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Best Universal Life Insurance Companies and Policies
Universal life insurance appears to have taken over the private permanent life insurance world that was once dominated by whole life insurance. As a result, more and more companies are focusing on innovative universal life insurance policies that offer many advantages vs traditional whole life insurance.
Our goal is to make our readers aware of the best universal life insurance companies and policies available based on our personal experience.
Please note: What makes one company the “best” compared to another is subjective. Each company and policy should be examined by taking the individual needs of the potential insured into account.
Before we review our top ten best universal life insurance companies we would like to spend a moment familiarizing our visitors with the different types of universal life available. However, if you wish to proceed to the top ten list, simply click take me to the top ten list.
Universal life is a form of permanent life coverage, meaning it lasts your entire life, that pays out a tax free death benefit. However, some UL policies actually last your whole life, while others act similar to term life insurance, ending upon an appointed term length or age.
Universal life insurance comes in different flavors. We listed the five main categories available.
Types of universal life insurance
Guaranteed Universal Life (GUL)
GUL offers permanent coverage with a guaranteed death benefit. The death benefit is not affected by the policy’s cash value as it is with VUL (see below). Flexible death benefit periods of 90, 95, 100, 105, 115 or 121 can be chosen. The premium is lower depending on the age the GUL goes to. However, once that age is attained, the policy ends, so choose wisely. GUL to age 120 or 121 is the only “sure” thing.
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- Guaranteed death benefit
- Lower cost than whole life
- Fixed premiums
- More expensive than term life
Indexed Universal Life (IUL) or Fixed Index Universal Life (FIUL)
Also referred to as Fixed Index Universal Life (FIUL), an IUL provides permanent insurance that builds tax-deferred cash value, based in part on the performance of a market index, such as the S&P 500. The policy is tied to a guaranteed minimum interest rate, which acts as a protection against market loss. Premium payments and the death benefit are flexible and typically can be adjusted. You can read more by checking out our articles:
- Each year gains are locked in
- Protection against market loss
- Max cap limits potential gains
- More expensive than term life
Variable Universal Life (VUL)
If there is one word that describes VUL it is flexibility. This product provides permanent insurance that combines life insurance with the opportunity for greater tax-deferred cash value accumulation through investment choices. Depending on your choice of investment, a VUL policy can partake of the gains, as well as the losses, associated with market risk of the chosen fund. A Variable Universal Life cash value account fluctuates in conjunction with the chosen managed investment option, typically made of choices such as small cap, mid cap, large cap, emerging markets, etc.
- Greater tax deferred cash value accumulation
- Greater flexibility
- Combines investment choices with life insurance
- Losses can affect death benefit
- Not for the faint of heart
- More expensive than term life
Single Premium Universal Life (SPUL)
SPUL offers permanent protection with the benefit of a one-time lump sum payment. You can choose from the various universal life products, including GUL, VUL and IUL. For more on this topic, please see single premium life insurance.
Survivorship Universal Life (SUL)
Also known as Second to Die Universal Life, SUL provides coverage on two people, typically husband and wife but can also be business partners. The death benefit payout occurs on the death of the surviving spouse. For more, see survivorship life insurance.
Term Life vs Universal Life
A recurring question we get is what is the difference between term life vs universal life insurance. Term life lasts for a period of time, "the term," which is typically 10, 15, 20 or 30 years. Depending on the carrier, once the term ends the policy is renewed annually, but at an increased premium. Universal life is a type of permanent life insurance.
Companies Offering Universal Life Insurance
The following is our top ten list. It is comprised of the companies and policies we prefer. However, the list is a fluid one and we reserve the right to change it on a whim or because a client would be better suited with a different company or policy. However, the only way to determine which company is truly the best one for you is to speak with you. Please give us a call for a free life insurance consultation today!
Top 10 Best Universal Life Insurance Companies and Policies
Please note: We order our top ten lists alphabetically because there is no one “best” universal life insurance company. Each client is unique and requires a careful assessment of what company and policy is best for that specific client from among the different types of life insurance policies available.
American General Secure Lifetime GUL 3:
Guaranteed universal life offering a guaranteed death benefit regardless of the policy’s cash value. This policy offers premiums based on a number of years, a specific age, or you can purchase a paid-up policy.
The policy can be surrendered after 20 years for 50% return of premiums paid, or in year 25 for up to 100% of premiums paid, not to exceed 40% of the face amount.
If circumstances change and you no longer need as much coverage, the death benefit amount can be reduced, which will lower premiums.
Also available as survivorship life insurance.
Secure Lifetime GUL 3 Riders
Accelerated Access Solution: if the insured suffers from a qualifying chronic illness, this life insurance rider will provide monthly payments until the death benefit has been exhausted.
Lifestyle Income Solution: at age 85 the insured may be eligible for supplemental income available for use for any purpose.
TermLife2Go weighs in: AG’s Guaranteed Universal Life policy is a great choice for those who want permanent protection without the high price of whole life. American General the company is a great fit for many, and especially clients dealing with pre-existing conditions that would categorize them as high risk life insurance, due to AG’s liberal underwriting in contrast to other carriers.
For more, see our American General review.
American National ANICO Indexed Universal Life
The IUL policy is available in both a fixed interest crediting option, which correlates to the company declared interest rate, and index crediting option, which is subject to the performance of a specific index. The policy is currently indexed to the S&P 500. A fixed death benefit or increasing death benefit is available. The guaranteed minimum cap is 3% and the lowest interest credit is 0%, regardless of the performance of the index.
TermLife2Go weighs in: American National is a solid choice for universal life insurance. Depending on your age bracket, ANICO may offer some of the most competitive rates in the marketplace.
For more, see our American National review.
Banner Life Life Step UL
Legal and General America is the parent company of Banner Life and William Penn in NY. The company’s universal life policy is called Life Step UL.
The policy provides permanent insurance with flexibility. Customers who choose this product can create a plan that allows him or her to choose the number of years to make premium payments. The policy is available for clients up to age 85.
TermLife2Go weighs in: Similar to American General above, Banner Life is a top choice for clients who are considered “substandard” health classifications. Banner Life offers some of the most competitive rates for diabetic life insurance, among other health risks.
For more, see our Banner Life review.
John Hancock Protection Survivorship IUL
John Hancock offers a full suite of Universal Life Insurance, including Indexed and Variable.
This second to die indexed universal life insurance policy provides great protection for spouses or business owners. There is a built in floor of 0% which protects against a negative return. The policy is currently indexed to the S&P 500. Available up to age 90.
For more information, read our review of John Hancock life insurance policies.
Mutual of Omaha Guaranteed Universal Life Plus
With a minimum guaranteed interest rate of 2%, Mutual of Omaha’s GUL products provide competitive pricing and great product features. The policy allows changing premium payments and the ability to adjust the death benefit, for maximum flexibility. After year ten, policy loans have a very low interest rate, making this policy an excellent choice for those who value tax-deferred cash value accumulation, with the prospect of withdrawing cash from the account. A terminal and chronic illness rider and disability rider are among the different add-on riders available.
TermLife2Go weighs in: Mutual of Omaha should always be on your radar when considering a guaranteed universal life insurance policy.
For more, see our Mutual of Omaha review.
North American Company BuilderIUL
North American has three primary IUL policies: BuilderIUL, RapidBuilderIUL and GuaranteeBuilderIUL.
The policy offers many index choices, including the S&P 500, the Russel 2000 and the Nasdaq 100. At 3%, North American Company offers one of the higher fixed account minimums in the marketplace.
TermLife2Go weighs in: Solid choice for indexed universal life insurance. The policy is competitively priced, often ranking in the top three in terms of rates. Add to that the policy’s many benefits, and you can see why North American is one of our favorite “go-to” companies.
For more, see our North American Company review.
Principal Financial Universal Life Protector IV
Available for clients up to age 85, Principal Financials UL policy offers the same flexibility as many of the other top carriers. The policy comes with an accelerated benefits rider at no additional cost.
For key person business life insurance, the Salary Increase rider offers owners the ability to increase the death benefit by $30,000 increments, up to $1,000,000 of additional coverage, with no proof of insurability.
TermLife2Go weighs in: Principal Financial is an innovative company, offering one of the best no medical exam policies for preferred best clients in the marketplace.
For more, see our Principal Financial review.
Protective Life Custom Choice UL
If you are more concerned with price then you are with cash value accumulation, Protective has the policy for you. Often mistaken for term insurance, Protective Life’s Custom Choice UL is permanent life insurance coverage.
Level premium payments periods of 10, 15, 20, 25, 30 year plans or to age 105 or 121 plans are available. Once the initial fixed benefit period ends, the policy’s face amount decreases, but the premium payment remains the same. Once the face amount decreases to $10,000, the premium will begin to increase.
A conversion option is available on the 10, 15, 20, 25, 30 year plans as well, if you decide you want permanent universal life insurance. The Income Provider rider can be used to further decrease an already industry leading low policy premium.
TermLife2Go weighs in: for our clients focused on getting the best bang for their buck in terms of price, Protective Life is one of the best universal life insurance options available.
For more, see our Protective Life review.
Sagicor Sage No Lapse Universal Life (Sage NLUL)
Offering face amounts up to $400,000 for clients age 65 and under, no exam universal life insurance from Sagicor is an excellent option for those who want to avoid a life insurance medical exam. Preferred health classifications for no exam life insurance are available through Sagicor, making it a competitive choice for those considering either term or universal life, but have Trypanophobia, that is, the fear of needles.
Other reasons to consider no exam versus taking an exam is to avoid having any surprises pop up on your lab results. Finally, besides the convenience of no exam coverage, it also provides quick coverage for things like securing an SBA loan or fulfilling a divorce decree.
TermLife2Go weighs in: Sagicor provides a competitive no exam universal life insurance option. Need life insurance but don’t want the hassle of an exam? Consider Sagcor No Lapse Universal Life.
For more, see our Sagicor review.
Voya Financial Indexed Universal Life-Accumulator
Voya IUL-Accumulator offers preferred coverage with no lab work for qualifying clients 50 and under on face amounts of $500,000 or less. However, for healthy clients that may qualify for the best health risk category, taking an exam will probably offer a lower premium and more savings over the long term.
There are many more top universal life insurance companies available. This was simply our attempt to list our current favorites.
However, don’t be surprised if we recommend any one of the other “best” universal life insurance companies and policies we work with, including Prudential, Transamerica and MetLife, to name a few. After all, our primary objective is to serve our clients to the best of our ability by recommending the company we deem best for each unique client. That is the TermLife2Go difference!