What Is Modified Life Insurance? Advantages and Disadvantages

Helen Skeates
Helen Skeates
16 min read

It’s good that you ask what is modified life insurance. Well, this is a standard life insurance policy in which premiums are adjusted so that the first three up to five years, the premium payments would be lower.

What Characterizes A Modified Life Insurance?

Your question on modified life insurance is a welcome one. Well, this is a typical life insurance policy in which premiums are adjusted so that the first three up to five years, the premium payments would be cheaper.

Though payments are no longer uniform, the death benefit remains the same. Therefore, once the premium has increased already, it will be consistent throughout the remaining terms of the policy.

What is Modified Life Insurance and Should you Buy it?

Whole Life VS. Term Insurance Policies

The only difference between this and more conventional policies is the timing of your premium installments. Since it is accruing monetary value, the policyholder can use it as collateral for a loan. When calculating your withdrawal, subtract the surrender fee from the cash value to get your maximum withdrawal.

3 Advantages Of Modified Whole Life Insurance

With its many benefits, modified whole life insurance is a popular choice. In the following sections, we’ll examine these points further.

#1. Lower premiums at the start

Modified life insurance is attractive because of the reduced initial premium payments. This is a good option for folks who won’t qualify for better coverage and who anticipate a bigger salary later in life. Find out more about the basics of life insurance premiums.

#2. Permanent coverage

Unlike term life insurance, which typically only covers you for a set length of time (usually 30, 20, or 10 years), the death benefits provided by a modified whole life insurance policy do not expire as long as you continue to pay the premiums.

#3. The same face value

The policy’s face value will remain unchanged over time, even if the premiums are originally priced low. The death benefit provided to your beneficiaries in the event of your death will remain unchanged regardless of how much you pay for insurance.

3 Disadvantages Of Modified Whole Life Insurance

Modified life insurance may appear inexpensive, but it also has certain drawbacks. You should read this carefully before making any choices.

#1. Complex

Whole life plans make up the vast majority of modified life insurance policies but might be more complicated than regular life insurance policies. This might involve some sort of fee, in addition to other expenses.

#2. Accumulated cash value will be lower

In comparison to a whole life insurance policy with a level premium payment schedule, the cash value component of a decreasing premium whole life insurance policy will accumulate more slowly.

#3. It gets more expensive in the long run

Although modified whole life insurance policies may have lower initial premiums, they often end up costing more than traditional policies. That’s because after your subsidized premium period ends, you’ll have to start paying full price again.

A whole life insurance policy will often cost more than a term life insurance policy. This holds true even if initial premium payments are lower.

How Much Does Modified Premium Whole Life Insurance Policy Cost?

To begin, the premiums for last expense life insurance range widely depending on the insurer.

To give you an idea of the ballpark figure, we’ve included some sample premiums for modified whole life insurance below.

However, the following should be considered when analyzing these rates.

  • You could perhaps qualify for significantly reduced rates (and coverage with no waiting period). Read on for further details on that topic.
  • These monetary allocations are not caps. It’s up to you how much protection you want.
  • The prices above are guaranteed to be accepted. You are certain, at the very least, to be able to get this coverage at these prices.
  • Assumed premiums would remain constant at all times. Your initial pricing will be your final rate.





Whole Life Modified Insurance Might Be Your Best Option, But For Most People It Isn’t

To begin, you should expect to be able to obtain a modified whole life contract. Those over the age of 80 are a special case when it comes to life insurance. Individuals aged 80 and under are typically the only ones eligible for a modified plan.

Feel free to celebrate the fact that a modified plan is available to you regardless of your current health status.

However, you may be eligible for more affordable insurance that provide full or partial coverage for the first two years.

The following is a list of typical health problems for which you may still be eligible for a whole life insurance policy without any modifications.

Let’s start with some definitions to make sure we’re on the same page.

Any of the following possibilities exists if no changes are made to a plan:

  • In the event of the insured’s death within the first two days after the policy was written, the whole death benefit would be paid out. Insurers frequently use terms like “level,” “recommended,” and “standard” to denote this coverage.
  • In the first two years, just a fraction of the death benefit will be paid out under a plan with partial coverage. Typically, between 30 and 40 percent of the benefit is paid out in the first 12 months, with the remaining 70 to 80 percent paid out between months 13 and 24. Carriers frequently use the term “graded” when referring to this kind of plan.

Please be aware that the following criteria will determine whether you are eligible for either the partial or full coverage plans:

  • Age
  • Place of abode
  • Condition of health as a whole

However, please contact us at 1-800-644-2926 if you experience any of the problems detailed below. In order to determine whether or not you qualify for instant coverage, one of our agents will have a brief interview with you (and will likely costs less).

When Life Insurance is More than JUST Life Insurance — Zavitz Insurance & Wealth

Remember this…

Over 90% of Choice Mutual’s customers are eligible for a plan that provides either full or partial coverage for at least the first two years.

Do not automatically assume that you need a special plan because you have these conditions. It’s likely that you can improve upon this. Contact us, we’re pleasant and not pushy at all.

  • Blood Pressure Issues
  • Diverticulitis
  • Problems With Cholesterol
  • The Pain of Angina in the Chest
  • Diabetic Retinopathy, Type 2
  • Methods of Using Insulin
  • Disorders in nerve function caused by diabetes
  • Insulin-Deficient Type 1 Diabetes Mellitus
  • Nephropathy due to diabetes
  • Retinopathy due to Diabetes
  • Over a Year Ago Heart Attacks
  • Consecutive Major Strokes Occurred More Than a Year Ago
  • Cancer Occurred More Than Two Years Ago
  • Prostate Cancer > 1 Year 2 Years (partial coverage only)
  • Infrequent Major Strokes
  • Drugs that thin the blood
  • Disability
  • Clots in Blood
  • Tablets for Rehydrating the Body
  • Rheumatoid Arthritis (All Kinds)
  • Asthma
  • Illness caused by Crohn’s
  • Fibrillation of the Atrium
  • Graves’ Illness
  • The Bipolar Spectrum
  • Schizophrenia
  • Depression
  • Medication for Anxiety
  • Scleroderma
  • Disease of the Kidneys, Chronic
  • Blindness
  • COPD, emphysema, and chronic bronchitis
  • cirrhosis of the liver
  • Sarcoidosis
  • Possible Hepatitis A, B, or C
  • Heart failure with congestion (partial coverage only)
  • Suffering from Cystic Fibrosis
  • Heart Implantable Defibrillator or Pacemaker
  • Epilepsy
  • Fibromyalgia
  • Nursing Care at Home
  • You Require Assistance with ADLs
  • Disease of the Kidneys, Chronic
  • Lupus sle, or systemic lupus erythematosus
  • Abuse of alcohol or drugs within the past two years (partial coverage only)
  • Condition of Parkinson’s
  • Sclerosis Multiple
  • Disastrous Overweight
  • Convulsion Problems
  • Asleep Apnea
  • Adequately Characterized Tumors

Regardless Of Your Situation, This Is How You Get The Best Price

The single most crucial fact regarding life insurance to grasp is that no single provider can serve the needs of every single customer.

What’s the point, if that’s the case?

The reason for this is that in the life insurance industry, price and underwriting competition exists amongst firms.

As an illustration, suppose ABC Insurance specializes in covering people with diabetes and provides them with exceptionally low premiums. This is how their underwriting system is designed to function.

In the meantime, let’s assume XYZ insurance company has a negative opinion about diabetes. They could refuse service or demand exorbitant fees.

If you have diabetes, you and your loved ones will not be happy with XYZ company since they will either refuse to cover you or charge you significantly more than ABC firm.

The greatest insurance policy for a diabetic would be with the provider that gives the most favorable terms and premiums.

There is no health insurance provider that can meet the needs of everyone who has a medical problem. There are only a few places they can compete without compromising their health.

Because of this, it is imperative that you engage with a broker (also known as an independent agency) who can compare rates from multiple life insurance providers. They’ll pair you up with whoever has the most positive health assessment of the two. It’s the most cost-effective place to purchase comprehensive protection.

Working with a captive agent means that you can only buy from the company that the agent represents. But what if the business does not accept your health condition?

Unfortunately, a captive agent is unable to provide you with options from other insurance companies.

Working with an independent agency that will review 15 or more life insurance companies on your behalf is the only way to truly receive the best coverage at the lowest premium, whether it’s Choice Mutual or another agency.

How To Qualify For A Policy That Has No Waiting Period

As we discussed in this section, there are plans available that do not require a waiting period of two to three years before the death benefit is paid out.

There are two main types of life insurance policies: those that pay out the full death benefit immediately, and those that pay out a portion of the death benefit during the first two years.

The most crucial point is as follows.

You need to meet the requirements to purchase an immediate policy. There will be no exams involved, but some basic health information will be required before you can be accepted.

Keep in mind that even with no medical questions asked, there will still be a two to three year waiting period on any insurance.

Therefore, answering health questions is necessary for quick coverage. That rule is always in effect and never broken.

Is Modified Life Insurance The Right Policy For You?

Typically, younger people are targeted by insurers offering this coverage. They offer a strategy for acquiring permanent coverage at an affordable cost. People who cannot currently afford the premiums of a whole life insurance policy, but who anticipate being in a position to do so in the near future, are the intended beneficiaries of modified life insurance.

Whole life insurance policies are among the most expensive options, so the prospect of paying less up front for lifetime protection may seem enticing.


What does modified whole life insurance mean?

There is often a 2- to 3-year waiting period before death benefits are paid out on a modified whole life insurance policy. The insurance company will only return the premiums paid plus interest if the insured passes away within the waiting period. The monthly premium for a modified plan is higher than that of a comparable non-modified plan, and this is in addition to the mandatory waiting period.

Is modified whole life insurance interest-sensitive?

No, a modified whole life policy is not interest sensitive. It will build up cash value that grows every time you make a payment. In addition, the cash value account earns interest causing it to grow further. You can borrow from the cash value if you need money in a bind.

What is a modified premium whole life policy?

As opposed to traditional whole life policies, modified whole life policies do not take interest rate changes into account. With each payment, the cash value will increase. The cash value account also accumulates interest, allowing it to grow even larger. If you find yourself in a financial bind, you can tap the cash value of your policy.

What Is Modified Life Insurance? 3 Advantages And Disadvantages - Krostrade

What is cash value of modified whole life insurance?

The cash value of your policy will depend on three factors: (A) the amount of coverage you purchase (B) the amount you pay each month (C) the insurance company that issues your policy. A table detailing the policy’s cash value’s growth over time will be included in your policy packet.

How does Colonial Penn modified whole life insurance work?

Colonial Penn offers a $9.95 per unit guaranteed acceptance policy for a modified whole life plan. There is a cap of 8 units per order. Colonial Penn will return 118% of your non-accidental death premiums throughout the first two years. At the end of the initial payout period of two years, you will receive the remaining balance.

It’s A Wrap!

Thank you for reading this entire piece about modified life insurance. Keep in mind that whole life insurance premiums are typically higher than those of more conventional life protection options. This plan is still more expensive than before, even after taking into account the new premium payment plan.

Learn how to repair a water-damaged vehicle to avoid having to borrow money in the event of an accident or when your vehicle needs repairs. All I have to say is, that’s all.

Helen Skeates

Helen Skeates

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.