What is Adjustable Life Insurance?
Adjustable life
insurance is an insurance policy that allows the policyholder to pay flexible premiums
into an account value. The policy may have specified limits that will vary the timing
of the payments and the amount of the premium. The account value will earn
interest at a particular rate, which is usually declared on an annual basis by
the insurance company. This rate cannot go any lower than a certain minimum. The
company will deduct mortality expenses and charges, which will determine the
account value. If you decide to cash in your adjustable life insurance policy,
you will then receive your account value, minus the surrender charges. You are
even allowed to borrow against the account value, but once again, less the
surrender charges. If the insured were to die, a portion of the death benefit
will be paid by the account value.
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