What is Adjustable Whole Life Insurance?
Adjustable life insurance is a type of life insurance that puts together the features of term and whole life coverage. It is also known as “flexible premium adjustable life insurance”.
Generally, a policy’s death benefit and premium are stated at the time that the insurance is initiated. Adjustable whole life insurance, however, is different in this aspect. Since a person’s needs change over time, adjustable life insurance provides policyholders with the option to change the specifications of their insurance. This gives policyholders the provision of manipulating not just the period of protection.
It also allows them to increase or decrease the face amount and to raise or lower the premium amount. In some instances, this policy even lets them change the length of the premium payment period–that means that the policyholder may be able to change the payment terms, for example, from a monthly payment to a quarterly payment. This type of policy also incorporates an interest bearing side fund, or cash value.
Why would you want this kind of policy?
As stated before, a person’s needs change. What if there comes a time when you will want or need a greater death benefit? With adjustable life insurance, you can fix that easily. The company may require you to take an up-to-date medical, but as long as you’re being truthful, there should be no issues. If you need to lower the cost of your insurance to match your also changing financial state, then you can easily decrease the death benefit. Your premium will decrease as well.
Purchasing this kind of policy will give you the flexibility that you will need when the circumstances call for it. For example… you are a married man with no children and you decide to purchase a policy to protect your wife in the event that you pass on. But your family gets bigger–and you decide to adjust your benefits because your initial policy can’t provide for everyone.
Or, you want to purchase a policy that you can afford, even if you can’t afford a lot. Then, you become more financially stable, and you decide you have the funds for more benefits. If you purchased adjustable whole life insurance, you can instantly change the terms of your coverage without much hassle.
Adjustable life insurance policies are the right choice for those who want the protection and cash value benefits of whole life insurance, with the added advantage of flexibility. With the option of modifying payments, coverage and terms, policyholders can manipulate their coverage as their financial stability and responsibilities change through time.
Many insurance companies may offer you adjustable life insurance coverage to go along with your other plans. For you to know which kind of plan is the perfect one for you, consult with your insurer. He or she will tell you the details you need to know on how their adjustable plans work and what kind of flexibility you can have with the various plans. Know the right questions you need to ask. You can also do your own research to discover your varying options.