Adjustable Life Insurance
Candlefocus EditorWhen adjustable life insurance is purchased, the policyholder typically receives a death benefit of a stated amount. The death benefit is what the policy’s beneficiaries will be entitled to receive upon the death of the policyholder. This death benefit can be increased or decreased, usually at the policyholder’s discretion. Policyholders also have the option to decrease the death benefit to minimize premiums. Over the life of the policy, this death benefit may be changed to reflect the life event of the policyholder.
Adjustable Life Insurance also has a savings component In the form of a “cash value” account. Policyholders are able to enjoy the benefit of tax-deferred growth of the cash value of their policy. This account may grow through the form of a life insurance policy dividends, investment returns and credited interest. When the policyholder has built up the cash value over time, they may be able to borrow from the cash value during their life. The cash value may also be used to make the policy’s premium payments.
Finally, adjustable life insurance premiums may be adjusted as well. Unlike other life insurance policies, premiums may be increased or decreased based on the policyholder’s situation. The face value of the policy may also be decreased to reduce these premiums as well.
To summarize, adjustable life insurance policies provide policyholders with much needed flexibility. Not only can the death benefit and cash value be changed throughout the course of the policy, the premiums can be adjusted to ensure the policyholder is not overpaying for life insurance coverage that may not be necessary. This flexibility along with the added benefit of a cash value account make adjustable life insurance an attractive option for a variety of individuals.