The premium for a modified whole life policy is

• A. Lower than the typical whole life policy during the first few years and then higher for the remainder
• B. Higher than the typical whole life policy during the first years and then lower
• C. The same as the typical whole life policy throughout
• D. Determined solely by age at issue

Answer: (A)

Modified whole life is designed to be affordable at the start. It charges a lower premium for a short initial period, then after that period the premium rises to a higher, level amount that continues for the life of the policy. This structure lets you obtain coverage early on while eventually funding the policy at a higher rate to catch up on the cost of insurance and maintain the policy long-term. Because of this pattern, the premium is lower than a typical whole life policy during the first few years and then higher for the remainder, which is why this choice is correct. It isn’t simply the same as standard whole life throughout, and it isn’t determined solely by age at issue—the policy feature itself creates that initial low rate followed by a higher ongoing rate.