premium feature.

Life Insurance for Your Employees

In today's tough times, you want your business to compete for the best employees.  One of the best ways is to provide a great benefits package that includes life insurance - making your small business even more competitive for key employees.

In addition to attracting new employees, things happen in life.  You want your employees and their families to be prepared.  Group Universal Life Insurance can provide exactly that protection.

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