When a whole life insurance policy matures, the beneficiary receives the death benefit provided in the policy. This is different from other types of insurance where the beneficiary may have to pay premiums and receive a payout if they are the beneficiary of a life insurance policy.
Your policy will likely have a surrender option. Surrendering a whole life policy allows you to cancel the policy early without paying any early surrender charge. This option gives you a chance to rethink whether the policy was right for you. You may have changed your mind about living to 100 or you may have gotten married and decided to live for a different reason. Whatever your reasons for wanting to surrender a policy, be sure to read the fine print on your policy to find out how much you’ll have to pay to get out of the contract. You may be able to avoid an early surrender charge by making a permanent surrender payment to your insurer.
How is a whole life insurance policy different from term life insurance?
When you buy a whole life, the cash value of the policy increases over time. In contrast, with a term policy, your premiums are fixed in the beginning. However, the death benefit will be the same for both the policies. The cash value increases with the age, but when you die, the cash value will be paid out as a lump sum. A term policy is always paid out in one lump sum.
Term Insurance is like Term Life Insurance
Term insurance is like term life insurance. A term insurance policy is generally paid out in one lump sum. You have a set premium that is fixed at the beginning. As the term comes to an end, the policy lapses and a new one must be purchased. Whole Life Insurance is similar to Term Insurance. Whole life insurance builds up cash value over time. This means that your death benefit will increase over time.
Finally,
When a whole life insurance policy matures, the beneficiary will typically receive the cash value of the policy, along with any accrued interest. This can be a great way to provide financial security for loved ones in the event of your death. If you’re thinking about purchasing a whole life insurance policy, be sure to consult with an experienced agent to find the best plan for your needs.
