Any reputable agent selling whole life insurance will avoid modified plans unless there is no other option. Every client dreads the bad news that only modified whole life can be offered (agents don’t enjoy giving the bad news either). To soften the blow, I’ve constructed a list of medical conditions that typically trigger an offer for modified whole life. I want to caution that every insurance company is slightly different in the medical conditions they accept, so don’t think of this list as exhaustive. Also, as a general rule, the companies with the best pricing tend to have more restrictive underwriting.
- organ transplant
- HIV/AIDS
- terminal illness
- congestive heart failure
- cognitive impairments such as dementia
- heart problems within the last year
- supplemental oxygen (some companies will accept this for sleep apnea)
- recent drug or alcohol abuse
- recent cancer
- assistance with daily living activities (eating, bathing, etc.)
- current dialysis
If you do get an offer for modified whole life, it isn’t totally bad. You will have full coverage after a two or three year waiting period. In the unfortunate event you pass away during the waiting period, the premiums you paid weren’t wasted because all of that money comes back to your beneficiary plus interest, and the interest is better than anything you would get at a bank. Be sure to contact us with any questions.
