Adjustable Life Insurance
Definition of "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
Amount of insurance remaining on a ceding company's books, net of the amount reinsured. ...
Endorsement to the standard fire policy increasing the insurance protection to an all risks basis. ...
Bodily or emotional injury resulting from physical or mental wound or shock. A traumatic injury is caused by something outside the person's body as opposed to a sickness or a disease. An ...
Entitlement of a participant in an employee benefit insurance plan to receive benefits regardless of his or her employment status. ...
Reinsurance marketplace modeled after Lloyd's of London. Like Lloyd's, the New York Insurance Exchange is a market for hard-to-place risks and for the placement of excess or surplus lines. ...
Modest amounts of coverage sold on a debit basis. The face amount is usually less than $1000. ...
Provision in a life insurance policy that death benefits will not be paid in the event an insured dies from war-related causes; or in lieu of a death benefit there is a return of premiums ...
Variation of group life insurance that covers a small group of persons who work for the same employer. With group life insurance, the employer owns the policy; with wholesale insurance, ...
Flat dollar amount that is added to the pure premium for an insured risk that is smaller than that of the lowest experience rating band. This dollar amount serves the purpose of generating ...
Have a question or comment?
We're here to help.