Final answer:
A unique feature of modified life insurance is that it starts with lower premiums that increase over time before becoming fixed, and it includes a cash value component that can be used as a savings account. This policy is a hybrid between term and whole life insurance, offering flexibility and a death benefit.
Step-by-step explanation:
A unique feature of modified life insurance is that it combines elements of both term and whole life insurance. Initially, premiums are lower, like in term insurance, but they gradually increase over time, eventually becoming fixed like in traditional whole life policies. The cash value component makes modified life insurance policies more flexible, as the accumulated cash can be used by the policyholder for various needs. This type of policy, therefore, provides not just a death benefit, but also acts as a savings account from which funds can be borrowed or withdrawn.
It's important for policyholders to be aware of their own and their family's health history, which can impact the risk assessment by the insurer. Similarly, like with car insurance, an individual might have knowledge of personal risk factors that are not immediately apparent to an insurance company. It is these personal disclosures that can influence the terms of a policy and the cost of premiums in both car and life insurance scenarios.