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Which situation requires a policyowner to provide proof of insurability in an Adjustable Life policy?

  1. Changing beneficiaries

  2. Reducing the term length

  3. Increase face amount

  4. Changing the premium payment frequency

The correct answer is: Increase face amount

In an Adjustable Life policy, a policyowner is often allowed to make changes to various aspects of the policy, but certain modifications come with additional requirements. When it comes to increasing the face amount of the policy, proof of insurability is typically required. This is because the insurer needs to reassess the risk associated with the policyowner, as an increase in coverage can significantly impact the insurer's potential liability. The necessity for proof of insurability ensures that the insurer has adequate information regarding the policyowner's current health status and any other risk factors that could affect the underwriting decision. In contrast, changing beneficiaries or adjusting payment frequencies does not generally affect the risk assessment and therefore does not require proof of insurability. Similarly, reducing the term length is often considered a less risky adjustment that does not necessitate additional evidence of the insured's health.