Pros and Cons of Adjustable Life Insurance

Now that you know what adjustable life insurance is, let’s tell you about the pros and cons. We believe this information will help you to decide whether or not this insurance policy is the right one for you and your beneficiary. You can also decide where and how you want to invest your cash value.

Pros

Flexible: Adjustable life insurance gives you the leverage to have greater control over your premium amount, face amount, coverage period, and premium period.

Cash value interest: This insurance policy allows you to earn some interests on your cash value if you put it in the right investment vehicles.

Tax-deferred: Just like whole life insurance, adjustable life insurance ensures that your cash value is immune to taxation until when you want to withdraw it.

Cons

Limited control: Even though you can customize your premium, coverage period and other variables, you can only do that within a specific period agreed by you and your insurer.

Expensive: Most times, the minimum amount of premium annually you will pay may be as five times as the amount you will pay for term life insurance yearly.

Market limitations: Most insurers will limit the amount of interest you can earn on your cash value. For instance, if you gain 20% interest on your cash value, your insurer may decide to give you 8%.