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You might also see modified whole-life plans referred to by some companies as "final cost life insurance", "funeral insurance", "burial insurance", or "funeral insurance".

Committing in a few decades to higher premiums

Well, too bad you're out of luck because a captive agent cannot offer you another insurance company.

First, you will almost certainly have the option of a modified whole-life contract. Senior citizens over 80 are exempt from this rule. Modified plans can only be obtained by those over 80.

If you are looking for immediate coverage, you will need to answer some health questions. There are no exceptions.

Coach B. and other agencies, you can only get the best coverage for the lowest rate if you work with an independent agency. This agency will review at least 15 life insurance companies on your behalf.

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This is undoubtedly true for modified whole life insurance.

The bad news: These plans come with two serious drawbacks, the premiums and the waiting period. These plans allow applicants who have serious health problems to apply. The insurance company accepts many risks because it takes on a lot. These premiums are often higher than for non-modified policies. They also have a waiting period of up to 2 years before the death benefit is paid.

But, you might be able to get better, cheaper policies that offer partial or complete coverage for the first two-year period.

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The death benefit protection stays the same, but the premiums aren't level.

Modified whole-life insurance has lower premiums for a shorter time (usually between two and three years, but sometimes up to five or ten) and a higher rate for the remaining period. It may seem appealing initially, but the premiums are high, and the policy options are complicated, making it not the best choice for most people.

If you have diabetes, your pocketbook and family won't appreciate XYZ company because they'll deny you or, at minimum, charge you much more than ABC company.

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The good thing about a whole-life modified policy is that people with severe health conditions can obtain new coverage. Modified life plans usually have little or no medical/lifestyle insurance. You can still get new coverage even if your condition is severe. Depending on your current health condition, you may need to modify your whole life.

Last but not least, some companies might refer to modified whole lives plans as "final expense life insurance", "funeral Insurance", or "burial coverage".

Premiums are generally stable for the duration of the Policy after they have increased. Premiums usually rise once.

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Why are we saying that?

A quick recap: There are two types of partial coverage plans. One pays a portion of your death benefit for the first two years, and another pays 100% immediately.

If you have diabetes, XYZ company will charge more for you than ABC company.

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The bad: These plans have two significant drawbacks. They have a waiting period and premiums. These plans are available to applicants with severe health problems. The insurance company is willing to take on many risks. The premiums for modified policies are higher than those of non-modified policies. There is a waiting period of 2 to 3 years before death benefits are paid out.

Coach B. data indicates that a 35-year-old male without complex health issues would be able to pay $517 per month for a $500,000 Whole Life Insurance Policy. You may pay less for the first few years, but for many decades, you'll be paying more.

While the differences may seem small, they can have a tangible impact on your finances. You may not lose out on much cash value growth over two years, but a more extended introductory period can set you back. And you'll be going without a critical policy feature while paying five to 15 times more than it costs to get similar Coverage under a term life policy.

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Frequently Asked Questions



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.