Modified Whole Life
Insurance Explained

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There are several types of modified whole life insurance policies. Let us take a look at some of them and see how they work.

Whole life insurance covers you for the rest of your life or to age 100, whichever comes first. In some cases these modified whole life insurance policies last until age 90.

Most whole life policies are modified in some way in order to keep premium costs down. These policies begin with some whole life and some term insurance. The life insurance companies replace the term life insurance death benefits in some cases with paid up additions as the years go by.

Another type of modified life policy is the graded premium, or graduated premium, whole life policy. What they do here is to give applicants the full coverage from the word go but at about half the premium.

Each year the premium increases until it levels off. It usually takes about 5 years before the premium levels off. This allows you to have full coverage from the beginning at a lower starting premium. When the premium levels off it usually is a little higher than had you paid the full premium from the policies' starting date.

Limited pay life insurance is another type of modified policy, some people find this quite attractive. This policy allows you to pay premiums for limited periods, 10 years or 15 years for example. At the end of these periods of time you maintain your policy in force without paying any more.

Your policy accumulates cash value and dividends if it is a participating policy. Dividends are not guaranteed.

Another variation is the single premium whole life policy. You just pay once and your policy stays in force for the rest of your life.

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