Massachusetts Insurance Laws and Rules Practice Test 2025 – Comprehensive All-in-One Guide to Exam Success!

Adjustable life insurance policies are designed to offer flexibility in several key areas, which makes them distinct from more traditional forms of life insurance.

The ability for policyholders to adjust their premiums is a hallmark of adjustable life policies, allowing for changes based on financial circumstances or needs. Coverage can also be modified, meaning that the policyholder can increase or decrease the death benefit, adjusting their level of protection as life circumstances change.

The accumulation of cash value is another critical feature. Unlike term life insurance, adjustable life policies have a cash value component that can grow over time, providing a savings element that policyholders can use, typically through loans or withdrawals.

The statement that policy loans are not permitted is not true for adjustable life insurance. In fact, policyholders can usually take loans against the cash value of the policy. This flexibility represents one of the significant appeals of adjustable life insurance, allowing individuals to access funds when needed while still maintaining their insurance coverage.