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
Liability insurance coverage for claims arising from acts that occurred before the beginning of the policy period. Policies written on a claims made basis, such as malpractice liability ...
Rule for accounting for contingencies that has application for the accounting of liabilities under the comprehensive environmental response, compensation, and liability act of 1980 ...
Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old living room sofa will not be replaced at ...
Since a mobile home can literally be both mobile and a house, it obviously requires its own kind of insurance. A mobile home insurance policy is sort of a hybrid between auto insurance and ...
Range of administrative and risk management services that can be purchased by an insured. Increasingly, insurance can be purchased unbundled so that policy-holders may pay for straight ...
Treaty adopted by most major countries to determine adjustment for general average in ocean marine insurance. ...
Classification at death of all pension plans, profit-sharing plans, individual retirement accounts (IRAS), annuities, and installment payments to the extent to which the deceased was ...
Coverage for less than one year in duration. ...
Describing the process of developing the ultimate losses and then adjusting them to the cost levels projected for the period of time to be forecasted. ...
Have a question or comment?
We're here to help.