If you are interested in a life insurance policy, but you want more flexibility than the standard coverage that universal or term life insurance policies provide, you may want to consider an adjustable life insurance policy.  An adjustable life insurance policy, also known as flexible premium adjustable life insurance, is a type of insurance policy that allows you to make more changes than your typical life insurance policy.  It combines features from both term and universal health care policies.

Policy Changes

One of the most significant benefits of an adjustable life insurance policy is the ability to increase or decrease the level of policy coverage as your situation changes, similar to a universal life insurance policy.  If you go through a life event such as a promotion or adding a family member, you may determine that it is necessary to increase your policy coverage.  With an adjustable life insurance plan, you have the ability to make the necessary changes. The insurance company may require proof to show that your insurable interest has changed, but it still allows for much more flexibility than a term life insurance policy. The policy also allows for changes such as altering the length of the policy term and changing the type of protection.  There may also be a time requirement on how long before you can make changes to the insurance. If the insurance company does put a required length of time on the policy before you can make a change, it is typically for one year.

When it comes to making changes to your life insurance policy, another big benefit that an adjustable life insurance policy offers is that it does not require you to cancel an existing policy, only to purchase a new insurance policy in order to obtain the coverage that you need. With an adjustable life insurance policy, being able to make changes to the current policy prevent you from having to get a new one.


Cash Value

Unlike a universal health insurance policy, an adjustable life policy includes the option to invest part of the cash value. While the policy is not likely to get the whole percentage of the return if the market is good, these policies can offer much higher returns than a universal health care policy. On the other hand, if the market is performing poorly, there is typically a zero percent return for the insured, so they do not risk losing the money that they paid toward their premium. An adjustable insurance plan offers a low- to no-risk option for your investment. You can withdraw returns whenever you'd like or leave them to mature.


Cons of Adjustable Life Insurance

In addition to not getting the full return on a well-performing investment, there is an additional drawback to adjustable premium life insurance policies.  Unfortunately, there is no guaranteed interest rate because the interest depends on how well the investment does. If the investments fail, you may not lose money, but you will not make any either.  You also face the risk of an increased premium over time, since the policy has allowances for such adjustments.

Adjustable life insurance policies offer the benefit of flexibility that other types of life insurance policies do not, as well as providing similar cash value opportunities to what a universal health insurance policy provides.  If an adjustable life insurance policy sounds like something that might be up your alley, contact your agent to review your portfolio and see if it may be beneficial for you to purchase one. While this type of life insurance may not be a good fit for everyone, it could be a good fit for you.

Has it been a while since you reviewed your life insurance policy? Contact Skyline Risk Management, Inc. at (718) 267-6600 to get free consultation on your life insurance policy!