What is a life cycle policy?

UPDATED: Jul 13, 2010

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UPDATED: Jul 13, 2010Fact Checked

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Asked July 13, 2010

1 Answer


For all intents and purposes, a life cycle policy is nothing more than another term for a whole life insurance policy. Ideally, the policy pattern will follow a predictable schedule where the insurance policy is applied for when the person is between 30 and 50, at which time the person has achieved a degree of stability financially. Over the following years, premiums are paid into the policy, and actions are taken against by the policyholder, allowing the policy to mature or even profit. As other needs for life insurance occur, term life policies are then added to the cycle to cover the increased expenses. The end of the cycle comes when the insured person dies, presumably leaving behind offspring who will benefit financially from the policyholder's demise and undertake to repeat the process themselves as they go through life.

"Life cycle" could also be applied to the processing end of the insurance policy, where the policy begins with a potential application and develops into a complete life insurance policy which revolves around a repetitive premium schedule, gets processed and modified over time, and eventually becomes a payable claim against the insurance company. Used in this way, the term life cycle could apply to almost any endeavor, and is not proprietary to the insurance industry.

Answered July 13, 2010 by Anonymous

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