Glossary

Guaranteed values

The cash values, death benefits and premiums a permanent policy promises in writing, which the insurer can't reduce whatever its results.

Also called: guaranteed cash values, nonforfeiture values

Guaranteed values are the figures in a permanent life insurance contract that the insurer is legally bound to honor: the minimum cash surrender value in each policy year, the death benefit, the maximum premium, and the nonforfeiture options available if you stop paying. In whole life, they appear as a table in the policy itself. In universal life, guarantees are calculated using the maximum cost-of-insurance charges and the guaranteed interest rate.

An policy illustration typically shows two sets of columns. The guaranteed columns show what happens if the insurer pays no dividends, credits only the minimum interest and charges the maximum fees. The non-guaranteed columns use current assumptions. Say, hypothetically, a whole life illustration shows $68,000 of cash value at year 20 on a guaranteed basis and $95,000 using the current dividend scale: only the $68,000 is promised.

The common mistake is judging a policy by the non-guaranteed figures alone. On universal life in particular, the guaranteed column may show the policy lapsing many years before the current-assumption column does. Guarantees are also only as strong as the insurer behind them, which is why financial strength matters. See guaranteed vs non-guaranteed values in a policy illustration and how to read a life insurance illustration.

Last reviewed October 4, 2026

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Related terms

Non-guaranteed elements Policy features an insurer can change after issue, such as dividends, credited rates and current cost-of-insurance charges, within contract limits. Cash value The savings component that builds inside whole life, universal life and other permanent policies, which the owner can borrow against or withdraw. Policy illustration A year-by-year projection of a policy's premiums, cash value and death benefit, showing guaranteed figures beside non-guaranteed current assumptions. Reduced paid-up insurance A nonforfeiture option that uses a policy's cash value to buy a smaller, fully paid permanent policy so no more premiums are due. Extended term insurance A nonforfeiture option that uses a lapsed policy's cash surrender value to buy term coverage for the full face amount for as long as the money lasts. Guaranteed interest rate The lowest rate an insurer promises to credit on cash value or annuity funds for the life of the contract, no matter how far market rates fall.

Related guides

Buy term and invest the difference: does it hold up The case for and against buying term life and investing the premium savings instead of whole life: the math, the behavior risk, taxes and who it fits. Universal life cost-of-insurance increases and what to do Why insurers raise universal life cost-of-insurance charges, what the contract allows, what documented lawsuits found, and what to do if you get a notice. Guaranteed universal life: permanent coverage without the cash Guaranteed universal life locks in a death benefit to a set age for a fixed premium, with little or no cash value. How it works, its risks and who it suits. Guaranteed vs non-guaranteed values in a policy illustration What the guaranteed and non-guaranteed columns of a life insurance illustration mean, how they differ, and how to stress-test a projection before you buy. How whole life insurance works Whole life pays a death benefit whenever you die, charges a level premium and builds guaranteed cash value. How the pieces fit and where it falls short. How to request and read an in-force illustration An in-force illustration projects your existing policy forward from today's values. How to ask for one, what to check, and the warning signs.

Related tools

Buy term and invest the difference calculator Compare a whole life premium with a term premium plus an investment account, and see the return the account needs to match the policy's cash value.