Reconstructing an amplitude-modulated (AM) signal with a modulation index below 0.01 is a significant challenge for conventional and established direct and digital demodulation methods. This work examines the importance of appropriate demodulation techniques and methods for analyzing and evaluating their performance using the sensing principle of electrically modulated magnetoelectric (ME) sensors. These magnetic field sensors produce a double-sideband amplitude-modulation with carrier (DSB-AM-WC) signal at the sensor output, and their ultralow modulation index often limits an accurate recovery of magnetic signal information. Addressing this limitation requires optimized demodulation strategies to realize the full potential of this ME sensor system for use in biomedical applications. This study assesses signal integrity during frequency conversion and defines detection limits for an analog demodulator designed for DSB-AM-WC signals with an ultralow modulation index, which is explicitly designed for this sensor concept. The proposed low-cost demodulation system converts the 500 kHz [radio frequency (RF)] DSB-AM-WC sensor output to an intermediate frequency (IF), allowing subsequent analog-to-digital (A/D) for digitization. This work analyzes the analog signal path of electrically modulated ME sensors and develops a sensor emulator setup for controlled testing of analog demodulation schemes. The emulator can generate AM signals (500 kHz carrier, sideband ranging from 10 Hz–12 kHz, modulation index from 0.00001–1) while primarily considering electrical noise contributions from the hardware at room temperature, thus bridging the gap between theoretical analysis and practical implementation. Experimental results demonstrate that the proposed analog demodulation system, featuring a double-balanced frequency mixer (SRA-8+, Mini-Circuits, Brooklyn, NY), achieves an ultralow noise input-referred noise of 10 nV/ $\sqrt {\text {Hz}}$ , enabling the recovery of modulation indices as low as 0.000249, delivers an signal-to-noise ratio (SNR) of 20 dB, and provides a stable dynamic range (DR) of 64 dB at output. The results confirm the effectiveness of the developed low-cost demodulation system while highlighting limitations, including the effect of input power and the phase shift available in diode-based mixers on maintaining signal integrity for low modulation index AM signals. The results identified the first possible guidelines for optimizing analog front-end systems for ME sensors. Future work will focus on investigating the signal output of real ME sensor prototypes, benchmarking the proposed system against state-of-the-art technologies, and considering additional environmental factors influencing performance.