A modified whole-life insurance policy may be the best choice if you are looking for senior funeral insurance.
The death benefit protection stays the same, but the premiums aren't level.
As mentioned in this section, some policies don't require waiting for the death benefit to become payable.
This contrasts with traditional or level insurance policies, which lock in premiums and keep them the same.
Like all things, there are pros and cons to everything.
If you have diabetes, XYZ company will charge more for you than ABC company.
There are two significant differences between traditional whole-life insurance and modified whole-life insurance:
If you work with what's called a "captive agent", they will only be able to sell you the one company they represent. But what if that company dislikes your health issues?
A "captive agent" is someone who can only sell you one company. What if the company you are working with doesn't like your health?
If diabetes is a problem, your wallet and family will not appreciate XYZ because they'll refuse to treat you or charge you much more than ABC.
The Cash value increases that you can borrow.
The interest granted varies by the company as well. It's important to note the interest granted is based on the premiums you've made, not the death benefit.
These costs are comparable to term life insurance. A $500,000 policy for 20 years would cost $30.44 monthly.
Modified Life Insurance is characterised by changing premiums over time, typically five to ten years after the Policy was issued.
You may still be eligible for lower-cost policies that provide partial or complete coverage within the first two years.
Cash Value: With whole life insurance, your premiums will immediately fund your cash account. But, for most modified policies, you will have to wait until your premiums rise.
The lower rates you receive early in your modified whole-life coverage are not a reduction. After the initial period, higher payments will make up for the difference.
As we mentioned in this section of this article, some policies don't make you wait 2-3 years before the death benefit is payable.
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.