Adjustable Premium
What Does Adjustable Premium Mean?
An adjustable premium is a premium on an insurance policy that is not fixed but can be changed over the life of the policy. Policyholders may adjust their premiums based on factors such as the performance of investments, changing life circumstances, desired benefits, or other considerations. Adjustable premiums are commonly found in life insurance policies.
Insuranceopedia Explains Adjustable Premium
If an insurance company is required to pay more than expected on a policy with adjustable premiums, the premiums may increase to cover the additional costs. Therefore, adjustable premiums can benefit both insurers and policyholders. In contrast, if a policy does not have adjustable premiums, the premium amounts will remain fixed each month until the policy is canceled or amended. Adjustable premiums are particularly appealing to individuals who anticipate changes in their circumstances.
