Adjustable Life Insurance
The Dictionary of Insurance Terms and Definitions
With typical life insurance, the face amount (and consequently, the premium) becomes fixed at the time the policy is instituted. Adjustable life insurance, however, leaves the face amount in the policyholder's hands to change whenever he or she pleases. A change to the face amount will, of course, alter the premium.
An increase in the policy's face amount may require an up-to-date medical evaluation. The insurer may not be willing to increase coverage unless the insured (that's you, usually) is proved to belong in the same rate class he or she held at the time the policy was initially considered.
A cost-effective alternative to increasing coverage by raising a policy's face value may be merely buying a new policy and thereafter holding more than one policy on a single individual.
On the other hand, an alternative to decreasing cost by decreasing an adjustable life insurance policy's face value may be simply buying a new, lesser policy, then dropping the original policy altogether. This may be a cost-effective alternative, since life insurance rates tend to decline as life expectancies rise, and life expectancies have generally trended upward in recent decades.
Only universal life insurance is adjustable by default. Term life insurance and whole life insurance are not.
