Adjustable life insurance offers lifetime coverage with options to change certain features, including premiums and benefits, as your needs evolve.
Find out if you're overpaying for life insurance below.
Updated: July 16, 2025
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Adjustable life insurance, also called flexible life insurance, has three key modifiable factors: premiums, death benefits and cash value.
An adjustable life insurance policy may be ideal for people needing flexibility due to income fluctuations or family changes.
Before making policy adjustments, contact your insurer and ask about the process. Certain changes, like increasing the death benefit, may require additional underwriting.
Adjustable life insurance is a type of permanent life insurance that allows policyholders to alter premium payments, death benefits and the policy's cash value as their financial circumstances evolve. You can scale your death benefit up or down and tailor premium payments to fit financial shifts, keeping your policy relevant across different life stages.
Adjustable life insurance policies offer several key features that distinguish them from traditional permanent life insurance. These characteristics work together to provide flexible coverage that adapts to your changing financial needs.
You can increase or decrease premium payments depending on your financial circumstances. Increasing your premiums accelerates cash value growth, while reducing premiums eases financial burdens during challenging times without compromising coverage.
You can modify your death benefit throughout the policy's life. For instance, after the birth of a child or increased mortgage responsibilities, you might increase the death benefit to ensure your family's financial security. Conversely, when children become financially independent or debt is paid off, you might lower the death benefit, which can reduce premium costs.
This feature acts as a financial cushion you can access during the policy's term through loans or withdrawals, providing financial flexibility during unforeseen circumstances. Managing this component affects the policy's longevity and effectiveness.
Adjustable life insurance is often another term for universal life insurance, which is known for its flexible premiums and adjustable death benefits. You can use the accrued cash value to pay premiums, helping maintain the policy during financial hardships without out-of-pocket costs.
Like other types of life insurance, adjustable life insurance is a contract between a policyholder and insurer that guarantees a death benefit to designated beneficiaries upon the insured's death. In turn, the policyholder makes premium payments to keep the policy active.
Adjustable life policies stand out through their adaptable features, including flexible premiums and adjustable death benefits. These features accommodate changing personal and financial situations over time.
Your premium payments are divided into three main components: insurance costs (covering the death benefit), policy expenses (administrative fees) and cash value accumulation. The cash value grows over time and helps sustain the policy during periods when premium payments might be reduced or temporarily stopped.
The policy's flexibility comes from your ability to modify these components within certain limits. You can adjust how much goes toward cash value versus insurance costs, change your death benefit amount and vary your premium payments based on your financial capacity.
You have three payment options within the flexible structure:
A portion of your premium payments accumulates in a cash value account that grows over time. This cash value earns interest or investment returns, depending on your policy type. You can access this cash value through loans or withdrawals, providing financial flexibility during your lifetime.
The cash value also serves as a buffer for your policy. If you reduce or skip premium payments, the insurance costs are deducted from your cash value to keep the policy active. This feature helps prevent policy lapse during temporary financial difficulties.
Adjustable life insurance offers significant tax benefits that make it attractive for long-term financial planning. Understanding these can help you maximize your policy's value while staying compliant with federal regulations.
Consider consulting a tax professional about your specific situation, as tax rules can be complex and change over time.
Adjusting an adjustable life insurance policy allows you to adapt your coverage as your financial circumstances change.
To make adjustments, you usually need to contact your insurance provider to discuss the changes you wish to make. Whether you're increasing the death benefit due to family growth, reducing premiums due to a changed financial situation or adjusting the cash value component for better investment returns, your insurer can guide you through the process.
Some changes may require additional underwriting, particularly if they involve increasing the death benefit.
Requirement | Description |
|---|---|
Timing Restrictions and Limitations | Most insurers allow adjustments annually or semi-annually, though some changes may be permitted more frequently. Death benefit increases typically require medical underwriting, which can take two to four weeks to complete. Premium adjustments usually take effect within 30 days of approval. |
Documentation Requirements | Increasing death benefits often requires updated medical information, financial statements, and possibly a new medical exam. Premium reductions typically require minimal paperwork, while cash value allocation changes may need investment election forms. |
Minimum Premium Requirements | Each policy has minimum premium requirements to cover insurance costs and keep the policy active. Falling below these minimums can cause policy lapse. Your insurer will provide specific minimum payment amounts based on your age, death benefit and policy performance. |
Regular reviews of your financial goals and insurance needs help ensure your policy stays aligned with your life's trajectory. Such management helps maintain the effectiveness of your coverage and ensures uninterrupted financial security.
Adjustable life policies come in various structures that cater to different investment preferences and financial goals. Examples include flexible premium indexed adjustable life insurance, where the cash value is linked to a financial index, or a flexible premium multifunded life option, which allows you to allocate premiums to different investment accounts within the policy.
You can tailor your life insurance to specific financial strategies and changing personal circumstances. The availability and structure of options depend on the specific insurance products offered by individual insurers.
Compare your options to determine the right policy and provider. Consulting a financial advisor or an insurance expert can also help.
Understanding the advantages and potential drawbacks of adjustable life insurance can help you make informed decisions about life coverage. While these policies offer valuable flexibility, they also require active management and come with specific risks you should understand before purchasing.
Deciding whether an adjustable life policy suits you involves understanding how its features align with your current life situation and financial goals. It also depends on your financial stability, future goals and personal preferences for managing insurance.
Adjustable life insurance works well for some people, but it isn't necessary for others. Consider adjustable life insurance if:
If you expect your income to fluctuate or anticipate life changes that could affect your finances, you can modify your coverage and premiums with an adjustable life policy.
Adjustable life policies often include options like flexible premium indexed adjustable life insurance, which can provide potential investment returns tied to market indices.
If you prefer control over various aspects of your life insurance, such as increasing or decreasing your death benefit or adjusting premiums based on your current financial situation, flexible life insurance might be right for you.
People who need permanent life insurance protection rather than temporary coverage find value in adjustable life policies.
High-income individuals with estate planning needs or business owners requiring flexible coverage amounts benefit from adjustable features.
Adjustable life insurance may not be for you if:
If you find the complexity of managing adjustments within a policy daunting, simpler life insurance options might be better suited to your needs.
The potentially higher initial costs of flexible life insurance might deter you if you have a limited budget or prefer a fixed cost that you can plan around without unexpected changes.
If you prefer a set-it-and-forget-it type of policy where you don't have to make ongoing decisions about premiums and benefits, traditional whole life or term life insurance might be a better choice.
People who need temporary coverage, such as to protect a mortgage or support children until they become independent, may prefer term life insurance.
Those uncomfortable with investment risk or policy management complexity should consider whole life insurance or term life insurance.
Securing adjustable life insurance involves several steps to personalize your coverage based on your financial goals and needs. Here's how to get a policy that offers flexibility and security.
Consider what you expect to require from your life insurance policy. Think about your financial situation, future goals and any dependents who might benefit. Understanding these needs helps determine the coverage amount and the flexibility you require.
Not all insurers offer adjustable life insurance, and terms can vary. Compare different providers to find one that offers the best terms, rates and options for adjustable policies. Research different adjustable life insurance products from multiple insurers, comparing features, fees and investment options.
Request quotes from several insurance companies to compare premiums and policy terms. Getting personalized quotes from at least three insurers is a good start.
A financial advisor or insurance broker can provide insights into how different policies work and help you understand the nuances of adjustable life insurance. They can guide you in choosing a policy that fits your financial plan.
Once you've chosen a provider and a policy, you'll need to apply. The process typically involves completing an application and possibly undergoing a medical exam to assess your risk profile.
Most adjustable life insurance policies require a medical exam and health questionnaire to determine your insurability and premium rates.
Once your policy is active, review it periodically to ensure it continues to meet your needs, especially if your financial situation changes. You can adjust your premiums, death benefits or cash value components as needed.
If adjustable life insurance doesn't suit your needs, other life insurance options might work better for your situation. Here are some alternatives to consider:
Term life insurance offers coverage for a fixed period, typically ranging from 10 to 30 years, making it a cost-effective option for those seeking temporary financial protection. It's straightforward without a cash value component, which keeps premiums lower than permanent life insurance options.
But once the term expires, you'll need to seek new coverage, which could be more expensive, especially as you age.
Whole life insurance provides permanent coverage with fixed premiums and a guaranteed death benefit. It includes a cash value component that grows at a guaranteed rate, offering a savings element that can be borrowed against or withdrawn.
This type of insurance suits people who prefer stable premiums and consistent growth in cash value, but it's generally more expensive than term life insurance.
Variable life insurance also offers lifelong coverage but with a cash value linked to various investment options, such as stocks and bonds. This allows for potential growth in the cash value, depending on market performance, potentially increasing the policy's value.
However, this also comes with a higher risk because poor investment performance can affect the cash value and the death benefit. This type of policy works best if you're knowledgeable about investments and comfortable assuming more risk in your insurance policy.
Final expense insurance covers funeral and burial costs, offering smaller death benefits at affordable premiums. This type of insurance provides coverage amounts ranging from $5,000 to $25,000, which is sufficient to handle end-of-life expenses without burdening family members financially. Final expense policies are often easier to qualify for than traditional life insurance, with simplified underwriting processes that may only require answering basic health questions rather than undergoing a full medical exam.
This policy appeals to older adults who want to ensure their funeral costs are covered without leaving debt for their loved ones. The premiums remain level throughout the policy's life, and coverage is guaranteed as long as payments are made.
Adjustable life insurance, also known as flexible life insurance, allows policyholders to modify premiums, death benefits and cash value to suit their changing financial circumstances and life stages. In this guide, we explored the characteristics of an adjustable life policy, how it works and its pros and cons to help determine whether this type of insurance fits your needs.
Adjustable life insurance benefits those expecting life changes, such as family expansion or financial shifts. You can increase or decrease your death benefit based on current needs, matching your coverage to your life's demands without overpaying.
Ensure you are getting the best rate for your insurance. Compare quotes from the top insurance companies.
We answer frequently asked questions about adjustable life insurance policies to help you determine whether this policy type fits your needs.
Adjustable life insurance is a type of permanent insurance that allows policyholders to adjust premiums, death benefits and the policy's cash value according to their changing financial needs.
If you have a flexible premium adjustable life policy, you can cash it in to access the cash value accumulated within the policy. However, surrender charges might apply, and accessing funds may reduce the policy's death benefit and potential future growth.
If you own an adjustable life insurance policy, you have the authority to request changes to the policy, including updates to premium payments, face value and other policy features. These changes can help adjust the policy to better suit changing financial situations or goals.
A flexible premium adjustable life insurance policy allows you to adjust the amount of your premium payments within a certain range. This flexibility helps accommodate changes in your financial situation, and the policy also accumulates cash value that can be used in various ways.
There is no difference between adjustable life insurance and universal life insurance; adjustable life insurance is another term for universal life insurance. Both offer flexible premiums, an adjustable death benefit and a cash value component that can be managed over time.
The advantage of a flexible premium life insurance policy is the ability to adjust coverage and payments as your financial circumstances change, providing tailored insurance protection throughout your life.
The concept of "flexible term life insurance" isn't commonly available in typical term life insurance policies. Generally, term life insurance offers coverage for a fixed period with set premiums and doesn't include the option to adjust premiums or the coverage amount during the term.
The term "adjustable whole life insurance" doesn't typically refer to a standard policy type in the insurance industry. Traditional whole life insurance generally offers fixed premiums, a fixed death benefit and a cash value component that grows at a guaranteed rate.
Some insurance providers may market more flexible whole life insurance options that allow customization, but these generally don't have the same features as adjustable life insurance.
Adjustable life insurance satisfies several key financial needs: providing lifelong death benefit protection that can be modified as your family grows or shrinks, building cash value that serves as a financial resource during your lifetime, offering flexible premium payments that accommodate changing income levels, and creating a tax-advantaged savings vehicle with tax-deferred growth. It's particularly suitable for those with variable income, growing families or people seeking permanent coverage with investment potential.
Adjustable life insurance policies allow policyholders to modify premium payments, death benefits and cash value allocations after purchase, subject to certain limitations and underwriting requirements. Unlike traditional whole life insurance with fixed terms, adjustable policies provide flexibility to adapt coverage as circumstances change, though this flexibility requires active management and monitoring to prevent policy lapse.
An adjustable life insurance policy is a permanent life insurance product that combines flexible premium payments with adjustable death benefits and a cash value component that can be accessed during the policyholder's lifetime. The policy allows modifications to key features after purchase, making it adaptable to changing financial circumstances, though it requires more active management than traditional permanent life insurance.
Adjustable life insurance provides permanent coverage with the ability to modify policy elements as needed, but requires careful monitoring to ensure adequate funding for long-term sustainability. While the policy offers flexibility in premium payments and death benefits, inadequate funding or poor cash value performance can lead to policy lapse, making ongoing management essential for policy success.
Adjustable life insurance sounds complex because it is. You're essentially buying a policy that can change its death benefit, premium and cash value as your life evolves. That flexibility comes with trade-offs in cost and complexity that vary dramatically between insurers. We designed our research to cut through the marketing language and show you which companies actually deliver on their adjustable life promises.
How We Evaluated Companies
We analyzed 1,488 life insurance quotes from major insurers and scored each company across five categories that matter most when you're choosing adjustable life coverage:
Each company's score incorporates the following:
We used a standard profile to gather quotes and ensure fair comparisons:
We then modified this profile by age, gender, health status and location to capture how adjustable life premiums change across different customer types. This approach revealed pricing patterns that helped us identify which companies offer the best value for various life stages.
Why This Matters for Your Decision
Adjustable life insurance premiums can increase significantly over time, especially if you max out your coverage or your health changes. Our methodology specifically focused on companies with broad national coverage and online quote capabilities because adjustable policies require ongoing management. You need an insurer you can easily contact when life changes require policy adjustments.
We collected quotes for multiple term lengths and coverage amounts, then identified trends in the data to calculate projections beyond our initial sample. This helps you understand not just what you'll pay today, but what adjustments might cost you down the road.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
