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
Insurance company that becomes subrogated to the rights of another party. ...
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Same as term Expected Loss: probability of loss upon which a basic premium rate is calculated. ...
Calculations involving the mortality rate of a company's insureds and the rate of return on the company's investments. It is used in calculating the prospective reserve. ...
Date of the initial annuity payment. ...
Same as term Expense Allowance: payment to an insurance agent in addition to commissions. Expense allowances, that differ from company to company, vary with the amount of business agents ...
Choice of one of the following available to a life insurance policy owner (or beneficiary, if entitled to receive a death benefit in a lump sum at the death of an insured): INTEREST OPTION ...
Professional designation earned after the successful completion of three national examinations given by the insurance institute of America (IIA). Covers such areas of expertise as ...
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