Adjustable whole life insurance is a specific type of life insurance policy that combines features of both term and whole life insurance coverage. This kind of insurance policy is also often called flexible premium adjustable life insurance.
With and adjustable whole life insurance policy, should your needs change, you may change characteristics of your policy, such as altering the policy’s protection period, changing the face value amount of the policy or the premium, or changing the premium’s payment period.
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Whole Life Insurance
Whole life insurance itself is a type of permanent life insurance, which means that the premium is set for the duration of the policy, and does not increase over time as is common with some other types of insurance (such as term life insurance). Whole life insurance includes a savings component wherein the company invests certain amounts that you pay over your basic premium on your behalf. This component is on top of the policy’s guaranteed death benefits. One of the possible drawbacks of whole life insurance is that you will not necessarily ever know how much or how the money is invested, where it’s invested, or what the return is.
Adjustable whole life insurance, like whole life insurance, also includes a savings component wherein amounts over your basic premium are invested by the company on your behalf. This component is on top of the policy’s guaranteed death benefits. The cash value of the policy can be quickly released to the beneficiary and are untaxed, which differs greatly from what happens with, say, a savings account. Another great thing about whole life insurance, though, generally offers more options than do traditional life insurance polices. All these great options are included in adjustable whole life insurance.
Term Life Insurance
Term life insurance offers fixed rate coverage over a specified period of time referred to as a term. During this term, the premium and the policy benefits stay the same. After this term is over, the insured stops coverage or buys further coverage with different rates and possibly very different policy conditions altogether. Term life insurance is usually the least expensive option when one is looking to purchase a substantial policy.
Adjustable whole life insurance—or flexible premium adjustable life insurance—is a nice policy type because it is also a type of permanent life insurance that typically covers the insured up to 120 years. You may also be able to purchase riders (or 10- or 20-year term insurances) for various uses. These riders seem very much like upgrade options you may have for a car or computer, upgrading the standard to the deluxe.
You can take term policies out for you, your spouse, or your children and, without ever having to provide medical records or other any other evidence that shows you are insurance, these policies can be converted into permanent plans. This could be very helpful should someone in your family have a drastic change in health and become unable to purchase new insurance policies.
Riders and Options
You can also purchase an accidental death benefit rider that increases the policy’s worth should you die of an accident before the age of 70. This will be in addition to the policy and the cash value of the policy.
Another rider option is one that promises you can buy insurance or additional coverage regardless of how insurable you may actually be, what your age is, or who you want to add to the policy (such as new children). This rider is called the Guaranteed Insurability Option Rider.
There will be limits to how much interest your account can accrue and minimum policy face values you can purchase (these minimums change depending on how old the insured is). If you surrender the policy, or cash it in, within a certain amount of years, you will be required to pay a surrender fee. These fees often decrease accordingly over those months.
Adjustable whole life insurance polices are ideal for those who are thinking about how their coverage needs may change as their incomes and family sizes change over a period of years. It provides the security and flexibility of a permanent plan while also allowing for the purchase of several term policies.
Adjustable Whole Life Insurance Rates
Sit down with your insurance provider to become familiar with all the types of insurance that are available to you. Or do your own research on your options so you know what kinds of questions you ought to ask about potential policies. Each agency might offer different conditions with their policies, so you might also want to research individual agencies, and consult online insurance quote tools like the one on this page. Enter your zip for free quotes now!