Maturity Date

Definition:

Maturity Date is the date when an investment becomes due and is paid back to the investor. In life insurance, the date on which the policy completes the policy term/ period is known as maturity date. On this date the life insured is liable to receive the applicable maturity benefits.

Description:

A maturity date is the exact time at which financial obligation must be paid in full. It is the time when the insurance company pays back the money owed to the insured as mentioned in the insurance contract.

If you have purchased an endowment plan on 15th January 2022 with a policy term of 12 years, then the maturity date is 15th january 2034. The life insured is required to survive throughout the policy term to help the policy reach maturity. In case the life insured dies during the policy term then the maturity date becomes invalid and the death benefit is paid to the nominee after the claim.

Example:

Ashish, aged 30 years, purchased an endowment policy for the policy term of 20 years and premium payment term of 10 years. He wanted to save money for his child’s education. Ashish was wise and wanted complete financial protection for his family in case he died during the policy term. So he paid the premium for the entire premium payment term. Ashish survived the policy term, and his endowment policy matured. At the end of the policy term, Ashish became eligible to receive the sum assured plus the bonus accrued till the maturity date. Ashish filed for a maturity claim, after which the insurance benefits will be payable to him.

ADV/9/22-23/1534