Also known as modified premium whole life, a modified whole life policy comes with low introductory premiums. The premium goes up only once after the introductory period and remains the same the rest of the time the Policy is in force. Buying a modified premium policy is a way to obtain a higher death benefit sooner, before you'd typically be able to afford the premiums, instead of waiting to buy Coverage or buying more Coverage when you're older.
Premiums: Standard whole-life insurance has the same premiums as your entire Policy. Modified whole-life premiums are only available once.
Are you curious about modified whole-life Insurance?
These common health conditions may qualify you for a whole-life non-modified policy.
Lastly, you may see companies refer to modified life plans as "final expenses life insurance", "funeral coverage", or "burial Insurance".
Answering health questions is necessary if you desire immediate coverage. There are no exceptions.
Compare those costs to term life insurance, where the same 35-year-old male would pay $30.44 per month for a $500,000, 20-year term policy.
First, a modified whole-life contract is almost sure to be available. Life insurance for seniors aged 80 and over is an exception. Modified plans generally are only available to people who are older than 80.
No insurance company can cover every health problem. They must choose where they will compete for specific health conditions.
Just like most things in life, everything has its pros and cons.
Prices cannot increase over time. There is no way to decrease coverage; the Policy cannot be cancelled at any time.
Life insurance companies compete against each other through price and underwriting.
This contrasts with traditional or level insurance policies, which lock in premiums and keep them the same.
The whole-life Policy is simple. Here are the details:
Many modified whole-life policies don't allow you to contribute to your Policy's cash value during the introductory period.
Still paying much more for your coverage than you would for term life insurance
If you need senior funeral insurance, a modified whole-life policy might be your best option, but it may not.
CEO, The Annuity Expert. A Modified Endowment Contract, or MEC, is a life insurance policy modified from the traditional whole life insurance policy. A MEC offers tax-deferred growth and allows you to take out loans against the policy's cash value without penalty.
Modified whole life insurance is permanent life insurance in which premiums increase after a specific period. Usually, the premiums increase after five or ten years but remain constant. Traditional whole-life insurance premiums, in contrast, remain the same throughout the policy's life.