What is an umatured life insurance policy?

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Asked April 23, 2012

1 Answer

Any life insurance policy that is still in effect can be thought of as an unmatured life insurance policy. There are some exceptions, and individual policies can be written to include still others, but the general idea is that a policy has matured either when the person dies, or outlives the span of a term life policy. Anything within those bounds is typically the maturing phase of the policy, meaning that it is still accruing the funds necessary to balance the final payout in statistical terms.

A term life policy has matured when the term of the policy expires, or when the insured person dies. In the first case, the policy must be renewed or converted or the money paid into it will be lost. In the second case, the face value of the policy is payable to the beneficiaries named in the policy.

Whole life insurance policies are more complicated. They are considered to be mature when the insured person dies, but the policy also has a maturity clause, usually age 100 for a whole life policy, which is the actual maturity age. If the insured person lives to age 100, the policy's face value is due and payable, or can be maintained in a non-interest bearing account until the insured person dies. The key is that the policy will stop earning interest when it has matured.

Other types of permanent life insurance may have different maturity ages, or none at all. The pertinent information will be included in the policy, and you should take the time to read and understand the policy to be fully aware of all the conditions which apply. Some policies have earlier maturity dates, and some may not mature until age 105 or more. If you have trouble finding this information in your policy, contact your insurance company to find out exactly where it is located and how the terms of the contract are defined.

Answered April 23, 2012 by Anonymous

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