What is a Modified Whole life insurance policy?

Here’s the bottome line.

A modified whole life insurance policy will offer permanent coverage for a lower initial premium that will increase after a certain number of years.


What Is Modified Whole Life Insurance?

modified whole life insuranceModified whole life insurance is a policy with a waiting period during the first 2-3 years. The insurance carrier will only refund all your premium payments during the waiting period, plus a reasonable interest rate for all non-accidental death.

Once the waiting period of 2-3 years is up, then the carrier will pay full benefits out for any reason.

Here’s some of the fine print you will need to know about a whole life insurance policy:

  • Prices won’t go up over time
  • Coverage will never decrease
  • The policy won’t expire at any age
  • Builds cash value up so you can borrow on it

 Some companies have a 2-year waiting period for modified premium whole life, and some make you wait three years.

The interest that is granted differs by the company as well. One should note the interest granted will be based on the premiums you’ve made and not the death benefit.

Some insurance companies will pay 8%, and some will go as high as 30%, but the majority of carriers grant an excellent 10% interest on your premiums.

For example, if a carrier gives 10% interest and you have made $1000 in payments, you will get a return of $1100 (if death occurred during the waiting period).

Also, you might see some carriers refer to modified whole life insurance plans as “final expense life insurance, “funeral insurance,” or “burial insurance.”

The bottom line is, all those are insurance marketing terms that mean the same thing. They’re referring to a whole life insurance plan with limited underwriting, so those with some health conditions can still qualify.

A modified plan is just another type of final expense life insurance.

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Modified whole life insurance pros and cons

modified whole life insurance pros and consLike everything else in life, modified whole life insurance has its pros and cons.

The good: A whole life modified plan gives people with severe health issues an opportunity to secure some life insurance coverage. The best part is modified life plans will have very limited or no medical/lifestyle underwriting. This means if you have some illnesses, you can still get life insurance coverage.

Of course, it depends on the nature of the severity of your health issues, but a good modified whole life policy might be the only way for you to acquire a new life insurance policy.

The bad: There are two significant drawbacks to modified benefit whole life plans. One is the waiting period & the other is the premiums. These plans accept applicants who have severe health issues.

For that very reason, the insurance carrier is taking on a lot of risks. That is why the premium cost is much higher than a non-modified policy and has a waiting period of 2-3 years before the death benefit would payout.

How much does a modified premium whole life insurance policy cost?

best modified whole life insurance premiumModified coverage rates will be different at every insurance company. 

That being said, below, you will find some examples of modified whole life insurance rates to offer you good about what it will cost you for a modified whole life plan.

Please keep the items below in mind as you go over these premiums.

  • It may be possible for you to get much lower rates (and no waiting period).
  • It’s possible to have more or less coverage. You aren’t limited to these amounts.
  • These price quotes are guaranteed acceptance. At a very minimum, it’s guaranteed that you could qualify for this coverage at these rates.
  • Premiums shown would never go up. The rates you pay when you start will remain the same.







Is a modified life insurance policy your best option?  For most people it’s not.

modified life insurance policyFirst, you are guaranteed a modified premium whole life contract at a minimum.

So you can rest easy knowing that however bad your health situation, you can get a modified whole life plan. 

Although, you may be able to qualify for a better, less expensive policy that offers a partial or complete payout of coverage during the first two years.

Below are many everyday health issues where you very likely could qualify for a non-modified whole life insurance policy.

Before moving on, let’s discuss some terminology, so we are on the same page.

So, if a plan isn’t modified, it will only be one of these options:

  • Full immediate coverage: This plan will ultimately pay out the full death benefit even if the insured passed away just a few days after the policy issue. Insurance carriers will often use words like “level,” or “standard” when describing these types of plans.
  • Partial coverage: Carriers will usually use the word “graded” when describing this type of plan. These programs usually only pay out a piece of the death benefit if something happens in the first two years. Standard payout usually runs 30-40% of the benefit during months 1-12 and 70-80% during months 13-24.

 Be aware; your ability to qualify for a partial or complete coverage plan will depend on these below factors:

  • Your age
  • Your state of residence
  • Your overall health situation

That being said, if you have any of the issues on this list, call us at 1-800-342-1537. One of our Coach B. agents needs to have a quick chat with you to see if you can get or qualify for a plan that has immediate coverage (and will likely cost less).

Please note…

At Coach B. Insurance over 88% of people that inquire qualify for a full or partial plan during the first two years.

If any of these health issues apply to you, don’t just assume you need a modified plan. You can probably do better. Call Coach B. we are friendly, caring, and always looking to help.

  • High Blood Pressure
  • Diverticulitis
  • Cholesterol Issues
  • Angina Chest Pains
  • Type 2 Diabetes
  • Insulin Usage
  • Diabetic Neuropathy
  • Type 1 Diabetes
  • Diabetic Nephropathy
  • Diabetic Retinopathy
  • Heart Attacks Over 1 Year Ago
  • Full Blown Strokes Over 1 Year Ago
  • Cancer Over 2 Years Ago
  • Cancer >1 Year <2 Years (partial coverage only)
  • Mini Strokes
  • Blood Thinners
  • Disability
  • Blood Clots
  • Water Pills
  • Arthritis (All Kinds)
  • Asthma
  • Crohn’s Disease
  • Atrial Fibrillation
  • Graves Disease
  • Bi-Polar Disorder
  • Schizophrenia
  • Depression
  • Anxiety Medications
  • Scleroderma
  • Chronic Kidney Disease
  • Blindness
  • COPD, Emphysema, & Chronic Bronchitis
  • Liver Cirrhosis
  • Sarcoidosis
  • Hepatitis A, B, Or C
  • Congestive Heart Failure (partial coverage only)
  • Cystic Fibrosis
  • Defibrillator Or Pacemaker
  • Epilepsy
  • Fibromyalgia
  • Home Health Care
  • You Need Help With Actives Of Daily Living
  • Chronic Kidney Disease
  • Systemic Lupus SLE
  • Alcohol/Drug Abuse within 2 years (partial coverage only)
  • Parkinson’s Disease
  • Multiple Sclerosis
  • Morbid Obesity
  • Seizure Issues
  • Sleep Apnea
  • Non-Cancerous Tumors

This is how you get the best modified whole life premium price on a  policy.

One of the most important things that you must understand about life insurance is that all the carriers are different, and no one company can offer the best options for everyone.

You might be wondering why we would say that?

Well, it’s because modified premium life insurance companies compete with other carriers via price and underwriting.

modified whole life best priceFor example, ABC insurance company excels at insuring people with diabetes and offers them lower rates. Their underwriting guidelines are set up to work that way.

Meanwhile, let’s say XYZ insurance company doesn’t want people with diabetes. So they might deny them or charges a much higher premium.

If you have diabetes, your wallet and family won’t do business with XYZ because they’ll turn you down or charge you much more than ABC company.

If you have diabetes, your best plan would be to go with whichever company offers the best rates and coverage. 

No single insurance carrier can cater to every single health issue out there. Instead, they have to pick and choose where they want to compete for different health conditions.

So if you want the best pricing, you must work with an insurance broker (aka an independent agency like Coach B.) who can shop dozens of life insurance carriers. They will match you and your situation with whichever carrier views your health issue most favorably. Folk's that's how you will receive the best insurance coverage for the least amount of money.

If you choose to work with what’s called a “captive agent,” they can only offer you a single company they represent. Bam, what if that particular carrier won’t take your specific health issues?

Yep, too bad so sad you’re out of luck because a captive agent only has one company to offer. 

Be it Coach B. or another agency, the only proper way for you to get life insurance coverage at the lowest rate is by dealing with an independent agency that will review several life insurance companies on your behalf

Qualifying for a modified life insurance policy with no waiting period.

As we mentioned earlier, some policies won’t make you wait 2-3 years before paying the death benefit.

To recap, there are partial coverage plans that payout only a portion during the first two years, and there are also plans that will immediately payout 100% of the policy.

Here’s the most critical point to realize and understand.

If you're looking for immediate coverage, they are something you will have to qualify for. You won't necessarily have to take an exam, but you will have to answer health questions and be approved as a minimum requirement.

Please, remember that any policy from any carrier with no health questions will always be a standard 2-3 year waiting period.

There are no exceptions if you want immediate coverage. You must answer health questions.

Frequently Ask Questions

FaqsBelow are some of the most commonly asked questions and answers about these modified whole-life contracts.

If you have a question, email us at info@coachbinsurance.com

What is the difference between whole life and modified whole life insurance?

Modified whole life insurance and whole basic life are very similar. The difference between the two products lies in how the premium is structured in the contracts. The premium due in a modified premium whole life insurance contract is lower in the first years of the policy.

What does a modified whole-life policy mean?

A modified whole life insurance plan is a policy with 2-3 years of waiting before the death benefits are payable. So, if the insured happens to die during the 2-3 year waiting period, the insurance company would only refund premiums paid plus interest. In addition to the 2-3 year waiting period, modified plans are more expensive per month than non-modified plans.

Can modified whole life insurance be interest-sensitive?

No, a modified whole life insurance policy is not interest-sensitive. It will build up a cash value that grows with every payment. Also, the cash value account will earn interest causing it to grow further. You can borrow from the cash value if you need to.

What has modified premium whole life insurance?

A modified premium whole life policy is a simple one with a waiting period before benefits are payable. Suppose the insured passes during the 2-3 year waiting period; the insurance carrier will pay back premiums plus interest (usually 10%). After the 2-3 year waiting period, full benefits will pay out for any reason.

Who should buy modified whole life insurance?

There’s no reason to buy a modified whole life policy unless you know that you need a lifetime of insurance coverage and are sure you can afford the premium increase in the future.

I see Colonial Penn modified whole life insurance on TV. How does it work?

On TV, Colonial Penn’s guaranteed acceptance policy is a modified whole life plan, and it’s sold by what they call a unit. You can only buy 8 units. In the first two years, Colonial Penn will refund premiums plus 8% of the premiums paid for a non-accidental death. After those two years, it will pay out the total amount.

Meet the team

About Coach B.

After starting his financial career with Phoenix Home Life Insurance Company back in 1992, Scott decided he wanted to provide people with an easier and more enjoyable way to buy life insurance. That was the start of Coach B. Life Insurance, whose mission is to be transparent, honest, and helpful to customers — without ever bugging or pushing them.

In the years since then, he has worked tirelessly to improve the process of shopping for insurance. His goal is to make sure that everyone who comes to Coach B. — whether they end up buying a policy or not — has the best possible experience.

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