What is policyholder's situation at the Maturity Date of a Life policy?

[LostDollar]

(Caveat, not an agent)

What happens to a life insurance policy holder's "guaranteed death benefit at the beginning of the year" and "guaranteed surrender value at the end of the year" in the policy year of maturity?

The illustration in the policy also has a box labelled "Guaranteed Benefit Expiry Date" in which the date is the first policy anniversary date following the policyholder's 100th birthday.

There was not a box like that in the pre-purchase illustration. I did not understand the concept that the illustration stopping at age 100, instead of age 121, probably conveyed the idea of maturity at age 100.

So I need to know what happens at the maturity date.

Thanks.

 

[magiced]

At the maturity date, the cash value and death benefit are equal, so the policy pays out. Call your agent or the insurance company.

 

[Lloyds of Lubbock]

I would suggest you read your policy.
Maturity provisions are clearly spelled out.
Guaranteed benefit expiry date is not the same thing as policy maturity.
Your benefit may no longer be guaranteed but that does not mean it is not inforce.
If you have the opportunity to copy and post the maturity provisions from the policy you will probably get a better answer.
Technically the above poster is correct

 

[scagnt83]

(Caveat, not an agent)

What happens to a life insurance policy holder's "guaranteed death benefit at the beginning of the year" and "guaranteed surrender value at the end of the year" in the policy year of maturity?

The illustration in the policy also has a box labelled "Guaranteed Benefit Expiry Date" in which the date is the first policy anniversary date following the policyholder's 100th birthday.

There was not a box like that in the pre-purchase illustration. I did not understand the concept that the illustration stopping at age 100, instead of age 121, probably conveyed the idea of maturity at age 100.

So I need to know what happens at the maturity date.

Thanks.

If you can post the exact wording it will be immensely helpful.

It sounds like your policy is only Guaranteed to age 100.

 

[jdeasy]

(Caveat, not an agent)

What happens to a life insurance policy holder's "guaranteed death benefit at the beginning of the year" and "guaranteed surrender value at the end of the year" in the policy year of maturity?

The illustration in the policy also has a box labelled "Guaranteed Benefit Expiry Date" in which the date is the first policy anniversary date following the policyholder's 100th birthday.

There was not a box like that in the pre-purchase illustration. I did not understand the concept that the illustration stopping at age 100, instead of age 121, probably conveyed the idea of maturity at age 100.

So I need to know what happens at the maturity date.

Thanks.

Depends on the type of policy. If whole life it has to endow at some point. Meaning the cash value and face are the same. Most used to endow at age 100. Most now go to age 120 or 121. But some still use age 100. If it doesn't endow it's not whole life.

Many term policies are renewable to age 95. Some less.

Need more info than out of context quotes.

 

[LostDollar]

Depends on the type of policy. If whole life it has to endow at some point. Meaning the cash value and face are the same. Most used to endow at age 100. Most now go to age 120 or 121. But some still use age 100. If it doesn't endow it's not whole life.

Many term policies are renewable to age 95. Some less.

Need more info than out of context quotes.

(Caveat, not an agent)

When a whole life policy endows, does that mean that a death benefit is no longer payable to the policy beneficiaries and that the policy must be surrendered for payement of its cash value to the policy owner?

 

[LostDollar]

I would suggest you read your policy.
Maturity provisions are clearly spelled out.
Guaranteed benefit expiry date is not the same thing as policy maturity.
Your benefit may no longer be guaranteed but that does not mean it is not inforce.
If you have the opportunity to copy and post the maturity provisions from the policy you will probably get a better answer.
Technically the above poster is correct

Thank you for your comment.

I am not the best careful reader but I have scanned the policy documents twice and I have not found any mention of the word maturity.

 

[LostDollar]

If you can post the exact wording it will be immensely helpful.

It sounds like your policy is only Guaranteed to age 100.

(Caveat, not an agent)

Yes I agree. But I need to understand what "Guaranteed to age 100" means. (or in my specific case, what guaranteed to the 100th policy anniversary date would mean).

After trying to scan through my ExamFX study book last night, and after receiving this policy and trying to follow it carefully, I think my thoughts have been naive in a couple of ways.

I have thought that when policies hit that number of 100 or 121, the money is no longer available to the policy owner. If I am understanding it correctly, the ExamFX study book suggests that is not the case.

I have also thought that policies nowadays were issued for the number 121, not 100. The pre-buy illustration I received encourages that line of thought with these statements:

The traditional non-participating whole life policy you are considering offers permanent protection with a guaranteed single premium, cash value and death benefit. This policy has no maturity age. For projection purposes, this proposal's maturity age is deemed to be age 100.

However, although I am unable to find the word maturity in the policy itself, the policy is definitely focused on the age 100 term. ( I do not have time right to find and retype all the wording that indicates that.) If I would have clearly understood at the outset this policy only had a maturity number of 100, I would not have bought it.

I think the next thing I need to understand is the question I asked JD above.

 

[LostDollar]

The issue I am having here is with income tax on a policy gain.

Living to 100 is becoming more and more likely. When I bought this policy I had four options. The other three all went to 121 for maturity or endowment. I thought this one would too.

Under single premium MEC rules, surrendering a policy for cash creates an income tax event. So if I have a single premium whole life policy that matures or endows on its 100th policy anniversary and I live beyond that date, does that mean the death benefit is no longer payable and the only way cash comes out of the policy is for an income tax generating cash surrender?

The policy, JD's post, and what I can make out from the ExamFX study book suggest to me that is the case.

 

[jdeasy]

(Caveat, not an agent)

When a whole life policy endows, does that mean that a death benefit is no longer payable to the policy beneficiaries and that the policy must be surrendered for payement of its cash value to the policy owner?

When it endows it is paid to the owner.