what is level benefit life insurance?

modified endowment life insurance

Most people shouldn't buy a modified whole life insurance policy. Traditional whole life is already more expensive and complex than you probably need. If you buy a modified whole life policy, you're:

No insurance company can cater to every single health issue. They have to choose where they compete for specific health conditions.

A policy that provides the best rates and coverage for a person with diabetes would be your best.

The whole-life Policy is simple. Here are the details:

Some companies offer as low as 10% and others as high as 30%. Most companies, however, grant 10% interest for your premiums.

What's the point?

cancelling a whole life policy

Committing in a few decades to higher premiums

The following are some common issues that you may be able to qualify for a non-modified whole-life policy.

Compare those costs to term life insurance, where the same 35-year-old male would pay $30.44 per month for a $500,000, 20-year term policy.

cancelling a whole life policy
what does life insurance pay for?

what does life insurance pay for?

The loss of cash value savings is one of the most significant benefits of life.

To qualify for immediate coverage, you will need to meet specific criteria. The exam is unnecessary, but you will be asked questions about your health and approved.

Coach B. data shows that a $35-year-old male with no complex health problems would pay $517 per month for a $500,000 life insurance policy. While you might pay less for the first few years of a modified whole-life policy, you will pay more over time.

what is modified benefit whole life insurance?

A modified insurance plan is only a type and final expense insurance.

Life insurance companies compete against each other through price and underwriting.

Modified Life Insurance: An ordinary policy that covers life insurance, but the premiums have been adjusted to lower premiums for the first three to five years. The premiums will increase over time to match a standard policy.

single premium life insurance
single premium life insurance

Cash value: Your premiums begin to fund your cash value account immediately with whole life insurance, but for most modified whole life policies, you will need to wait until your premiums go up.

The bad: There are two significant drawbacks which are the waiting period & the premiums. These plans accept applicants who have severe health issues. For that reason, the insurance company takes on a lot of risks. This is why the premiums are much higher than non-modified policies and have a waiting period of 2-3 years before the death benefit would pay out.

An example: If you receive 10% interest from a company and make $1000 monthly payments, you get $1100 back.

what is level benefit life insurance?
modification clause in life insurance policies

The good news is: People with serious health problems can still get new coverage through a modified whole-life plan. Modified life plans often have minimal or no medical/lifestyle coverage. You can still obtain new coverage even if you suffer from serious illnesses. Modified whole life may be the best way to get new insurance, depending on your medical condition.

These common health conditions may qualify you for a whole-life non-modified policy.

Senior funeral insurance may be a good option. However, it might not.

modification clause in life insurance policies

Frequently Asked Questions


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.