The "modified" part of modified term life insurance policies refers to the alternative payment structure of such coverage. Modified term life offers the same protection that a standard term life policy would but with several payment options. Premiums may start out lower than those of a standard policy and gradually increase over the policy's term. Alternatively, premiums may initially be higher and slowly decrease over time. Because of these diverse payment options, modified term insurance can accommodate a variety of budgets and coverage needs.
With traditional term life insurance, premiums start out relatively low and then increase as the policyholder ages. Modified term life insurance coverage can offer a number of alternative premium-payment plans that provide policyholders with affordable rates when they need them the most. For instance, one type of modified term life policy might offer stagnant, low-cost premiums for three years, after which they increase for the remainder of the policy's term. On the other hand, another modified term insurance policy might provide higher premiums initially but have those premiums decrease significantly over the life of the policy.
The benefits of modified term life insurance coverage are many. For one, it offers endless financial flexibility in terms of how premiums are paid. Depending on your current and expected life insurance budgets, you can structure your payments to start out high or low. Policyholders may also set up modified term insurance coverage to automatically renew if necessary. Finally, like all term life policies, modified term coverage allows the insured to decide on the appropriate death benefit and term that fit his/her needs. The terms of modified life insurance coverage usually range from five to 20 years depending on the carrier.
Selecting the appropriate modified term life insurance plan requires a significant amount of planning and forecasting. In order to choose the best premium-payment structure for your needs, you will need to think about what you make currently and what you expect to make in the future. Some plans offer considerably lower premiums at the outset, which is an ideal approach if you are young and just starting your career. Other plans offer higher premiums at first, but these costs then decrease as you approach retirement. Which plan you choose will require some forethought on your part.
The best way to decide on a modified term life insurance plan is to request quotes on the coverage. You can view as many as five free modified term life insurance quotes by entering your information into the fields above. You can instantly see what the top life insurance providers have to offer in terms of modified term life payment plans.