Guaranteed vs non-guaranteed values in a life insurance illustration
Updated 2026-11-10. For licensed agents; not legal or tax advice.
Every universal life illustration shows at least two sets of numbers for the same premium. Clients often look only at the larger one. This guide explains what each column assumes, so you can explain why they differ.
What the guaranteed column assumes
The guaranteed values use the highest cost of insurance and expense charges the contract allows, and the lowest crediting rate the contract guarantees. In an IUL that minimum is the floor on the index accounts or the fixed account's guaranteed rate, often between 0% and 2%. If the guaranteed cash surrender value reaches zero while premiums are still being paid as planned, the illustration shows the policy lapsing at that point under guaranteed assumptions.
What the non-guaranteed column assumes
The non-guaranteed (current or illustrated) values use the carrier's current charges and the illustrated crediting rate, applied every year without variation. Real index credits vary from year to year, and the carrier can change charges within the contract limits, so actual values will be higher or lower.
The midpoint column
For many universal life products, the numeric summary required by the NAIC illustration model regulation also shows a midpoint scale: values using charges and rates halfway between guaranteed and current. That summary shows policy years 5, 10 and 20 and age 70, which makes it a convenient starting point for a client conversation.
How to explain it to a client
Show both columns at the same checkpoints and the same size, and put the guaranteed lapse age, if there is one, next to the planned premium. For example: "With $20,000 a year for 10 years, the guaranteed column keeps the policy in force to age 82; the non-guaranteed column at a 6% illustrated rate keeps it in force past 100." That sentence gives the client both ends of the range without implying either one is a promise.