West Coast Life now offers a permanent life insurance product called “ModLife UL”. It’s a lifetime guaranteed universal life, guaranteed coverage to age 121 at fixed rates. That’s plural: rates. Instead of the typical one fixed rate in all coverage years, ModLife UL is about half price of other carriers years 1 to 5, then premiums increase in years 6 to 10, and then levels out in year 11 and thereafter. The catch is that those 11 and thereafter premiums will be quite a bit higher than the level-from-day-one guaranteed UL.
Pros: Good in situations where money is now tight, but will free up because you’ve paid off the mortgage or some other obligation, or expect increasing income.
Cons: Higher premiums after the initial years, and potentially higher overall costs, called cumulative premium outlay, the longer you live, after a certain break even point.
I ran a cost analysis for someone age 60 for $100,000 coverage. The merits of a low premiums now, higher premiums later approach will depend on an individual’s situation: income, age, health and lifespan projections. It’s not for everyone but certainly innovative. And ModLife UL does offer lifetime protection like other guaranteed no lapse ULs: pay your premiums on time and coverage is guaranteed for life.