Adjustable Life Insurance
Coverage under which the face value, premiums, and plan of insurance can be changed at the discretion of the policy owner in the following manner, without additional policies being issued:
- face value can be increased or decreased ( to increase coverage, the insured must furnish evidence of insurability). The resultant size of the cash value will depend on the amount of face value and premium.
- premiums and length of time they are to paid can be increased or decreased. Unscheduled premiums can be paid on a lump sum basis. Premiums paid on an adjusted basis can either lengthen or shorten the time the protection element will be in force, as well as lengthen or shorten the period for making premium payments. For example, assume that John, who is 28, buys a $100,000 adjustable term life policy to age 65 with an annual premium of $1250. As his career prospers, he finds at age 32 that he can double the annual premium payment to $2500. This increase may change the original term amount to a fully paid-up life policy at age 65. With time, John might experience economic hardship and have to decrease his annual payment by two thirds. This could result in changing the paid-up-at-65 policy back to a term policy to age 65. Thus, at any time the policy can be either ordinary life or term.
Popular Insurance Terms
Unfunded trust that acts as the owner of a life insurance policy. The trust receives a donor's cash payments on a periodic basis, from which the beneficiary of the trust has a specified ...
Plan to control employer's health care cost through the introduction of practice guidelines or protocols for health care providers, and to improve the methods used by employers and ...
Total amount of insurance on an insurer's books at a particular time. ...
Provision for coverage for buildings and personal property within the simplified commercial lines portfolio policy (sclp). The buildings and personal property coverage may be classified in ...
Same as term Flat Rate: rate not subsequently adjusted. The rate stays in effect regardless of an insured's subsequent loss record. ...
Agreement by the insurance company to keep the universal life insurance policy in force, even if the cash value becomes zero or less than zero, provided that a specified minimum ...
Document used to sign up employees for plans such as salary savings, life insurance, or other employee benefits. ...
Fee paid to an agent as compensation for his or her collecting premiums for debit insurance (home service insurance, industrial insurance). ...
Coverage by at least two insurance policies providing the same coverage for the same risk. ...
Have a question or comment?
We're here to help.