Variable Universal Life Insurance Vs Guaranteed Universal Life Insurance

Making a choice between variable and guaranteed universal life insurance can be daunting if you don’t have all the facts. In this article, we compare these two universal life insurance policies so that you can make informed decisions.


With variable universal life insurance, premium is not fixed. You can decide the amount of premium you want to pay and at what times you want to pay. However, you can only make these decisions within a certain limit set by the life insurance company. Also, you could pay your premiums in one installment or use your accumulated cash value to pay off your premiums. Unlike variable universal life insurance, guaranteed universal life insurance premiums are fixed at a definite amount.

Cash value

Variable universal life insurance builds up cash value for you. Also, you are free to invest your accumulated cash value in your preferred bonds, mutual funds, stocks, and money market securities. However, the returns on your investment may have either a positive or negative effect on your cash value and death benefits. Even though variable universal life insurance offers cash value, guaranteed universal life insurance has no cash value build up. You are only entitled to your death benefit when your guaranteed universal life insurance expires. Besides, this death benefit is not affected by external market forces.

Death benefit

Variable universal life insurance gives you the opportunity to adjust your death benefit to suit your needs. You could increase or decrease your death benefit anytime you want. In contrast to variable universal life insurance, guaranteed universal life insurance does not give you the option of raising or reducing your death benefit. Your guaranteed universal life insurance has a death benefit that is set at an amount that cannot be changed.