Whole life insurance is intended to provide death benefit protection for an individual’s entire life. With payment of the required guaranteed fixed premiums, you will receive a guaranteed death benefit and guaranteed cash values inside the policy. All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values.
Some whole life policies don’t have any cash values in years one or two. Whole life insurance should be considered for its long term value. Early cash value accumulation and early payment of dividends depend upon policy type and/or policy design, and cash value accumulation is offset by insurance and company expenses. Consult with your Guardian professional and refer to your whole life insurance illustration for more information about your particular life insurance policy.
Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.
Riders may incur an additional cost or premium. Rider benefits may not be available in all states.
Universal Life Insurance may lapse prematurely due to inadequate funding (low or no premium), increase in cost of insurance rates as the insured grows older, and a low interest crediting rate. This does not apply to universal life policies which have a secondary guarantee, but if the secondary guarantee requirements are not met the policy will most likely lapse.
American Council of Life Insurers, Life Insurance Fact Book, 2022, pg. 90
Financial information concerning Guardian as of December 31, 2021, on a statutory basis: Admitted Assets = $72.1 Billion; Liabilities = $63.5 Billion (including $51.8 Billion of Reserves); and Surplus = $8.6 Billion
Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.