Glossary

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.

Also called: non-guaranteed values, current assumptions, NGEs

Non-guaranteed elements are any premiums, charges, credits or benefits in a life insurance policy or annuity that the insurer can adjust over time rather than locking in at issue. Common examples are whole life dividends, the current crediting rate on universal life, caps and participation rates on indexed products, and current cost-of-insurance and expense charges. The contract sets the outer limits: a minimum guaranteed interest rate and maximum charges.

Insurers set these elements based on actual and expected experience with investment returns, mortality, persistency and expenses. Say, hypothetically, a universal life policy guarantees cost-of-insurance charges no higher than a maximum table but currently charges 60% of that maximum. If the insurer raises current charges to 80%, it hasn't broken the contract, but cash value will grow more slowly or the policy will need higher premiums. Some states, notably New York, have specific rules on how insurers may change these elements.

The practical consequence: projections in an policy illustration assume current non-guaranteed elements continue unchanged for decades. Compare the guaranteed column and request in-force illustrations periodically. See guaranteed vs non-guaranteed values in a policy illustration and universal life cost-of-insurance increases and what to do.

Last reviewed October 4, 2026

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Related terms

Guaranteed values The cash values, death benefits and premiums a permanent policy promises in writing, which the insurer can't reduce whatever its results. Dividend scale The formula an insurer uses each year to set payouts on participating policies, based on its investment, mortality and expense experience. Crediting rate The interest rate an insurer applies to the cash value of a universal life policy or the balance of a fixed annuity for a given period. Cost of insurance (COI) The monthly charge a universal life policy deducts to pay for its death protection, based on the insured's age, rate class and the amount at risk. 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.

Related guides

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. Cost-of-insurance lawsuits against life insurers: cases and outcomes Why policyholders sue over universal life cost-of-insurance increases, with documented verdicts and settlements and the status of the Lincoln case. Current-assumption universal life and crediting rates Current-assumption universal life credits interest and charges costs at rates the insurer can change. How crediting rates work and what to watch for. 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 life insurers invest your premiums Where life insurers put premium dollars: NAIC year-end 2025 data on bonds, mortgages and private assets, plus what it means for the safety of your policy. 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.

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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.