You buy a hamburger for $5. Then, two bites in, the cook comes over and says "you know what, I just got a call that the price of meat went up. You owe me another dollar for those next few bites." That's basically the gist of the adjustable premium, except with insurance policies instead of food.
An insurance policy where the price can fluctuate over time has what's called an "adjustable premium." In these situations, the contract has stipulations allowing the insurance company to change what the policyholder is paying. There are limits (it's not as bad as the hypothetical hamburger we outlined above). The amount that the premium can change is set out in the initial contract. So it's not totally predatory and random. But it's mean.
The key? Stay healthy.
Related or Semi-related Video
Finance: What is commission?112 Views
finance a la shmoop. what is commission? well it's the greatest motivator for
salespeople in the world. it's the money some people make above and beyond their [ commission explained on a large screen]
salary. a little monetary carrot dangling out in front of a salesperson to you
know encourage them to sell sell sell. alright you're an agent who just sold a
house good for you. you get a 3% Commission. the house went for a million
bucks well you get 30 grand for the privilege or at least your brokerage
does, and then you get some piece of that. ok now you're the stock broker who sold
3 million shares of stock. well good for you
you get four cents a share in Commission 120 grand in the pocket of your
brokerage and you get some piece of that Commission. you're the Hollywood agent[equation]
who just inked Brad pitiful into a movie deal worth 20 million bucks, well good
for you your agency gets a 10% commission or two
million dollars. yeah that's for a Dewey Cheatham and Howe agency best one in
Hollywood. yeah they rep Harvey Weinstein. now for someone who's attempting to sell
a polished version of that Harvey Weinstein story well that's a commission
impossible. [man frowns]
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