What does adjustable life insurance mean?

Adjustable life insurance is a hybrid of term life and whole life insurance that allows policyholders the option to adjust policy features, including the period of protection, face amount, premiums, and length of the premium payment period.

What is a flexible premium adjustable life?

As the name implies, flexible premium, or adjustable life insurance allows the customer to choose higher or lower premiums at numerous points throughout the policy’s life. These plans also come with a flexible cash value component. You can opt for higher premiums and use them to increase the policy’s cash value.

How is adjustable life insurance different from whole life insurance?

Adjustable life insurance is often thought of as a hybrid of term life insurance and whole life insurance. It provides coverage for your entire life, like a whole life insurance plan, but it also has some of the flexibility that term life insurance typically provides.

What happens when you convert term life to whole life?

That’s when converting term life to whole life insurance comes to the rescue. The insurance company takes the premiums you’ve already paid for your term life policy and uses them to discount your whole life policy. This gives you a better whole life insurance rate than you could get otherwise.

Is the interest on adjustable life insurance guaranteed?

As with other permanent life insurance, adjustable life insurance has a savings component that earns cash value interest. Today, most adjustable life insurance cash value accounts have a guaranteed rate of interest.

How is the cash value of adjustable life insurance used?

An adjustable life insurance policy’s cash value can be used as: Surrender value: You can cancel a life insurance policy and give it back to the insurer. In this case, you would “surrender” the death benefit and in return receive the accumulated cash value, which would be subject to a taxable gain.