Purchasing life insurance is an integral part of Adulting, just like yearly dentist check-ups and getting your vehicle’s oil changed regularly. But if you are just starting out in your career, the monthly premiums may seem a bit daunting, and how do you even begin to sort out which kind of life insurance is best for you? Or perhaps you are dealing with a chronic illness or disability and have already been denied a policy in the past? However, it’s still important to find a way to provide some security for your loved ones in the event of your death. Before you conclude that the topic is just too daunting, let’s take a look at a type of permanent life insurance that may be the perfect answer to your circumstances. Both young adults and people with chronic illnesses or disabilities may find that Modified Whole Life Insurance is the best option for their end of life needs.
Permanent vs Term Life Insurance
Before we get into the details of Modified Whole Life Insurance, it’s important to understand that Modified Whole Life Insurance is a type of “Permanent Life Insurance”. The main characteristics that define Permanent Life Insurance are:
- Lifetime Coverage:your period of coverage never expires (unlike Term Life Insurance )
- Accumulated Cash Value: your policy has a cash value that you can draw on.
- Tax-free Payout: your family won’t have to pay taxes on the benefits at your death
Modified vs Whole Life Insurance
Modified Whole Life Insurance takes the perks of Whole Life Insurance and phases your premiums over time. In this phased approach your initial payments are far lower than regular Whole Life Insurance premiums would be, and they gradually increase over time. This can be of great benefit to someone just starting out, who has a limited monthly budget, but good potential for increased income over time such as a recent graduate, paying off student loans as they begin a career in a lucrative field.
In addition, Modified Whole LIfe Insurance coverage is a great option for you if you have a chronic illness or disability. Most policies have few or no exceptions for health issues, barring a brief waiting period to cover the higher risk of these types of cases. Oftentimes, Modified Whole Life coverage is one of only a few types of policies that chronically ill or disabled people can qualify for, but it does provide the coverage and protection to provide peace of mind and security for the beneficiaries of the policy.
Modified Whole Life Insurance as Emergency Savings
Another significant benefit of Modified Whole Life Insurance is that your policy accrues a cash value over time. In the event of an emergency, you can borrow against that value—tax free! It’s also an option to withdraw cash against the value of your policy, without the obligation of repayment—simply reducing the value of the whole policy. However, that will put some tax obligations on you or your beneficiaries and does mean that the eventual payout of the policy will be reduced by that same amount.
Modified Whole Life Insurance: A Good Option For You
In general, Modified Whole Life Insurance is an excellent, dependable, flexible option for a wide range of circumstances. To find out if it is truly the best option for your lifestyle, talk to a professional in the field about your specific needs. Adulting is hard, but Life Insurance can be easier to navigate with the right people by your side. USA Life is here to help you make the best choices for your future security.