Adjustable life insurance is an insurance option that makes it simple for policy holders to change the amount and scope of coverage offered by the policy, while also modifying the monthly premium. Generally, life insurance of this type allows adjustments in premiums, the period of protection, and the face amount associated with the policy. In some instances, the policy may also allow the policyholder to change the payment terms of the premium, such as moving from a monthly payment to a quarterly payment.
It is important to note that most adjustable life insurance policies make it possible to decrease or increase the benefits associated with them. This can be very helpful for someone who is unemployed for an extended period of time and has to watch all expenses. Rather than having to abandon the coverage, the policyholder opts for a lower schedule of benefits and gets a lower premium that is more manageable. At a later date when financial circumstances improve, the policyholder can change the terms of the policy again to restore the previous level of coverage.
While this type does share some characteristics with variable life insurance, the two are not identical. Variable life insurance allows the amount of the death benefit to fluctuate based on the performance of the investments that underwrite the coverage. By contrast, adjustable life insurance does not include a floating death benefit; instead, the amount of the death benefit is fixed according to the terms and conditions of the policy.
In terms of quality, adjustable life provides benefits that are comparable to other forms of life insurance coverage. The plan does provide some flexibility for the policyholder to amend the coverage as his life circumstances change. For example, an adult with an adjustable policy may opt to increase the coverage after marrying or having children. By the same token, an insurance package allows an individual with a low income to purchase coverage now and then incrementally increase the benefits as the annual salary or wages increase over time.
Many insurance companies offer this type of insurance coverage along with other plans. Individuals who may be interested in this type of policy should speak with an insurance agent for more details on how their adjustable plans work and what type of flexibility is available with the plans.