What Is Adjustable Life Insurance? Pros And Cons

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What Is Adjustable Life Insurance

You can change your insurance premium amount too. So, you should know What is adjustable life insurance? This is going to help you with a flexible insurance premium amount to be paid in your insurance policy. Here we will know more about What is adjustable life insurance? As well as what is the meaning of adjustable life insurance? And some Common terms involved in adjustable life insurance with pros of adjustable life insurance as well as cons of adjustable life insurance. And lastly, understand the difference between adjustable life and universal life insurance.

So, let us know What is adjustable life insurance? Where we will first understand what is meaning of adjustable life insurance?

What Is The Meaning Of Adjustable Life Insurance?

The meaning of adjustable life insurance is quite evident from its name as well as it offers flexibility to adjust your life insurance need as it arises according to your preference or choice which is not offered in other types of policies. Here, you can change the premium and the cash value even the death benefits too. And due to this flexible policy, it is commonly known as flexible premium adjustable life insurance or also as adjustable term life insurance. So, What is adjustable life insurance meaning is clear? 

You can also call adjustable life insurance a hybrid policy where the benefit of both i.e. term life and whole life insurance is available for the insurer. It has a cash value component that simultaneously grows out with the insurer’s financial performance but the interest offered by it is minimum. It is a good alternative to opt for whole life insurance as has many flexible options.

What Is Adjustable Life Insurance?

So, Adjustable life insurance is a life insurance policy offering flexible premium options and thus also known as flexible premium adjustable life insurance or also as adjustable term life insurance.

Here, with this policy the insurer can increase or decrease the:

  • Number of years of the policy
  • Face value of the policy or say the death benefit of the policy
  • Monthly premiums of the policy as well as the length of the payment period of the policy

What Is Flexible Premium Adjustable Life Insurance?

The flexible premium adjustable life insurance is another way of referring to Adjustable life insurance where the flexibility of premiums is offered by the insurance company to the insurer.

Common Terms Involved In Adjustable Life Insurance:

Some of the Common terms involved in adjustable life insurance areas:

  • Death benefit

Death benefit involves the amount that is paid to the beneficiary of the insurance policy in case of death.

  • Premiums

Premiums stand for the amount paid to the insurance policy which is flexible in the case of adjustable life insurance.

  • Cash value

The more amount you pay as premiums the more amount goes into the cash value of the policy. You may want to increase or decrease the cash value in an adjustable life insurance policy. As, Cash growth is dependent on Investments at a guaranteed minimum rate, but this Cash growth can increase or decrease too.

What Are The 3 Types Of Life Insurance?

The 3 types of life insurance are as follows:

  • Whole life or permanent life insurance is also known out as traditional whole life insurance
  • Universal life insurance and
  • Variable universal life insurance

Pros And Cons Of Adjustable Life Insurance

Here we will discuss some Pros and cons of Adjustable life insurance. Adjustable life insurance is a good alternative to opt for whole life insurance as has many flexible options.

Pros Of Adjustable Life Insurance

Here we will discuss some Pros of Adjustable life insurance, where we will see that customers can choose the higher or lower amounts of premiums according to their will. Where they will also have an option of a flexible cash value component.

  • Adjustable

Under the Adjustable life insurance, you can choose the amount of premium according to your need which is flexible or adjustable as per your convenience and need.

  • Flexible

Adjustable life insurance has Flexible Premiums or adjustable as per your convenience and need, you can choose the amount of premium according to your need.

  • Cash Value Growth

Cash growth is dependent on Investments at a guaranteed minimum rate, but this Cash growth can increase or decrease too.

Cons Of Adjustable Life Insurance

Here we will discuss some Cons of Adjustable life insurance as because of flexible premiums it involves higher premiums amount as compared to the term life insurance policies. Where withdrawing of funds is also taxable.

  • Additional Guaranteeing

Additional Guaranteeing is required in Adjustable life insurance that in some of the cases also involve giving exam too.

  • Surrender Loss

There is a Surrender Loss involved in the case of Adjustable life insurance within the first 5 or 10 years that invariably results in loss of value.

  • Restricted Guarantee

There is a restricted Guarantee involved as Cash value growth is dependent on the investments and growth of the insurance company. If the company does not grow or earns profit, then your growth is also limited.

What Is The Difference Between Adjustable Life And Universal Life Insurance?

Both adjustable life and universal life insurance are paid upon the death of the insurer although there exists some point of difference between the two. Where flexibility is the main point of difference as Adjustable life insurance has flexible payment and on the other hand, Whole life insurance has a fixed amount of premium involved. So, let us discuss some points of difference between the two as follows:

Basis

Adjustable life insurance

Whole life insurance

Duration

Adjustable life insurance continues for life long or else the time the policy continues. 

Whole life insurance continues for life long or else the time the policy continues.

Death benefit

Death benefit are paid on death which is flexible i.e. it can be increased or decreased during the life of the policyholder.

Death benefit are paid on death which is fixed as paid on the death of the policyholder.

Guaranteed cash value

There is No Guaranteed cash value

Yes, there exists Guaranteed cash value.

Cash growth

Cash growth is dependent on Investments

Cash growth is Fixed in Whole life insurance policy

Premiums

Adjustable life insurance has Flexible Premiums

Whole life insurance has Fixed Premiums

FAQ

What Are The 3 Types Of Life Insurance?

The 3 types of life insurance are as follows:

  • Whole life or permanent life insurance is also known out as traditional whole life insurance
  • Universal life insurance and
  • Variable universal life insurance

What Is The Difference Between Adjustable Life And Universal Life Insurance?

Both adjustable life and universal life insurance are paid upon the death of the insurer although there exists some point of difference between the two. Where, flexibility is the main point of difference as Adjustable life insurance has flexible payment and on the other hand Whole life insurance has a fixed amount of premium involved. So, let us discuss some points of difference between the two as follows:

Basis

Adjustable life insurance

Whole life insurance

Duration

Adjustable life insurance continues for life long or else the time the policy continues. 

Whole life insurance continues for life long or else the time the policy continues.

Death benefit

Death benefit are paid on death which is flexible i.e. it can be increased or decreased during the life of the policyholder.

Death benefit are paid on death which is fixed as paid on the death of the policyholder.

Guaranteed cash value

There is No Guaranteed cash value

Yes, there exists Guaranteed cash value.

Cash growth

Cash growth is dependent on Investments

Cash growth is Fixed in Whole life insurance policy

Premiums

Adjustable life insurance has Flexible Premiums

Whole life insurance has Fixed Premiums

Can You Cash Out An Adjustable Life Insurance Policy?

In the case of here you know what is adjustable life insurance policy, you can surrender the value or say can cancel a life insurance policy and can receive the accumulated cash value in return.

What Does It Mean To Convert Life Insurance?

The meaning of converting life insurance involves converting some part or whole of the life insurance policy into another type of insurance policy such as into whole life insurance policy, etc.

Conclusion

We get to know much about What is adjustable life insurance? As well as what is the meaning of adjustable life insurance? And some Common terms involved in adjustable life insurance with pros of adjustable life insurance as well as cons of adjustable life insurance. And lastly, understand the difference between adjustable life and universal life insurance. As adjustable life insurance is a useful option to be considered in case of other liabilities as well in the life of an insurer. Adjustable life insurance is a life insurance policy offering flexible premium options and thus also known as flexible premium adjustable life insurance or also as adjustable term life insurance. Thus, by now we know What is adjustable life insurance?

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