Adjusting Your Coverage
IF YOU HAVE A TERM POLICY: One of the major drawbacks to Term insurance coverage is that there are very limited options when it comes to adjusting your coverage. One of the only policy adjustment options provided by the insurance carrier in a time of financial need is to reduce your coverage in order to lower your premium payments. However, depending on your situation you may have some financial options outside your policy coverage. For information on these other options, Click Here!

IF YOU HAVE A WHOLE LIFE POLICY: You may be able to reduce or eliminate your premium payments without canceling your policy simply by adjusting your coverage. Typically, the policy owner will have the following options:

• Same Coverage for Less Time – You may be able to use your cash value to make your premium payments and keep your coverage in force. This is usually called an “automatic premium loan”. Generally, interest charges on borrowed amounts are deducted from the policy’s cash value. This option is only valid until the policy’s cash value runs out.
• Similar Coverage For Less Time – You may be able to use your cash value (if any) to purchase Term Insurance with a similar or reduced death benefit for a limited period of time, without having to pay any additional premiums. This is usually called an “Extended Term Option” and duration and amount of coverage will depend on the amount of cash value available.
• Less Coverage for a Longer Time – You may be able to use your policy’s cash value to purchase a new, permanent policy (with a lower death benefit amount) that will not require any more premium payments. The amount of “Paid Up” coverage that you are able to purchase will depend on the amount of cash value available and the insured’s current age. This transaction is usually referred to as a “Reduced Paid Up Option”.

For more information about which options are available to you, we recommend that you contact your insurance agent or insurance provider.