That is a great question! "Guaranteed premium" means that the price stays the same - it's "guaranteed". This is typical in most whole life policies, but can be different in term life policies. For example, you might purchase a straightforward 10 year term policy. In 99.9% of those policies, your premium payment is the same from first payment to the last payment. In a term policy like those offered by AAA or AARP, however, their premiums will increase as you age, and pass through each "age band" (55-59, 60-64,65-69,70-74,75-79) until you reach your 80th birthday, and the policies end. They will "Guarantee" your price through each band, but increase it in the next one, and "guarantee" that rate until the next. If you have questions, please drop me a line, I'm always happy to help. Thanks for asking!
Guaranteed premium life insurance is life insurance where the premium is guaranteed not to go up for a certain amount of time.
In term life, this is usually (but not always) the number of years in the term. When the term ends, the premiums usually jumps very high.
In universal life, you can often select a period of time where the premium will not go up and the policy will not lapse. If you want the premium to not go up for your lifetime, you would pick a universal life policy with the premium locked in to age 100 or longer.
In whole life, the premium is usually guaranteed to age 100, at which time the policy will pay you the face amount if you are still alive.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Guaranteed premium life insurance simply means that the premium is guaranteed to be unchanged from what was promised in the contract. It is not the same as guaranteed Level premium, which means that the premium at issue will never increase. So unlike guaranteed level premium, with guaranteed premium the premium may well increase over time. Also with some Universal life policies while the premium is guaranteed, the cost of insurance is not, so as a result if you do not pay more that the guaranteed premium your policy will eventually lapse for non payment once the cash value is exhausted. Beware!
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
“Guaranteed premium life insurance” is a life insurance policy in which you get a contractual guarantee that the premium will not change. It will not increase, and it will not decrease.
That is a very good deal. You do not want to have to worry about your premium changing. This product is, after all, supposed to be the foundation of your financial portfolio. As such, it should be dependable.
Virtually all life insurance products available now provide premium guarantees. It’s really just a question of how long the guarantee will last.
Term insurance gives you guarantees for a specified amount of time. Could be 10 years, 15, 20, 30, etc. After that, watch out. The price could go skyhigh.
Universal life could also give you guarantees for a specified amount of time. The interesting thing about this product is that since it has a flexible premium, you can determine how long you want that guarantee. It could last from a few years, to your lifetime. You can kind of make it function as “permanent term insurance.” No guaranteed cash accumulation, but a lifetime guarantee on the premium. And on the death benefit, by the way.
Whole life typically comes with a lifetime guarantee on the premium. That’s the way the product is designed.
I think you can appreciate that the longer you want the guarantee, the higher will be the premium. You get what you pay for.
Regional Marketing Director, Capital Choice Financial Group,
Quite simply guaranteed premium life insurance is life insurance where the premium is guaranteed to never go up for a certain period of time. For example, level term life insurance is purchased in 10,15,20,25,or 30 years. Be aware of this when purchasing term life because there is such a thing as annual renewable term where the premium goes up every year. Here is another warning, some universal life policies(which I never recommend) are a combination of annual renewable term and a cash value where most of the time the policy needs more premium to keep it in force sometime in the future and you, the client, are unaware of this.
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In term life, this is usually (but not always) the number of years in the term. When the term ends, the premiums usually jumps very high.
In universal life, you can often select a period of time where the premium will not go up and the policy will not lapse. If you want the premium to not go up for your lifetime, you would pick a universal life policy with the premium locked in to age 100 or longer.
In whole life, the premium is usually guaranteed to age 100, at which time the policy will pay you the face amount if you are still alive.
That is a very good deal. You do not want to have to worry about your premium changing. This product is, after all, supposed to be the foundation of your financial portfolio. As such, it should be dependable.
Virtually all life insurance products available now provide premium guarantees. It’s really just a question of how long the guarantee will last.
Term insurance gives you guarantees for a specified amount of time. Could be 10 years, 15, 20, 30, etc. After that, watch out. The price could go skyhigh.
Universal life could also give you guarantees for a specified amount of time. The interesting thing about this product is that since it has a flexible premium, you can determine how long you want that guarantee. It could last from a few years, to your lifetime. You can kind of make it function as “permanent term insurance.” No guaranteed cash accumulation, but a lifetime guarantee on the premium. And on the death benefit, by the way.
Whole life typically comes with a lifetime guarantee on the premium. That’s the way the product is designed.
I think you can appreciate that the longer you want the guarantee, the higher will be the premium. You get what you pay for.
There you go. What else do you need to know?