Advantages And Disadvantages Of Adjustable Life

Adjustable life is a flexible premium adjustable life insurance that allow insured to increase or decrease depending on the coverage they needs. It has a feature of both universal life insurance and whole life insurance. On the feature of Universal life insurance, Insured can increase or decrease the premium, increase or decrease face amount, lengthen or shorten the guaranteed protection period, and lengthen or shorten the premium payment period by showing an evidence or insurability. The difference between universal life insurance and adjustable life is whether it unbundle or bundle the policy elements. Although universal life insurance determine death benefit with premium amount, morality charges, and expense, adjustable life combine protection component and …show more content…
In addition, insurer charges ten percent penalty if insured withdraw before he or she turns to fifty nigh and six month or become disabled, unless return withdrawal amount within sixty days. Insured can prevent the policy to be modified endowment contract by increase premium payment in first seven years of contract, reduce death benefit first seven years of contract, or increase materials in the death benefit. Adjustable life is considered to be relatively flexible on the amount of premiums and death benefits, however, Universal life insurance also allow better flexibility than that. Universal life insurance provide unrestrictive withdrawal rule, unbundled elements structure, broad benefit options, cash value accumulation, and multiple dividends options. Insureds are required to evaluate pros and cons of adjustable life depending on their needs because it tend to have high premiums and high administrative charges compared to others. Since, insurer take high risk on adjustable life policy, insured also need to be careful about financial stability of the insurance