Adjustable Life Insurance: What Is It? How Does It Work?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What is an Adjustable Life Insurance Policy?

Overview

An adjustable life insurance policy is flexible and allows policyholders to alter major aspects like the premium, death benefit, and coverage period. This flexibility suits individuals whose life circumstances and financial needs might change over time.

Key Features

  1. Premium Adjustments: Policyholders can increase or decrease their premium payments within certain limits. This is beneficial if financial circumstances change.
  2. Death Benefit Changes: The policyholder can increase or decrease the death benefit. Increasing the death benefit might require medical underwriting.
  3. Convertible: Some policies allow conversion from term life to whole life insurance without additional underwriting.
  4. Flexible Coverage Period: Adjustable life policies can change from term life to permanent life insurance, providing flexibility in coverage duration.

Examples

  • A young professional might start with a lower death benefit and premium, increasing as their income grows.
  • A parent might decrease the death benefit after their children become financially independent, reducing premiums.
Adjustable Life Insurance

Comparison Table

FeatureAdjustable Life InsuranceTraditional Life Insurance
Premium FlexibilityHighLow
Death Benefit FlexibilityHighLow
Coverage Period FlexibilityHighFixed
What Is Adjustable Life Insurance

Conclusion

Adjustable life insurance policies offer a versatile solution for individuals who anticipate changes in their financial situation or insurance needs. This type of policy adapts to various life stages, making it a practical choice for long-term financial planning. For further details or to see how an adjustable life insurance policy fits into your financial plan, contact us today for a free quote.

Need Help Getting Life Insurance Coverage?

Feel free to contact us if you need help purchasing a life insurance policy. The service is free of charge.

Life Insurance Inquiry
First
Last

Frequently Asked Questions

What is flexible premium adjustable life insurance?

Flexible premium adjustable life insurance is a type of life insurance that allows policyholders to make adjustments to their premiums, death benefits, and other features of their policy. This flexibility can benefit those who want to keep their life insurance coverage in force but must change their budget or coverage needs.

Can I cash in a flexible premium adjustable life insurance policy?

You can typically cash in a flexible premium adjustable life insurance policy. However, the process and the amount you can receive will depend on the specific policy and the insurance company issuing it. For example, some policies may allow you to withdraw some or all of the money you have paid into the policy, while others may only allow you to borrow against the cash value.

What is adjustable comp life insurance?

Adjustable comp life insurance is a permanent life insurance policy that offers flexibility regarding premium payments, death benefits, and the potential to build up cash value.

Which of these needs is satisfied by adjustable life insurance?

Adjustable life insurance can provide death benefit protection and flexibility to policyholders by offering the ability to adjust premium payments and death benefit coverage.

What is an adjustable life insurance policy?

This policy allows the holder to modify the coverage period, face value, and payments. Indeed, it’s aptly named for its customizable features designed to anticipate your changing needs!

What is the most flexible type of life insurance?

Universal or adjustable life policies might be just the solution for you. You can even raise your death benefit after passing an additional medical assessment! In addition, this type of policy allows much more wiggle room than other whole-life plans, granting you greater control over what happens after your passing.

What is the benefit of adjustable life insurance?

Adjustable life insurance is an ideal way to provide you with ultimate control over your policy’s death benefit and premium payments. This type of plan may be best for those who want maximum flexibility in their life insurance coverage.

Is life insurance a good retirement option?

While it isn’t necessary, doing so can provide your loved ones with financial comfort. With the added protection of life insurance, they won’t be burdened by payments towards your final services and debt or any loss in income that may occur when you leave them suddenly during this stage of life.

What are the pros and cons of surrendering a life insurance policy?

If you consider surrendering your life insurance policy, there are several advantages and disadvantages. Plus, if your policy has a cash value higher than the surrender fee, that money is yours to keep. Unfortunately, any applicable charges may eat up all of this money; additionally, you will likely have to pay taxes. Furthermore, without the policy upon death, there would be no death benefit left for your heirs or beneficiaries.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

Scroll to Top