What is Modified Whole Life Insurance?

Posted in Life Insurance

February 5th, 2009

Those interested in modified whole life policies find that they can benefit from lower premiums in the early stages of their policy term. This is very beneficial for those who need a break in price initially but anticipate having more money for higher premiums at a later date.

The purpose of a modified whole life plan is to give individuals such as college students, newlyweds, or interns an opportunity to have life insurance coverage in the event of their death. Usually, the coverage runs from $1,000 to $5,000 and is meant for funeral costs, personal debts, medical bills, final taxes, and maybe even legal fees that the family may be left with.

In addition to being able to pay low initial costs for a modified whole life policy, owners get a chance to take advantage of other benefits:

• The policy accumulates cash value. Many companies offer policies which let their owners borrow against or withdraw funds from them if needed. This is possible because the policies accumulate cash value over time.
• No medical exams needed. Because of the nature of the policy being modified with the probability of limited benefits the first couple of years, many companies dont require the policy owners to undergo any medical exams first. Also, employment history usually wont be required because the company assumes you will have a limited income.

For those who are just getting started in their personal, professional, or academic lives and want to make sure that theyre covered in the event of a tragedy, taking out a modified whole life plan is a good way to go.