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
Stipulation that every participant in health care has the right according to law to purchase health insurance from a private insurance entity. The participant's purchase is voluntary and ...
Coverage for less than one year. Insurers generally charge higher rates for short-term policies than for longer term insurance, such as an annual policy, because of the need to recoup ...
Lump sum premium paid in advance instead of the frequency of premium payments stipulated in the insurance policy. This lump sum premium payment will be less than the present value of the ...
Primary responsibility for overseeing the insurance industry that has rested with individual states since 1945, after Congress passed the MCCARRAN-FERGUSON ACT (PUBLIC LAW 15). In addition ...
Federal law requiring that all pension plan trustees and anyone else who handles pension funds must obtain a fidelity bond. This bond covers the plan in the event of embezzlement and theft. ...
Rights of employees who leave an employer with a qualified plan to withdraw their accumulated benefits. With a contributory plan, employees have immediate rights to their own contributions, ...
Table used by the Internal Revenue Service (IRS) in evaluating split dollar life insurance plans as to the extent of the economic benefit that is considered taxable ordinary income to the ...
Coverage for a lender who has accepted property on the floor of a merchant as security for a loan. If the merchandise is damaged or destroyed, the lender is indemnified. The policy is on an ...
Insurance company's liability for incurred but unpaid expenses. ...
Have a question or comment?
We're here to help.