What distinguishes graded premium whole life from modified whole life?

Graded premium whole life insurance is characterized by a structure where the premiums increase at set intervals, usually for a certain number of years, before leveling out for the remainder of the policy's life. This means that in the early years, the premium payments are lower and increase at specified points. In contrast, modified whole life insurance typically begins with a lower premium that then increases at a predetermined time, but the increases are usually only once, transforming into a level premium after the initial period.

The essence of the distinction lies in the frequency and nature of the increases — graded premium whole life may exhibit multiple premium increases over time, while modified whole life generally involves a single adjustment after an initial period. Hence, this structure defines the differences between the two types of insurance products, making option B the correct choice by highlighting the distinct approaches to premium adjustments in graded versus modified whole life policies.