Best Modified Whole Life Insurance [2024]
Modified whole life insurance is a type of whole life insurance that offers permanent coverage. Modified whole life insurance has premiums that increase after five to 10 years. Over time, you will pay higher life insurance rates with a modified whole life policy than a traditional life insurance policy.
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Chris Abrams
Licensed Insurance Agent
Chris is the founder of Abrams Insurance Solutions and Marcan Insurance, which provide personal financial analysis and planning services for families and small businesses across the U.S. His companies represent nearly 100 of the top-rated insurance companies. Chris has been a licensed life and health insurance agent since 2009 and has active insurance licenses in all 50 U.S. states and D.C. Chr...
Licensed Insurance Agent
UPDATED: Feb 26, 2024
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Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance providers please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Feb 26, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance providers please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Modified whole life insurance has premiums that increase after a five to 10-year period
- Over time, you will pay more for a modified whole life policy than you will for a traditional whole life policy
- How much you pay for life insurance will depend on certain factors like your age and gender
If you are shopping for a life insurance policy, you will encounter a lot of different options for coverage. It may take you some time to decide on the perfect policy for you and your beneficiaries.
One type of policy you may be interested in is a modified whole life insurance policy. Keep reading to learn more about modified whole life insurance policies and see if that’s something you’re interested in.
As you shop around for life insurance, remember to compare rates from multiple companies to be sure you’re getting the best coverage for the best deal.
You can use our free quote tool above to compare modified whole life insurance rates with multiple companies in your area to get started.
What is a modified whole life policy?
A modified life insurance policy is any policy where the premium payment is subject to change. With this type of policy, the premium will typically start lower and then increase after anywhere from five to 10 years.
A modified whole life insurance policy is the most common example of this type of coverage. But there are modified term life insurance policies as well.
With a modified whole life insurance policy, after the initial five to 10-year period when you pay lower rates, you can expect your new rates to be higher than those related to a traditional life insurance plan.
While modified whole life premiums will increase, this typically only happens once. After an increase in premiums, you will continue to pay the same rate for the rest of your life.
Additionally, the death benefit of a modified whole life policy will remain the same as long as you pay your premiums on time and don’t miss any payments.
In contrast to a modified whole life policy, you may be interested in a traditional or level whole life policy. With this type of policy, the premiums are locked and will never increase for the duration of the policy.
Read more: How to Cancel Your Whole Life Insurance Policy
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How much does modified whole life insurance cost?
Modified whole life premium costs are low at the beginning of the policy but increase significantly after the first two to three years.
For a 35-year-old male in good health buying a $500,000 regular whole life insurance policy, the average rate is $517 per month.
Even though modified whole life insurance may seem like a good policy for people trying to save money, these policies are more expensive to buy in the long run than traditional whole life insurance policies.
If you’re looking for a similar policy that can give you low rates until you can afford higher rates, convertible term life insurance may be a good alternative.
Convertible term life insurance offers low rates and allows you to convert your term life insurance policy to a whole life insurance policy during your coverage period.
Your rates would go up after converting, but they wouldn’t be nearly as high as rates on a modified whole life insurance policy.
What are some of the pros and cons of modified whole life insurance?
Modified whole life insurance isn’t typically a good idea for most people to consider.
Even though the policy has higher-than-average rates after the first two to three years, the lower rates during the beginning of the coverage period generally aren’t worth the cost of the policy.
The only reason you may want to consider a modified whole life insurance policy is if you cannot currently afford a whole life insurance policy but know that you will be able to afford higher rates in the future.
However, this can be risky if you end up not being able to pay the higher rates. You risk losing your coverage.
How is modified whole life insurance different from adjustable life insurance or limited pay life insurance?
Although modified whole life insurance is similar to adjustable life insurance and limited pay life insurance, the policies are not the same and offer different options.
Adjustable life insurance allows you to be able to adjust certain features of the policy including the rates, the cash value, and the death benefit.
With limited pay life insurance, you can prepay your policy’s rates for a set period of time so you won’t have to worry about paying monthly rates in the future.
All three policies allow you to have some form of flexibility with your rates, and it’s important to consider all the options before you commit to a policy.
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Why buy modified whole life insurance if it’s more expensive?
Modified whole life insurance policies are made for people who are not initially able to pay regular whole life insurance rates. This way, you can start a policy with the understanding that in a few years, you will have to pay more for coverage.
Modified whole life insurance policies do carry cash value, though not as much as a traditional whole life policy.
Modified whole life insurance will pay out the full death benefit to your beneficiaries regardless of whether you’re paying the lower initial rate or the higher long-term rate for your policy.
What type of life insurance do I need?
The type of life insurance you need depends on your unique set of circumstances.
If you’re deciding between term or whole life insurance or don’t know how much you want to invest in the cash value or death benefit of a policy, you can look for an adjustable life policy.
With an adjustable life insurance policy, you have the flexibility to change the nature of your policy over time. This could mean changing from a term to a whole life policy or adding new riders to your policy in 12 years.
Adjustable life insurance rates will be more expensive. However, if you want the flexibility of not being locked into a policy, it might be a good option for you.
Additionally, if you don’t want to pay insurance premiums after a certain age, you might want to look for a limited-pay life policy. These policies charge higher premiums for a set number of years. Afterward, you only pay for a set period while keeping the benefits of a whole life insurance policy.
There is also life insurance coverage geared towards end-of-life coverage as well if that is the only plan you want to think about. Some people go their entire life without a life insurance policy, so it depends on the person. This type of life insurance is geared towards helping with funeral costs and other end-of-life expenses.
How much is life insurance?
The amount you will pay for life insurance depends on many factors. These factors include:
- Your age, gender, career, and hobbies
- Your health background and family’s health history
- Whether you use tobacco products
- The type of policy you want
If you’re young and healthy, you can expect lower life insurance rates than someone who is in their late 60s or with several health issues. The table below shows term and whole life insurance rates for a $100,000 policy:
Whole Life Insurance and Term Life Insurance Rates for a $100,000 Policy
| Sex | Age | Whole Life Insurance Rates Per Month | 10-Year Term Life Insurance Rates Per Month |
|---|---|---|---|
| Male | 65 | $359 | $54 |
| Female | 65 | $305 | $37 |
| Male | 75 | $643 | $151 |
| Female | 75 | $572 | $119 |
| Male | 85 | $1,478 | N/A |
| Female | 85 | $1,259 | N/A |
As you can see, these policies get much more expensive as you age. Whole life insurance quotes, especially at an older age, are much higher than term life coverage.
If you are worried about the cost of life insurance, it’s a good idea to shop around and see how much you can expect to pay for coverage. Be sure to compare quotes from several companies to start your research. You can also ask questions as you’re looking. If you’re not sure if a whole life or term policy would be the best fit, you can have an agent, or even an online chat assistance, help you make the choice.
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Should I buy a modified whole life insurance policy?
If money is tight and you’re worried about paying for life insurance, a modified whole life or term life policy may be a good idea. But if you can afford a traditional policy, buy one. It will save you money in the long run.
You should always make sure you know what you need and how you want to protect your loved ones before you make any final decisions. Consider your expenses and investments and choose a life insurance policy with manageable rates and useful coverage.
Case Studies on Modified Whole Life Insurance
Case Study 1: John’s Experience with Modified Whole Life Insurance
John, a 40-year-old individual, decided to purchase a modified whole life insurance policy. In the initial two years of coverage, he enjoyed relatively low rates, which fit well within his budget. However, once the conversion period was over, he experienced a significant increase in premium costs.
This sudden rise in rates made it challenging for John to maintain the policy, and he had to reassess his financial situation and priorities.
Case Study 2: Sarah’s Comparison of Insurance Policies
Sarah, a 30-year-old woman, was considering different life insurance options and came across modified whole life insurance. After researching the policy thoroughly, she found that the lower rates during the initial years did not justify the higher costs in the long run.
Sarah decided to explore other alternatives, such as convertible term life insurance, which offered the flexibility to convert to a whole life policy in the future without the substantial rate increase.
Case Study 3: Mark’s Evaluation of Coverage Needs
Mark, a 45-year-old individual, was seeking a permanent life insurance policy that aligned with his coverage needs. While researching modified whole life insurance, he realized that the policy’s complexity and high-risk nature might not be suitable for him.
Instead, Mark decided to explore adjustable life insurance and limited-pay life insurance as alternative options. These policies provided him with more control over certain features and offered flexibility in adjusting rates and benefits.
The Bottom Line on Modified Whole Life Insurance
Modified whole life insurance typically isn’t worth considering for most people since it is a high-risk policy that doesn’t offer many benefits and is very expensive to maintain.
Modified whole life insurance, adjustable life insurance, and limited pay life insurance are all similar policies that allow you to have some flexibility with payments.
However, if you’re looking for a cheaper and less complicated alternative to modified whole life insurance, convertible term life insurance may be worth considering.
If you want a life insurance policy that suits your budget and coverage needs, talking with an insurance agent and comparing policies can help you find the right coverage at the best price.
Before you buy modified whole life insurance, enter your ZIP code to get free modified whole life quotes from companies near you.
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Frequently Asked Questions
What is a modified whole life policy?
A modified whole life insurance policy is a type of policy where the premium payment is subject to change. The premium starts lower and then increases after a period of five to 10 years. The death benefit remains the same as long as the premiums are paid on time.
How much does modified whole life insurance cost?
Modified whole life insurance has low premium costs at the beginning, but they become much higher after the first two to three years. The long-term cost of modified whole life insurance is generally more expensive than traditional whole life insurance.
Why buy modified whole life insurance if it’s more expensive?
Modified whole life insurance is designed for individuals who cannot initially afford regular whole life insurance rates. It allows them to start a policy at a lower premium with the understanding that the rates will increase after a few years. Despite the higher rates, the policy still provides a full death benefit to beneficiaries.
What are the pros and cons of modified whole life insurance?
Pros of modified whole life insurance include initially lower rates and the potential to afford higher rates in the future. Cons include higher rates after the initial period and the risk of losing coverage if you can’t afford the higher rates.
How is modified whole life insurance different from adjustable life insurance or limited pay life insurance?
Modified whole life insurance, adjustable life insurance, and limited pay life insurance are similar but offer different options. Adjustable life insurance allows adjustments to certain policy features, while limited pay life insurance lets you prepay rates for a set period.
Is modified whole life insurance worth considering?
Modified whole life insurance is generally not recommended for most people due to its high risk, limited benefits, and expensive long-term costs. Convertible term life insurance may be a more affordable and less complicated alternative.
What type of life insurance do I need?
The type of life insurance you need depends on your individual circumstances. If you’re unsure about the amount of coverage or whether you want a term or whole life policy, you may consider an adjustable life insurance policy. This type of policy allows you to change the nature of your coverage over time, such as switching from term to whole life or adding new riders.
How much is life insurance?
The cost of life insurance varies based on several factors, including age, health, and the type of policy. Generally, premiums increase with age. Whole life insurance tends to be more expensive compared to term life insurance. It’s important to shop around and compare quotes from multiple companies to find the best rates for your coverage needs.
Compare Insurance Providers Rates to Save Up to 75%
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Chris Abrams
Licensed Insurance Agent
Chris is the founder of Abrams Insurance Solutions and Marcan Insurance, which provide personal financial analysis and planning services for families and small businesses across the U.S. His companies represent nearly 100 of the top-rated insurance companies. Chris has been a licensed life and health insurance agent since 2009 and has active insurance licenses in all 50 U.S. states and D.C. Chr...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.