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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Speak with a Licensed Agent:
Life insurance with no exam required is a blessing in many ways. The large, and even some of the small, life insurance companies are willing to issue no exam life insurance.
Compare term life insurance quote. If you are in the market for life insurance it would be prudent to take the time to compare term life insurance quotes offered by different companies.
Don't you think it is about time that insurance marketers come straight with the buying public and stop using these fancy terms like no load life insurance to market their product?