1. Brandon RobertsPRO
    Owner, The Insurance Pro Blog,
    Life insurance maturity occurs when the policy's reserve equals its death benefit and the reserve (also called cash value) is paid to the policy owner.

    Level premium life insurance policies have a charge that accounts for an investment portion of the policy to build a reserve that covers a portion of the policy's death benefit. The purpose is for the cash value to eventually replace all of the death benefit, and this is the point at which the policy matures.

    When a policy matures the cash value (which is another and more common term used for the reserve) equals the death benefit, and the cash value is paid to the policy owner there are taxable consequences to the extent that cash received exceeds the total of premiums paid.

    Due to this taxable consequence, some more recently designed policies have an indefinite maturity date so as to avoid maturity prior to the insured's death.
    Answered on April 16, 2013
  2. J Scott BurkePRO
    President, Newbury Inc., Evansville, Indiana
    All whole life policies have a maturity date but most people won't live long enough to see it. Modern policies use age 121 for the maturity date.

    Each year that you pay on your Policy you build more and more cash value and the insured amount that the insurance company has at risk reduces by the same amount.

    If you reach the age of maturity (or endowment) the cash value is equal to the entire death benefit. You are self insured at that point.
    Answered on April 16, 2013
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