Insurance Machine

Adjustable life insurance is coverage under which the face value, premiums, and plan of insurance can be changed at the discretion of the policy owner without additional policies being issued:

The face value of the life insurance policy can be increased or decreased. The resultant size of the cash value will depend on the amount of face value and premium.

The premiums and length of time they are to be paid can be increased or decreased. Unscheduled premiums can be paid on a lump sum basis. Premiums paid on an adjusted basis can either lengthen or shorten the time the life insurance protection element will be in force, as well as lengthen or shorten the period for making premium payments.

Here is an example: Assume that John, who is 28, buys a $100,000 adjustable term life insurance policy to age 65 with an annual premium of $1,250. As his career prospers, he finds at age 32 that he can double the annual life insurance premium payment to $2,500. This increase may change the original term amount to a fully paid-up life policy at age 65. With time, John might experience economic hardship and have to decrease his annual payment by two thirds. This could result in changing the paid-up-at-65 policy back to a term policy to age 65.