What is Adjustable Life Insurance?
Adjustable life insurance is an insurance option that makes it simple for policy holders to change the amount and scope of coverage offered by the policy, while also modifying the monthly premium. Generally, life insurance of this type allows adjustments in premiums, the period of protection, and the face amount associated with the policy. In some instances, an adjustable life insurance policy may also allow the policyholder to change the payment terms of the premium, such as moving from a monthly payment to a quarterly payment.
It is important to note that most adjustable life insurance policies make it possible to decrease or increase the benefits associated with the policies. This can be very helpful for someone who is unemployed for an extended period of time and has to watch all expenses. Rather than having to abandon the coverage, the policyholder opts for a lower schedule of benefits and obtains a lower premium that is more manageable. At a later date when financial circumstances improve, the policyholder can change the terms of the policy again to restore the previous level of coverage.
While adjustable life insurance does share some characteristics with variable life insurance, the two are not identical. Variable life insurance allows the amount of the death benefit to fluctuate based on the performance of the investments that underwrite the coverage. By contrast, adjustable life insurance does not include a floating death benefit; instead the amount of the death benefit is fixed according to the terms and conditions of the policy.
In terms of quality, adjustable life insurance provides benefits that are comparable to other forms of life insurance coverage. The adjustable insurance plan does provide some flexibility for the policyholder to amend the coverage as life circumstances change. For example, an adult with an adjustable life insurance policy may opt to increase the coverage after marrying or having children. By the same token, an adjustable life insurance package allows an individual with a low income to purchase coverage now and then incrementally increase the benefits as the annual salary or wages increase over time.
Many insurance companies offer adjustable life insurance coverage along with other plans. In order to determine if this type of life insurance is right for you, speak with your insurance agent for more details on how their adjustable plans work and what type of flexibility you can have with the plans.
Written by Malcolm Tatum
