What is a Flexible Premium Life Insurance Policy?Posted by Mills Underwood on February 27th, 2021 When you consider what is a flexible premium life insurance policy, you are really looking at the difference between a traditional variable life insurance policy and an adjustable premium one. There is considerable difference between these two types of policies, and the type that is right for you depends a lot on your own situation. However, when you are looking to buy life insurance, an adjustable policy may be the best option for you. In this article we will take a look at the advantages and disadvantages of these policies. Basically, there are two different kinds of life insurance policies: those that have a fixed premium and those that have an adjustable one. With a flexible premium life insurance policy, the premium can change over time; however, there are some policies that will remain constant until you reach the end of your contract. Because of this, these flexible premium life insurance policies tend to be less expensive than their fixed-rate counterparts. While it is true that with a flexible premium life insurance policy you can adjust the premium to suit your situation, it is also worth noting that there are disadvantages to doing so. First, a flexible premium policy can be very dangerous to your financial health because you could end up paying large amounts even though you are not saving any money. This is because the policy can lose its value if the insurer finds out that you are not keeping up with payments. The other disadvantage associated with flexible premium life insurance policies is that they tend to offer only partial coverage. If you purchase a policy that does not have enough coverage, it is not likely that you will ever suffer a financial loss. If your beneficiaries request extra money because of a medical emergency, you could be forced to pay them out of your own pocket. If you have a large family, then it is also unlikely that you will receive enough money to support everyone in your family in case of an emergency. Thus, while your policy may offer some flexibility, you should know that it cannot give you everything that you need to provide for your family. A better option would be to go in for a fixed premium policy, one that offers comprehensive coverage and a high payout. However, before you make up your mind to buy a flexible premium life insurance policy, you should ask whether it is really a good idea to buy one at all. To understand this you must first understand the basics of life insurance. In most cases, life insurance operates on a "flip side", so in case of an emergency, the policy can be turned over to the beneficiaries. However, driving without insurance az of life insurance is not present in all policies. Hence, while buying a flexible premium life insurance policy, you should see whether you need to turn over the policy or not. Another important thing to keep in mind is that if you are a smoker, then you will most probably have to pay more in return for the premium. This is because regular smokers have a higher risk factor, which means that they are more likely to contract diseases. In such a scenario, a flexible premium life insurance policy makes sense. As a rule of thumb, the higher the amount of premium that you pay, the lower is the risk factor of the beneficiary of the policy. You can easily find out the amount that you will have to pay for a flexible premium life insurance policy by visiting a few sites that offer such policies. Once you understand the basic principle behind flexible premium policies, you will be better placed to decide whether to buy one or not. Of course, you should keep in mind that there are certain things that are not covered under a flexible premium policy. Thus, you should make sure that you do not include such things in your policy. One other very important thing to keep in mind when it comes to a flexible premium life insurance policy is to never ever lie on any of your documents. Most of us are so anxious to save a few bucks that we often try to fudge the truth about our health conditions and so on. If you are not careful, then you will end up paying a lot more for the policy than you would have actually paid for it. This is why you need to make sure that you take your time to read the fine print very carefully. If you are still unclear about what is a flexible premium life insurance policy, then you can always consult an insurance broker who is in the best position to explain all of this to you. You will surely benefit once you understand the basics of these policies.Like it? Share it! |