These terms are simply marketing terms. They refer to a whole life insurance plan with limited underwriting so that people with medical conditions can still get coverage.
Why are we saying that?
If you need senior funeral insurance, a modified whole-life policy might be your best option, but it may not.
You will still be paying more for your coverage.
As with all things in life, there are pros and pitfalls.
Coach B. data suggests that a $ 35-year-old male would pay $517 monthly for a $500,000 policy to insure his whole life. Although you may be able to pay less for the first few decades of a modified life insurance policy, your monthly premiums will increase for years.
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.
Modified life insurance is characterized by premiums that change over time, usually five to 10 years after the Policy begins.
A whole life insurance policy is very straightforward. Here's the fine print you need to know:
Premiums: Standard whole-life insurance has the same premiums as your entire Policy. Modified whole-life premiums are only available once.
You can only sell the company you are working with if you have a captive agent. What if your health is not a priority for the company?
But, you might be able to get better, cheaper policies that offer partial or complete coverage for the first two-year period.
Compare these costs with term life insurance. The same 35-year-old male would pay $30.44 monthly for a $500,000 20-year policy.
The cash value of your whole life insurance is. You can have your cash value account funded immediately by your premiums. However, for most modified whole-life policies, you'll need to wait until the premiums increase.
You can rejoice to know that you have the option of a modified plan, no matter your health situation.
The prices can't rise over time. The Policy can't be cancelled or reduced; it can't expire.
In short, there are two kinds of death benefits: plans that pay a portion and plans that pay 100% right away.
Modified whole life insurance policies are not recommended for most people. Traditional whole life insurance policies are more costly and complicated than you might need. Modified whole life policies are:
Modified whole life insurance offers lower premiums for a short time (usually two to three years but occasionally up to five or 10), followed by a higher rate for the remainder of the policy.
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.