I have never heard of this. Modified Whole Life Insurance is a product not commonly sold, but is a policy that has a level death benefit and usually starts with a lower than expected premium for the issue age and has one point in the policy at which the premium changes, normally an increase. I have seen a policy with a "reverse" option that allowed the insured to pay a higher premium initially and obtain a lower payment at the change point.
However, the policy was written for a 26 year-old male, and the change point was age 65. He chose to pay the lower premium and at age 65 his cost was going to change from $68 per month to about $250 per month. He could have paid $86 per month and had a reduction to $57 at age 65 if his agent had explained that provision to him.
There is no reason for true group life insurance to be written on a true "modified" basis. But a "modified benefit" policy would suggest to me that something happens to the amount of insurance payable -- either increases after a year or two or decreases at a certain age, such as 65.
What you may be talking about, however, is something like the stuff sold by companies that write coverage for older persons on a "guaranteed issue" basis. Those policies usually come with a reduced death benefit in the first 12-36 months of the policy, even though a person is paying the full premium. These policies are not uncommon, but, again, they tend to be individual policies, not group coverage.
What information does the marketing materials provide?.
Posted: Tue Oct 07, 2014 09:48 am Post Subject:
I also never heard about group modified benefit life insurance, if you are taking on Modified Whole Life Insurance then it offers guaranteed death benefits. It also allows more flexibility in premium payments.
Posted: Tue Oct 07, 2014 05:22 pm Post Subject:
if you are taking on Modified Whole Life Insurance then it offers guaranteed death benefits. It also allows more flexibility in premium payments.
Modified Whole Life offers NO FLEXIBILITY in premium payments. A person pays an initial premium for a certain number of years, then the premium goes up, and remains at that higher amount until the contract matures or the insured dies.
How much higher? Well, in one case, the premium for an $86,000 policy written on a 26-year old man was going to increase at age 65 from $68 per month to $252 per month. No flexibility in that at all , , , don't pay the higher premium at age 65, and 39 years' worth of insurance premiums go down the drain in about 6 months.
Posted: Tue Oct 10, 2017 04:50 pm Post Subject: modified benefit whole life
Can a monthly premium change after certain amount of time? Does benefit reduce?
Posted: Tue Sep 30, 2014 02:43 am Post Subject:
I have never heard of this. Modified Whole Life Insurance is a product not commonly sold, but is a policy that has a level death benefit and usually starts with a lower than expected premium for the issue age and has one point in the policy at which the premium changes, normally an increase. I have seen a policy with a "reverse" option that allowed the insured to pay a higher premium initially and obtain a lower payment at the change point.
However, the policy was written for a 26 year-old male, and the change point was age 65. He chose to pay the lower premium and at age 65 his cost was going to change from $68 per month to about $250 per month. He could have paid $86 per month and had a reduction to $57 at age 65 if his agent had explained that provision to him.
There is no reason for true group life insurance to be written on a true "modified" basis. But a "modified benefit" policy would suggest to me that something happens to the amount of insurance payable -- either increases after a year or two or decreases at a certain age, such as 65.
What you may be talking about, however, is something like the stuff sold by companies that write coverage for older persons on a "guaranteed issue" basis. Those policies usually come with a reduced death benefit in the first 12-36 months of the policy, even though a person is paying the full premium. These policies are not uncommon, but, again, they tend to be individual policies, not group coverage.
What information does the marketing materials provide?.
Posted: Tue Oct 07, 2014 09:48 am Post Subject:
I also never heard about group modified benefit life insurance, if you are taking on Modified Whole Life Insurance then it offers guaranteed death benefits. It also allows more flexibility in premium payments.
Posted: Tue Oct 07, 2014 05:22 pm Post Subject:
if you are taking on Modified Whole Life Insurance then it offers guaranteed death benefits. It also allows more flexibility in premium payments.
Modified Whole Life offers NO FLEXIBILITY in premium payments. A person pays an initial premium for a certain number of years, then the premium goes up, and remains at that higher amount until the contract matures or the insured dies.How much higher? Well, in one case, the premium for an $86,000 policy written on a 26-year old man was going to increase at age 65 from $68 per month to $252 per month. No flexibility in that at all , , , don't pay the higher premium at age 65, and 39 years' worth of insurance premiums go down the drain in about 6 months.
Posted: Tue Oct 10, 2017 04:50 pm Post Subject: modified benefit whole life
Can a monthly premium change after certain amount of time? Does benefit reduce?
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