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Which of the following would result in a premium increase for an adjustable life insurance policy?

A. Decreasing the death benefit
B. Increasing the cash value
C. Decreasing the cash value
D. Increasing the death benefit

User Tialaramex
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1 Answer

3 votes

Final answer:

An increase in the death benefit on an adjustable life insurance policy would result in a premium increase, as it poses a higher risk for the insurer.Hence, the correct answer is option D

Step-by-step explanation:

The option that would result in a premium increase for an adjustable life insurance policy is D. Increasing the death benefit. Adjustable life insurance policies allow policyholders to adjust their death benefit as their insurance needs change. Increasing the death benefit typically requires higher premium payments to maintain the policy because the insurance company is taking on a greater risk of having to pay out a larger sum upon the policyholder's death. In contrast, decreasing the death benefit would usually lead to lower premiums, while changes to the cash value do not directly affect the premiums, although they can alter the policy's performance and the internal cost structure.

User Magus
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