What is adjustable whole life insurance?

UPDATED: Jun 8, 2010

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Asked June 8, 2010

1 Answer

There are a couple of terms that need to be explained in this type of policy. Understanding exactly what an adjustable whole life policy is means knowing what the "whole" part of the name means and how "adjustable" fits into the larger picture. Make sure that a whole life policy is the correct one for you, or take out a term life policy if that will be more applicable to your family's needs.

Whole life insurance is an insurance policy that does not expire, and will stay with a person until they die as long as the premiums are paid. By contrast, a term life policy is a life insurance policy that is only in effect for a limited amount of time, or a specified term. This type of policy is usually much cheaper than whole life, but may expire before the policy is paid, meaning that everything paid into the policy is effectively lost.

The term adjustable refers to the way that your insurance policy can be modified over time. One example for needing an adjustable whole life insurance policy is when a child is born into the family. Overnight, it can become necessary to increase the amount you are able to leave for survivors in the event of your death, and having an adjustable whole life insurance policy is designed so that you can add or delete components or modify coverage amounts as needed. Keep in mind that most increases are going to involve a minimum waiting period before they become effective, and planning ahead can make all the difference in the world to your family.

Answered June 8, 2010 by Anonymous

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