Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Dec 17, 2021

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The Lowdown

  • Modified whole life insurance offers low rates for the first 2-3 years of coverage then raises your rates considerably afterward
  • You cannot to contribute to the policy’s cash value during the first few years of coverage
  • Modified whole life insurance isn’t usually worth considering for most people since the policy is high risk and more complicated than most whole life insurance policies

Modified whole life insurance is a type of whole life insurance policy that offers lower-than-average rates for the first few years of coverage then raises the rates after that period is over.

Modified whole life insurance is a complicated policy. There are several things to consider before you buy modified whole life insurance.

What are all of the ins and outs of modified whole life insurance? And how does it differ from an adjustable life policy or a limited pay life policy?

Read our comprehensive guide to get all the information you need on modified whole life insurance.

Are you shopping around for affordable modified whole life insurance? Enter your ZIP code to get free quotes from companies near you that offer modified whole life insurance policies.

What is modified whole life insurance?

Modified whole life insurance offers permanent coverage and lets you pay low rates for the first two to three years of coverage.

With modified whole life insurance, you cannot contribute to the cash value of the policy during the first few years, but you can contribute later.

After the first few years set by your policy pass, your rates will be higher than average for the remainder of your coverage period.

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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 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 thought 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 can lose your coverage.

How is modified whole life insurance different from an 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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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.

  1. https://www.iii.org/article/what-are-different-types-permanent-life-insurance-policies