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Adjustable Life

August 23, 2011

Adjustable Life

Definition

Adjustable life insurance is a type of permanent, cash value life insurance that combines features of both whole life and universal life insurance policies. This type of policy provides guarantees of death benefit and cash value, just as you would get with a whole life policy. What makes the adjustable life policy special is that, at specific intervals, the policy allows you to request upward or downward adjustments of the premiums, death benefit (face amount), or cash value, much like in a universal life policy. Increases in the death benefit above a certain amount usually requiremedical proof of insurability.

Prerequisites

  • You have a need for life insurance and want one policy that can meet your changing needs

Key Strengths

  • Provides benefits common to all cash value life insurance
  • Flexible policy options allow you to adapt policy to changes in insurance need
  • Provides guaranteed minimum return on cash value (guarantees are subject to the claims-paying ability of the insurer)

Key Tradeoffs

  • Policy adjustments must be requested in advance, may be allowed only at certain intervals, and could have income tax consequences

Variations from State to State

  • No federal regulatory agency–insurance companies are regulated in each state by the department of insurance (or the local equivalent)
  • State laws govern ability of creditors to access cash values

How Difficult Is It to Implement?

  • Policy application may require physical exam
  • Can be difficult to compare policies from different companies due to flexible options and company variations
  • Tax issues relating to policy loans and surrenders can be complex

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with  FSC Securities and may be reached at www.theretirementgroup.com.

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