Modified Whole Life Insurance

Jake Irving

Jake Irving is the Founder of Policy and has contributed to articles for Synchrony Financial, GoBankingRates, Yahoo News, UpCity, Zapier, LegalZoom, and more.

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When researching senior life insurance, there are many different plan options. Modified whole life insurance is commonly 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?

A modified whole life policy allows seniors with previous health concerns to obtain coverage due to a more lenient underwriting process. With this flexible underwriting comes a 2 – 3 year waiting period. If the insured passes away after the waiting period ends, the beneficiary will receive the full death benefit. 

Each funeral insurance company has different underwriting requirements and policy details. However, the following is a typical payout structure that many insurers implement with their modified products.

  • 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 valuable due to the underwriting leniency they provide. Seniors with serious medical concerns are commonly approved for this type of plan.

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

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

Modified Whole Life Insurance Premiums

The premium for a modified whole life policy is $40 – $100 for a $10,000 policy. However, the cost is impacted by age, policy amount, gender, and health. The price you pay could be higher or lower based on these factors.

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 products on the market. The rates shown are for non-smokers.


Monthly Premiums

$10,000 $15,000 $20,000


Monthly Premiums

$10,000 $15,000 $20,000

Other Types Of Whole Life Funeral Insurance Plans

While modified might be the right plan for specific situations, it isn’t always. There are cheaper and better-structured plans that offer immediate coverage that you could qualify for. In addition to modified, there are three other types of burial insurance.

  • 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 most significant 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. If the insured passes away during the waiting period, the beneficiary will receive all premiums paid plus interest, typically 10%.

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

In certain circumstances, guaranteed acceptance plans are cheaper than modified coverage. You should work with a specialized insurance agency to determine what plan is right for you.

Man and woman smiling and standing

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 with simplified issue underwriting and will approve applicants with certain 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 fully covered. The waiting period restriction is in place because of the insurance company’s added risk. The premiums will also be more expensive than a 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 a specialized insurance agency to find your next best option.

How does Modified Life Insurance Work?

This plan is designed for seniors with medical concerns who may not qualify for immediate final expense insurance coverage. The underwriting process is streamlined and straightforward, 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 insurance agency that has access to multiple policies. Every insurance company has different underwriting standards, so the more plans you and your agent 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 through 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 life insurance, 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 insurance agency specializing in final expense insurance will be your best chance to secure a low-priced plan with immediate coverage.

Final Thoughts About Modified Whole Life Insurance

a. Modified whole life burial 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 probably qualify for immediate coverage with lower premiums.

c. Speak with a specialized insurance agency to better understand your options and find the best plan at the lowest price.