What happens to the premium in a Modified Whole Life policy after the first three years?

In a Modified Whole Life policy, the premium begins at a lower level for an initial period, typically the first few years, before increasing to a higher, level premium for the remaining duration of the policy. After the initial period, which usually lasts about three years, the premium increases to the predetermined level amount. This structure is designed to make it more affordable for the policyholder during the early years when financial commitment might be a concern.

Understanding this feature of Modified Whole Life policies is crucial because it emphasizes the intended affordability in the initial years, followed by stabilization at a constant premium amount that represents the long-term cost of coverage. In this way, policyholders can plan their budgets for the increased premium after the initial period, ensuring they are aware of the financial changes that will occur.