Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A guaranteed universal life (GUL) policy is designed primarily to:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Guaranteed universal life is a form of universal life built to deliver permanent death protection with certainty. It guarantees the death benefit and a level premium for the life of the policy as long as the required premium is paid, and it prices using guaranteed interest and maximum cost-of-insurance assumptions. Cash value is usually minimal because the design deliberately forgoes cash accumulation to make the guaranteed premium low. GUL is frequently used where a client needs lifelong coverage without the savings element of a traditional whole life policy.
Why the other options are wrong
- A) GUL does not chase equity growth; its cash value is minimal and it carries no investment risk because it is not tied to separate accounts.
- C) The defining trait of GUL is precisely its guarantee that coverage continues for life if the level premium is paid.
- D) GUL is permanent coverage, not term, and has no mandatory conversion requirement.
Memory hook
GUL = term-like certainty inside a universal life wrapper.