Adjustable Rate

A type of life insurance policy that allows the policyholder to vary coverage based on needs. Some of the details that may change with an adjustable-rate plan include variables such as the policy’s face amount, coverage period, and premium.

The advantage of adjustable-rate insurance is that, when a family is young and growing, rates may be reduced to help cover other living expenses. However, once household expenses are reduced, more money can be paid toward the adjustable-rate insurance policy, bringing its value up to date and current.

Depending on the type of life insurance policy purchased, an adjustable-rate plan may provide both a death benefit and cash value accumulation in exchange for premium payments.


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