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
Property coverage for a builder of ships until possession passes to the owners. Protects against pre-launch and post-launch perils. Coverage can be purchased on an all risks basis subject ...
Most generally, twisting in insurance is regarded as an unfair trade policy or practice. Twisting means a life insurance policy holder’s misrepresentation on behalf of an insurance ...
tort against another person's property, designed to detain or dispose of it in a wrongful manner. For example, wrongful selling of another person's automobile without permission would ...
Membership organization of state insurance commissioners. One of its goals is to promote uniformity of state regulation and legislation as it concerns the insurance industry. The NAIC ...
New pension-accounting rule created by the Financial Accounting Standards Board. The objective of this rule is to clarify pension accounting so that investors, employers, and employees will ...
Assets from a will transfer into an established life insurance trust. Through this mechanism, assets that have been probated are transferred into a living trust. ...
Broad type of marine legal liability coverage, hull marine insurance is limited to an insured ship. With the addition of a running down clause, a policy can be extended to cover liability ...
Ownership of tax-free or tax-deferred investments by a child or for a child, given that these investments will not reach maturity before the child attains at least age 14. The objective is ...
Amount paid to an insurer. Determination of the actual cost (not the price paid) of a life insurance policy has been widely discussed for many years in life insurance and consumer circles. ...
Have a question or comment?
We're here to help.