Definition - What does Adjustment Provision mean?
An adjustment provision is a clause in an insurance contract that allows changes to be made in the future. These changes can include adjusting premium amounts, altering coverage periods, or changing premium payment periods. Adjustment provisions are commonly used in life insurance policies but can also be used in other forms of insurance.
Insuranceopedia explains Adjustment Provision
Adjustment provisions are commonly used in life insurance policies because their coverage often extends for many years or even decades. It allows the policy to be adjusted to accommodate the numerous changes in financial and life circumstances that the policyholder is likely to experience during that time. This provision is appealing to many who seek to obtain life insurance coverage because life insurance tends to be held over a very long time period.