Modified Whole Life Insurance (Proceed With Caution)

Modified Whole Life
Modified Whole Life Insurance (Proceed With Caution)

When researching senior life insurance, there are many different plan options. Modified whole life insurance is common coverage marketed to the public. However, many do not know if this coverage is the best plan for them.

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What Is Modified Whole Life Insurance?

Offering a more lenient underwriting process, the modified whole life plan allows seniors with previous health concerns to obtain coverage. With this flexible underwriting comes either a two or three-year waiting period. If the insured were to pass away during the waiting period, the beneficiary would receive all premiums paid plus an additional percentage. 

Each funeral insurance company has different plan details and requirements. However, the following is a common payout structure that many insurers implement.

  • Year 1: All paid premiums returned plus 10%
  • Year 2: All paid premiums returned plus 10%
  • Year 3: Full death benefit paid

Modified Whole Life Insurance Basics

Modified whole life plans are useful due to the underwriting leniency that they provide. Seniors with serious medical concerns are typically able to be approved for this type of plan.

Each modified plan comes with permanent whole life benefits and additional features.

  • Rates never increase
  • Coverage never decreases
  • Simplified underwriting (no medical exam)
  • Builds a cash value
  • Low cost
  • Fast payout
  • Death benefit can be used for anything

Modified Whole Life Insurance Premiums

The quotes listed below are taken from Mutual of Omaha’s return of premium plan. This modified product has a two-year waiting period and is priced competitively compared to similar plans on the market. The rates shown are non-smoking quotes.


Monthly Premiums

Age $10,000 $15,000 $20,000
50 $29 $43 $57
55 $36 $53 $71
60 $44 $66 $88
65 $52 $78 $104
70 $68 $102 $135
75 $94 $141 $187
80 $119 $178 $236


Monthly Premiums

$10,000 $15,000 $20,000
50 $40 $59 $79
55 $47 $70 $93
60 $54 $80 $107
65 $65 $97 $128
70 $84 $125 $167
75 $109 $163 $217
80 $143 $214 $285

Other Types Of Whole Life Funeral Insurance Plans

In addition to modified, there are three other main burial insurance plans. While modified might be the right plan for certain situations, there are lower-priced and better-structured plans on the market.

  • Level
  • Graded
  • Guaranteed Issue


The level plan offers burial insurance with no waiting period and has the lowest premiums but will be the most difficult to qualify for. This plan is the only option that provides immediate coverage and will be your best choice if you can be approved. Your health history will be the biggest factor in determining approval.


A graded plan is very similar to modified whole life products. Both options have a waiting period that typically lasts two years. However, the graded premium and payouts are more favorable.

Instead of receiving the return of premium plus interest if the insured passes away, the beneficiary would be awarded a percentage of the entire death benefit. Both Royal Neighbors and Sentinel Security Life offer top-notch graded products with the following payout structure.

  • Year 1: 30% of the coverage amount
  • Year 2: 70% of the coverage amount
  • Year 3: Full coverage amount

Guaranteed Issue

Modified and guaranteed issue plans are nearly the same product. They both typically have a return of premium payout during the waiting period. This means if the insured passes away during the first two or three years of the plan, the beneficiary will receive all premiums paid plus interest, which is typically 10%.

The biggest difference is that modified plans still ask medical questions while guaranteed acceptance plans do not.

In certain circumstances, no medical question plans are cheaper than modified coverage.

Work with an independent agent to find out what plan is right for you.

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FAQs About Modified Benefit Life Insurance

What is the Difference Between Whole Life Insurance and Modified Whole Life Insurance?

Whole life insurance offers permanent financial protection. Modified is a type of whole life insurance that comes with simplified issue underwriting and will approve applicants with past serious medical conditions. Seniors looking for permanent life insurance to cover their final expenses can use a modified plan, though it is most likely not their best option.

What is to be Expected of a Modified Life Policy?

Due to applicants being in compromised health, a two-year waiting period will be required before being eligible for full coverage. The waiting period restriction is in place because of the added risk the insurance company is taking on. The premiums will also be more expensive than a level benefit plan with immediate coverage.

Should I Apply for a Modified Whole Life Plan?

Seniors who are in good health should attempt to secure immediate coverage. This will require the applicant to answer a series of yes and no medical questions. If day one coverage is not possible due to health concerns, speak with an independent agent to find the next best option.

How does Modified Life Insurance Work?

This plan is designed for seniors with medical concerns who may not otherwise qualify for final expense insurance coverage. The underwriting process is streamlined and simple, with lower requirements than an immediate coverage plan. With this flexible underwriting comes a waiting period and higher premiums.

Is Modified The Best Insurance Coverage Option?

Day one coverage is what every senior should attempt to qualify for. If you can secure immediate protection, the monthly premiums will be substantially lower than a plan with a waiting period. Qualifying for this type of burial insurance will require that seniors answer a wide variety of yes or no medical questions.

The best opportunity to qualify for immediate coverage is by working with an independent agent who has access to multiple carriers. Every insurance company has different underwriting standards, so the more companies you have to choose from, the higher likelihood of finding the best plan that fits your needs.

Should I Buy Insurance Through Direct Mail Promotions and TV Commercials?

Many companies will market their products on T.V. commercials or send mail directly to seniors. These offers are usually overpriced modified whole life or guaranteed acceptance plans.

Several carriers sell these products, but popular companies are AARP/New York Life, Lincoln Heritage, and Colonial Penn. If you purchase a plan through these companies, there is a good chance you will overpay for coverage.

Working with a well-respected independent agent specializing in final expense insurance will be your best chance to secure a low-priced plan with immediate coverage.

Why Willamette Life?

Willamette Life specializes in senior final expense insurance. This allows us to be experts in the industry. Our goal is to educate seniors and their families on the best way to prepare for funeral costs and expenses associated with death.

woman sitting and smiling

Final Thoughts About Modified Whole Life Insurance

a. Modified whole life funeral insurance is a simple and easy way to plan for funeral costs. This plan is best for those with serious medical complications.

b. If you have a straightforward medical history, you will likely qualify for day-one coverage with lower premiums.

c. Speak with an independent agent to better understand your options and find the best plan at the lowest price point.

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