Traditional term life insurance offers cheap monthly premium payments when you are young, healthy, and low-risk. However, as you age, your rates on a renewal policy will increase. With modified life insurance, there are several available payment options, which means you may choose to start with low payments that increase over time, or start with higher payments that decrease over time.
These flexible payment options allow you to structure your premiums based on your current and anticipated future income, making modified life insurance similar to universal life insurance.
Benefits For Young Families
Young adults may need higher policy limits on their life insurance coverage to protect their growing families, but their incomes are often limited. Modified whole life insurance allows you to purchase the amount of insurance your family needs at a monthly payment you can afford.
Most young families can expect to see an increase in their income as parents gain experience and advance in their careers so they will be able to afford the higher premiums over the term of the policy. However, policyholders shouldn’t be overly optimistic in relation to their income, and should plan carefully.
Benefits for Maturing Families
Policyholders in their late 40’s and 50’s may need extra coverage to ensure that their children will be able to complete their education in the event of the their premature passing, while simultaneously anticipating a decrease in their income as they near retirement. Older adults can begin by paying higher premiums and have the payments decrease over the term period (in the case of modified whole life insurance, over the course of their entire lifetime). Your dependents will have ample financial protection and you will be able to save and invest more of your money as you approach retirement.
Advantages of Modified Life Insurance
The ability to structure payments to match anticipated fluctuations in income is only one of the advantages of modified life insurance. Policies can be set up to automatically renew at the end of the term, whether it is 5, 10, 20, or 30 years, which means that you will never be without a life insurance policy.
Modified whole life insurance allows you to purchase as much coverage as you need to protect your dependents, while structuring the payments to meet your increasing or decreasing income levels. It provides the financial flexibility that is convenient for any family in any financial situation, while offering the benefits and security of life insurance.
The decision to purchase modified life insurance should be part of your overall financial planning for the future. The amount of the policy will depend on your current and anticipated future financial obligations, and the payment structure should take into account your current and future earning potential. Like all term life insurance policies, modified term life has no cash value, and failure to make monthly premium payments will result in cancellation of the policy.
While finding the best modified life insurance may take some research and planning, comparing life insurance quotes from the best companies is easy, instant, and free. A life insurance quote is available online to any consumer interested in learning more about rates, policy options, and providers.