What is Modified Whole Life Insurance?

Modified Whole Life is an insurance policy that has lower premiums during the first years of the policy; however it has all the features of a regular Whole Life policy. It builds cash value and you receive dividends through the premium savings in your cash value account. The cash value funds can be withdrawn at any time for an emergency or a specific purpose. Life insurance cash value is an ideal manner to save for college tuition, a down payment on a new house, or any planned project for the future. The modified whole life policy is a notch better than Term Life in the sense that it will let you have the low term rates at first, and it has all of the advantages of a whole life policy from the start.

With this type of policy, you have the ability to make decisions regarding the cash value; you have the freedom to use them to pay for the mortgage or anything else you decide is an emergency. You also determine how dividends will be dealt with once they are declared by the company. You can also borrow against the cash value without getting hit by taxes, and when you grow older, you can use the reimbursement as retirement income.

Modified Whole life can be customized with several types of coverage’s. Some of the coverage’s which you can add to your policy include; accidental death coverage (provides death benefits in case you did not survive an accident), children’s coverage, disability coverage and living benefit.

Each of these features will slightly run up the cost, however they are worth considering and after some thought; you may find that they can be a huge advantage. Since you are benefiting from lower premiums at the beginning this will ease the pain of a little higher premium.

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