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, primarily for shipyards for ocean marine risks, provided in much the same manner as umbrella liability insurance for nonmarine risks. Coverages may be provided ...
Type of excess of loss reinsurance in which the insurance company (cedent) is reinsured in the event there is a casualty loss resulting in at least two insureds generating losses from the ...
Condition in which an applicant has met an insurance company's standards. Requirements include a loss that is definable; fortuitous; one of a large number of homogeneous exposures; and ...
Premium payment made by the policy owner under a universal life insurance policy, usually on an automatic monthly preauthorized bank draft basis. The amount of the payment is established ...
Assets that are not readily convertible into cash 'without a significant loss of principle, such as an automobile, a house, television set, a radio, etc. ...
Written form which has precisely the same terms as the other property insurance policies covering a particular property. ...
Limited special purposes policy that provides liability and physical damage insurance for owners and operators of trucks while engaged in business. This insurance is often purchased by a ...
High severity loss that does not lend itself to accurate prediction and thus should be transferred by the individual or business to an insurance company. ...
Coverage in health insurance by two or more policies for the same insured loss. In such a circumstance, each policy pays its proportionate share of the loss, or one policy becomes primary ...
Have a question or comment?
We're here to help.