A permanent form of coverage is whole life insurance. Permanent simply means that the benefit of policies and death should never end, but often – primarily because of the choices made by the owner. Like, if you have a term-life insurance policy, your life insurance policy expires after the selected term ends. If you have a permanent life insurance policy (such as a whole or universal policy), your policy will remain in effect as long as you continue to pay the premiums in full and on time.
Permanent policies cover you throughout your life. If you live a long life, though, there’s a caveat. Permanent policies – the most common variety being the whole life-increase cash value over time, but does not get expired. If you live long enough, your policy will eventually “mature.” Your policy will pay the cash value of the policy and your life insurance coverage will end when you reach maturity. A benefit paid to your beneficiaries after your death is not considered a taxable income. If you’re a beneficiary, the death benefits remain indefinitely payable if the owner won’t allow the policy to expire or cash before he or she died.
Whole life insurance may expire if the covered person lives after the maturity date of the policy – although this is extremely rare. The date of maturity is set at the time of application and is usually set at 100+ years of age. Most people do not live beyond the date of maturity. In another case, whole life insurance may expire if the owners stop paying premiums or if the person surrenders the accumulated cash value policy. Temporary needs sometimes replace the desire to maintain the contract.