Which statement about an adjustable life policy is TRUE?

An adjustable life policy is designed to provide flexibility in premium payments and coverage amounts. The correct statement regarding this type of policy is that Paul can increase the face amount of his policy upon showing evidence of insurability. This means that if Paul wishes to raise the coverage amount, he must demonstrate that he is still insurable, as the insurance company needs to assess the risk of insuring him at a higher amount.

This feature reflects one of the key benefits of adjustable life insurance, allowing policyholders to modify their coverage as their financial needs and circumstances change over time. As insurance needs may evolve—due to factors like family growth, increased debt, or changes in financial goals—policyholders have the option to adjust their coverage accordingly.

While other statements might touch on aspects of adjustable life policies, they do not accurately represent the product's design or terms. For example, adjustments to premiums or coverage generally do not retroactively affect previous terms or provisions. Additionally, a decrease in premium does not inherently shorten the premium-payment period, nor does the insurance company change premiums solely based on investment earnings without a more comprehensive well-defined assessment and underwriting process in place.