Why might a policyholder's premium increase in an Adjustable Whole Life policy?

In an Adjustable Whole Life policy, a policyholder's premium may increase due to lower than expected investment returns. This type of policy typically incorporates a cash value component that earns interest based on the insurer's investment performance. If the investments do not perform as anticipated, the policy may require more premium contributions to maintain the same death benefit or to ensure that the policy remains in force. This adjustment is essential because the insurer must manage the risk and the financial stability of the policyholder's investment, which directly affects premium calculations.

Factors like changes requested by the policyholder or increases in coverage would not inherently lead to a rise in the basic premium structure unless they affect the coverage amount or the obligations of the insurer. Improved health of the insured typically results in lower premiums in life insurance policies, as it reduces the insurer's risk assessment related to the likelihood of a claim. Thus, it’s the counterintuitive nature of investment performance impacting cost structures that leads to increased premiums in this case.