What does an adjustable life insurance policy allow the policyholder to do?

An adjustable life insurance policy provides flexibility to the policyholder, primarily by allowing them to change the premium amount. This type of policy combines features of both term and whole life insurance, affording the policyholder the ability to adjust premium payments, death benefits, and even the period of coverage, depending on their financial situation and insurance needs.

This flexibility is particularly beneficial for individuals whose financial circumstances may change over time. For instance, during periods of increased income, a policyholder might choose to increase their premium to boost the death benefit or accumulate cash value within the policy. Conversely, they may lower their premium during financial difficulties, ensuring continued coverage without the burden of paying a higher premium.

While the other options present possibilities that may seem relevant, they do not accurately capture the primary function of an adjustable life insurance policy. The ability to increase the death benefit or to lower the face value is contingent upon the policyholder's choice and potential underwriting requirements, but these adjustments are not as inherent to the nature of adjustable life policies as the ability to modify premium payments. Converting to whole life insurance, while sometimes possible under certain conditions, is not a standard feature of adjustable life insurance policies. Therefore, the correct answer highlights the fundamental characteristic of adjustable life insurance, which