Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Whole life insurance expires when the insured dies because it's a type of permanent life insurance policy. It can terminate earlier though if the policyowner does not pay the premiums on the policy (and there isn't enough cash value built-up inside the policy to sustain it).
If the policy fully endows (the cash value equals the face amount of the policy - generally the insured has reached age 100 when this happens), the insurance company will terminate the coverage and give you a check equal to the face amount of the coverage. Please note, an endowment is subject to income tax on the amount that that is greater than the cost basis of the policy even though the death benefit would be tax-free.
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much
That's a great question! One of the best features of a whole life policy is that as long as you are making payments, the policy lasts as long as you do. You can structure these policies to where they are paid off in a set number of years, and the coverage extends again, as long as you do. I hope that helps, thanks for asking!
Whole Life Insurance does not expire; it endows. When you hit a certain point in the policy (usually age 100), the cash value equals the face amount. At that time you can take the cash, or let it keep growing. The policy will never expire even after it endows.
Only term life insurance expires. Whole life and universal life actually endows. It depends on how the agent sets the policy up at point of application, but the premiums are based on minimum, target and maximum premiums. The illustrations will show the age that was targeted for the coverage to endow. The most common ages are 95, 100, 105 and 121 years old. The whole life policy will endow at the specified age which means the premiums will begin to exceed the death benefit. At this point, you can take the cash value, you can continue paying premiums to allow the cash value to grow or you can stop paying premiums and allow the money to grow and leave your beneficiary the cash as a death benefit. Whole life insurance will not just simply expire.
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If the policy fully endows (the cash value equals the face amount of the policy - generally the insured has reached age 100 when this happens), the insurance company will terminate the coverage and give you a check equal to the face amount of the coverage. Please note, an endowment is subject to income tax on the amount that that is greater than the cost basis of the policy even though the death benefit would be tax-free.
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much