Guardian Life Insurance Company of America 10 Pay Whole Life

In the world of promoting cash value life insurance as an asset class, few companies are championing the cause more concertedly than the Guardian Life Insurance Company of America.  America's 4th largest mutual life insurer, and definite fan of permanent life insurance, has dedicated a bunch of company resources to spreading the word about how life insurance can complement one's portfolio.  The old Germania Life Insurance Company needs to manufacture some powerful cash value products if it wants to truly lead the way in promoting wealth accumulation through life insurance, and few products have a default expectation of achieving superlative cash accumulation than 10 Pay whole life products.

Guardian hasn't had a 10 pay for all that long.  They introduced their product in 2009 to a fair amount of anticipation within the career sales force.  Results have been impressive.  But is the product a worthy candidate for your consideration?

Why 10 Pay?

Guardian LifeFor the less skilled among us, we should probably take a second to explain why anyone would want to give serious consideration to 10 pay whole life in the first place.  There are actually two approaches:

  1. Very high funding over 10 years
  2. Blended policies maximizing 10 pay's high early cash value features

The first aspect is pretty simple and straight forward.  The second requires a little more sophisticated understanding of whole life insurance, and life insurance in general.  We won't dive deeply into this today, but you can always contact us for more information.

Keep in mind that 10 pay offers a guaranteed paid up policy after 10 years, meaning there are no additional payments required to keep the initial death benefit in force forever.  You'd think an insurance company would be looking to charge killer expenses for making that sort of deal available.  But no, cash accumulation in these products is superlative.  And that's the power of compounding earning over time a la time value of money.

Facts and Figures

The products is available in all 50 states, can be issued in face amounts as low as $25,000, and issue ages 0 to 75.  Unlike other products in Guardian's portfolio, the product has no dividend bands. The product is available as a term conversion option for any of Guardian's term life insurance products with a term conversion option.

Riders include:

  • Waiver of Premium
  • Guaranteed Increase Option
  • Accidental Death Benefit
  • Accelerated Death Benefit
  • Ten Year Renewable Term
  • Life Time Paid-up Additions
  • One Year Term

Because I'm finding detailing each rider is taking up a lot of time in these posts, I'm instead going to just note where Guardian has some key advantages among these riders.

Waiver of premium is somewhat unique insofar as it has a five year own-occ definition of disability, which is longer than most–but not all–of Guardian's competitors.

Guardian's Guaranteed increase option is the industries highest total potential increase option among permanent life insurance products (we know of no one with a more generous benefit). The maximum exercise amount per ex. date is $250,000 with an incredible 8 exercise dates meaning the total guaranteed increase is $2,000,000. Not too bad at all. And for the agents who talk juvenile policies for the increase option, here's your chance to talk big guaranteed increase options. Guardian actually has a few different GIO riders, so choose with care.

Guardian's accelerated death benefit is only available on contracts with face amount above $100,000. It is however one of the most comprehensive ADB riders among Guardian's peers. The rider includes coverage for both terminal and chronic illnesses (Guardian was a very early adopter of chronic benefits).

The paid-up additions rider has a 5% load charge that is guaranteed for the lifetime of the contract. Lifetime is a reference to paid-up additions payments beyond the 10 years the owner/insured must pay to contractually pay up the base policy, which is a really nifty feature. Guardian will allow the policy owner to make paid-up addition payments to the contract in years 11+, and this really helps set Guardian apart from most of it's competition when it comes to cash accumulation and retirement income scenarios.

The one year term rider isn't necessarily a rider in Guardian's eyes, it's actually a dividend option (and Guardian has a lot, too many to list in fact since most of them don't matter). This benefit allows policy blending, and Guardian manufactures a strong product for policy blending. They allow a 10:1 term to base whole life blend, and have a very clear cut segmentation regarding what portion of your premium is term insurance and then leave the rest up to the policy owner regarding paid-up additions.

Dividend Recognition

Guardian practices direct recognition and is very proud of it. In fact, Guardian will tell you they pioneered the idea. Guardian's approach to direct recognition definitely puts them in the “doing right” category, but that doesn't mean they categorically have the advantage on this.

Since the release of 10 Pay in 2009 Guardian has done well cash value wise, but not always income projection wise against some key competitors. I suspect that it's for this reason they recently reduced the loan interest rates after the later of age 65 or 20 years of the policy from a fixed 5% to 4%. This helps their product perform better in retirement income scenarios, and is a much needed boost. Whether this moves puts them back on the top of the list remains to be seen.

Flexibility a Key Point

One of Guardian's key strengths is their commitment to flexible whole life contracts. They've done a remarkable job killing the old theory that whole life is the boring and rigid product. With contracts that can nearly rival the flexible attributes of universal life insurance, they certainly fight hard to be a major competitor. And for this reason, Guardian Life deserves at least a once over for your cash value life purchase consideration.


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