The Pros and Cons of Flexible Life Insurance Policies

Shawn Plummer

CEO, The Annuity Expert

What is Flexible Life Insurance?

Flexible life insurance is an umbrella term for life insurance policies that offer flexibility in aspects like premium payments, coverage amount, and investment options. These policies cater to individuals seeking customization based on their changing financial situations and life stages.

Types of Flexible Life Insurance

Flexible-Premium Life Insurance

  • Definition: Allows policyholders to adjust premium payments within certain limits.
  • Advantages: This policy is Suitable for those with fluctuating incomes. It allows policyholders to increase premiums during high-earning periods and reduce them during low-earning periods.
  • Example: Universal life insurance.

Flexible Term Life Insurance

  • Definition: Term life insurance with an adjustable coverage period.
  • Advantages: Adaptable to changing life circumstances, like marriage or having children. Policyholders can extend or shorten the term as needed.
  • Example: A 20-year term policy that can be extended to 30 years.

Flexible-Premium Adjustable Life Insurance

  • Definition: Combines flexible premiums with the ability to adjust the death benefit.
  • Advantages: High customization. Policyholders can adjust premiums and coverage, making it ideal for those with evolving financial needs.
  • Example: Variable universal life insurance.

Comparing Flexible Life Insurance Types

FeatureFlexible-Premium AdjustableFlexible TermFlexible Premium Adjustable
Premium AdjustabilityHighNoneHigh
Coverage AdjustabilityLimitedHighHigh
Investment OptionNoNoYes
Suitable for Changing Financial NeedsYesModeratelyYes

Advantages Of Flexible Life Insurance Policies

There are several advantages to flexible insurance coverage.

  • Flexible policies allow you to personalize the coverage to your requirements and demands.
  • Flexible insurance may incorporate a securities component, considered an effective inflation hedge.
  • Premium flexibility means that policy owners can choose to pay what they can when they can. This will allow them to increase the cash value of their policy more quickly if they have the resources to do so. It also means that policy owners can skip payments without losing insurance protection if their financial circumstances require it.
Flexible Life Insurance Policies

Disadvantages Of Flexible Life Insurance Policies

There are also some disadvantages associated with flexible policies.

  • Some flexible policies that include a securities component may not have guaranteed returns. This means that the return you get from your policy may be low or even harmful if it is based on separate securities accounts.
  • Some policy owners need to be required to contribute money regularly to their insurance policy for it to grow properly. Many people do not have this discipline, so they choose flexible premium policies that do not have a regular requirement.
Pros And Cons Of Flexible Life Insurance Policies


Flexible life insurance policies are designed to adapt to your changing life circumstances and financial needs. They offer a range of options in premium payments, coverage amounts, and investment opportunities. Understanding the differences and advantages of each type can help you select the one that best fits your unique situation. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, 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

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