Which of the following best describes a modified whole life policy?

A modified whole life policy is best characterized by the structure of its premium payments, which are designed to change over time. In this type of policy, the premiums are initially lower than standard whole life premiums and increase after a predetermined period. This structure allows policyholders to secure whole life insurance coverage at a more affordable initial cost, which can be particularly appealing to younger individuals or those facing financial constraints.

The increased premium typically occurs after a period of 5 to 10 years, at which point the premium levels out and remains constant for the remaining duration of the policy. The policy still provides lifelong coverage and accumulates cash value, distinguishing it from term insurance, which only offers coverage for a specific period without cash accumulation.

Other options outline features that do not fit the definition of a modified whole life policy, such as describing limited-term coverage or lack of cash value, which are characteristics of different types of insurance policies.