Modified whole life insurance policies are created by actuaries who work
for life insurance companies.
The intent here is two fold. First they create policies that kind of ease you into the whole life experience.
They create policies that give you the full face amount from the word go.
The premiums, however, may start out at a tiny bit more than half what the normal premium would be but it would increase every year for say 5 years.
It would then level off a little higher than the regular premium would be.
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You are getting the same policy as the regular whole life but they ease you into it. You don't pay the full premium to start.
Secondly you get a whole life policy for much less premium. These actuaries are very creative, you would be surprised to see how some of these policies are created. One very large carrier used to market one that goes something like this.
You have a base whole life policy with extra life protection. The
extra life protection is comprised of one year term insurance plus
paid up additions.
hey give you the full coverage from the word go. They can afford to do this because of their track record.
For the past 75 years they never failed to pay a dividend. The
portion of protection purchased by paid up additions come as a result of
the dividend paid.
The law requires that they tell you that the face amount may be reduced if the company fails to pay a dividend. Dividends are not guaranteed. It hasn't happened yet and, in my humble opinion, is not likely to happen.
Those modified whole life policies are still going strong.
The permanent policies that most people buy are modified whole life insurance policies with some similarity tho those described above.
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What is term life insurance? You have an interest in buying term insurance, that is why you are reading this article, and you want to know how it really works.
The raging fires of the debate as to whether term life insurance is superior to permanent life insurance have cooled somewhat even though some so called experts hold fast to their beliefs.
Researching term life insurance online should be a comfortable experience. You want to take your time and absorb all the available information.
Term insurance no medical, no physical, no health questions, no doctors exam seem to be the order of the day for many people.