The Short Answer
A life insurance policy with a maturity date ends on that date. The insurance company pays the owner, while the insured is still living, and the coverage stops. The beneficiary receives nothing, then or later.
How much is paid depends on what kind of policy it is. Whole life is built so the cash value reaches the face amount at maturity, so the payment is close to the full face. Universal life generally pays whatever is in the account, and on a thinly funded contract that can be a small fraction of the death benefit.
Whatever is paid above what you put in is taxable as ordinary income, and the income-tax-free death benefit is gone.
One question decides what to do about all of it. Will the insurance company let the policy continue past the maturity date, and if it does, does the death benefit continue at the full face amount? Everything below hangs off that answer.
Your life insurance policy has an end date. Most people never learn this, because most people do not reach it.
It sits on the schedule pages near the front of the contract, usually labeled Maturity Date or Termination Date. If the policy is old enough, that date is the policy anniversary nearest the insured’s 100th birthday, and reaching it is not a milestone the contract celebrates. It is the date the policy expires.
This page is for the person holding a letter about it, and for the adult child or trustee who found the date while sorting a parent’s paperwork.
You can sell a life insurance policy, not just cancel it.
Cancel it, and the insurance company pays you a set amount. Sell it, and an institution buys the policy from you, often for far more. There is no upfront cost to find out what yours is worth.
- First, check whether this applies to you
- Who gets the money, and how much
- Universal life at the maturity date
- Whole life at 100
- Find these three lines in your policy
- Can the maturity date be extended
- Your options before the date arrives
- If you are handling this for a parent
- Questions about policy maturity
First, Check Whether This Applies to You
If the policy was bought in the last twenty years or so, its end date is probably age 121 rather than 100, and outliving it is not something you need to plan around. If it is older than that, or if you are not sure, the date is printed on your own schedule page and it takes a minute to find.
Age 100 is not an arbitrary number. It came from the mortality table the policy was priced on.
The 1980 CSO table, used to price permanent policies for roughly a quarter century, stops at age 100. Contracts built on it were built to end there. A handful of much older policies sit on a table that stops at 96.
The 2001 CSO table runs to age 121. It was permitted from 2004 and required for new policies from January 1, 2009. The 2017 CSO table, required from January 1, 2020, also runs to 121. A policy on either of those tables will almost certainly outlast the person insured by it.
So the rough rule is that this is a pre-2004 problem. But treat it as a rule of thumb rather than a guarantee, because the exceptions are real. One universal life contract issued in 2014 that we reviewed while writing this still carries a maturity date at the insured’s age 100. The only reliable answer is the date printed on your own schedule page.
If your date turns out to be 121, you came here for something else. Usually it is one of two questions: what the policy is worth today, or why the premium keeps climbing. Our guides to what your policy is worth and rising universal life premiums answer those directly.
Who Gets the Money, and How Much
The owner is paid, while the insured is alive. Not the beneficiary.
This is worth stating flatly, because several of the pages that rank highest for this question say the opposite. You will read that the face amount goes to the beneficiary at 100 even if the insured is still living. That is not how the contract works, and it is not how the tax code treats it either. Federal law excludes life insurance proceeds from income when they are paid by reason of the insured’s death. Nobody has died, so that exclusion does not apply.
You will also read that a policy’s cash value equals its death benefit at maturity, stated as though it were true of all permanent insurance. It is true of one kind and false of the other, and the difference is the whole story.
| Whole life | Universal life | |
|---|---|---|
| Paid at maturity | Roughly the face amount | The account value |
| Why | Designed so cash value grows to equal the face amount at maturity | No such guarantee. You receive what is in the account on that date |
| Typical result | You collect nearly all of it | The face amount disappears |
| Usual tax result | A real gain, taxed as ordinary income | Often no gain at all, because premiums paid exceed the account value |
| What to do | Usually keep it, and plan for the tax year | You have a decision worth making carefully |
What Happens When a Universal Life Policy Reaches Its Maturity Date
The policy pays what is in the account and terminates. One universal life contract in circulation states it plainly. Its maturity date is the policy anniversary on which the insured attains age 100. If the insured is living and the policy is in force on that date, the cash value is payable and the policy terminates. The same contract adds, elsewhere, that the policy will not continue past the maturity date.
Universal life was never built to endow. Premiums are flexible, monthly charges come out of the account, and the account holds whatever is left. Decades of low crediting rates and rising cost-of-insurance charges mean many of these contracts arrive at 100 carrying very little. A guaranteed universal life policy is the extreme case, because it was designed to hold a death benefit on almost no account value at all. That design works exactly as intended right up until the maturity date, and then it pays what it has.
An illustration. A $250,000 universal life policy. The insured is 97. The account value is $18,000, and the premiums paid over the life of the policy come to $62,000.
| Do nothing | Continue at full face | Surrender today | Sell today | |
|---|---|---|---|---|
| You receive | About $18,000, at 100 | Nothing now | About $18,000 now, less any surrender charge | A market offer |
| Death benefit after | None | $250,000 continues | None | None for the family |
| Federal tax | No gain; premiums paid exceed the value | None now | No gain; premiums paid exceed the value | Split across three tiers, part of it tax free |
| Requires | Nothing | The carrier to agree | A form | A buyer, and time |
Three of those four columns hand this family about $18,000 on a $250,000 contract. That is the shape of the universal life problem, and it is why the second and fourth columns are worth the phone calls.
If the premium picture is part of why the account is thin, our guide to rising universal life premiums covers how to read what the carrier sends back.
What Happens When a Whole Life Policy Matures at 100
The policy pays roughly the face amount, and then the tax arrives.
Traditional whole life is built to reach this point. The cash value climbs on a schedule toward the face amount and, at the maturity date, the two meet. The insurance company pays it out. The money is not lost, and the carrier does not keep it.
What is lost is the tax treatment. A death benefit generally passes free of income tax. A maturity payment does not. The gain is what you receive minus what you paid in premiums, net of dividends taken. It is taxed as ordinary income, at the same rates as wages and interest, rather than at capital gains rates. The insurance company reports it, usually on a Form 1099-R. The IRS instructions for Forms 1099-R and 5498 direct payers to report payments of matured or redeemed endowment and life insurance contracts on that form.
An illustration. A $200,000 whole life policy. The insured is 96. Cash value is $172,000 and climbing toward the face amount, and premiums paid come to $58,000. At the maturity date this contract pays roughly $200,000 and produces roughly $142,000 of ordinary income in a single tax year.
Here is the part a life settlement brokerage does not usually volunteer: for this owner, waiting is almost certainly the right answer. No sale pays $200,000 on a $200,000 policy. The contract is about to pay nearly the full face amount, and letting it finish beats taking a discount on it.
What is worth doing is planning around the year it lands in.
One tax-year effect that catches families off guard. Medicare sets Part B and Part D premiums using income from two years earlier. A large one-time distribution at 100 can therefore raise Medicare premiums at 102. A policy maturing is not one of the life-changing events Social Security accepts on Form SSA-44, so there is no appeal for it. The surcharge does fall away on its own once income comes back down. This is one to raise with a tax professional before the maturity date rather than after.
Tax treatment depends on your own cost basis, your state, and your filing situation. We recommend talking with a tax professional. Citizens Life Group does not provide tax advice.
Find These Three Lines in Your Policy
Everything above turns into a decision once you know three facts, and all three come from the contract and a phone call.
- The maturity date. On the schedule pages near the front, sometimes called the termination date. This tells you whether you have twenty years or eight months.
- What is payable on that date. Look for whether the contract promises the face amount or the cash value at maturity. Those are two different words for two very different outcomes, and on universal life it is nearly always the second one.
- Whether the policy can continue past that date. Some contracts contain a continuation provision. Many contain nothing at all. If yours is silent, that is an answer too, and it means asking the carrier directly.
When you call, ask by outcome rather than by product name. Carriers use different names for the same feature and no name for features they handle by endorsement. The questions that work are: what will you pay on the maturity date, will you keep this policy in force past that date, and if you will, what is the death benefit afterward. Ask for the answers in writing.
Many contracts also entitle you to one projection of future values each policy year at no charge, and the contract quoted above commits to exactly that. In most states, NAIC Model Regulation 582 makes it a right for policies sold since about 1997, so a contract older than that can sit outside the rule. Ask what it costs when you call.
Can the Maturity Date Be Extended
Sometimes. It is generally not automatic, you usually have to ask, and the terms vary enough that the answer alone tells you very little. Carriers and agents call this a maturity extension, and some contracts name it a continuation provision instead.
There are three versions in circulation, and the difference between the second and the third can be six figures.
| What continues | What it means for you | |
|---|---|---|
| No continuation available | Nothing. The contract terminates and the value is paid | The maturity date is a hard stop. Plan around it |
| Continues at the value already there | The policy stays in force, but the death benefit becomes roughly the value in the policy plus interest | The face amount is gone. The policy is now worth about what it holds |
| Continues at the full face amount | The death benefit stays at the face amount, typically with no further premiums and no further monthly charges | The best outcome available, and worth real effort to obtain |
Two practical notes. First, carriers are reportedly less willing to do this on universal life than on whole life, which is not surprising given that a universal life maturity costs the carrier less than a death claim would.
Second, where a request is required it can carry a deadline. At least one filed contract requires the election in writing at least 30 days before the scheduled maturity date, and carrier notice of an approaching maturity commonly goes out only 30 to 90 days ahead. That is not much time for a decision of this size, and asking early costs nothing.
There is also a settled federal framework behind all of this, which is worth knowing about if a carrier tells you a policy cannot stay in force past 100 for tax reasons. It can.
The IRS asked for comments on the problem in Notice 2009-47. Revenue Procedure 2010-28 then created a safe harbor for contracts that continue past age 100. It also dropped a condition floated earlier that would have required the death benefit to stay at 105% of the cash value.
Revenue Procedure 2018-20 modified and superseded it in 2018, extending the same safe harbor to contracts built on the 2017 tables and any other standard table that reaches past 100. A contract tested the way those rules describe keeps its standing as life insurance even though it stays in force after the insured turns 100.
Your Options Before the Date Arrives
Five, and the first one is what happens if nobody does anything.
1. Let it mature. The contract pays what it promises on that date and ends. For the whole life owner this is often the right answer. For the universal life owner it is usually the worst available outcome, because it converts a death benefit into a small check.
2. Ask the carrier to continue the policy. Covered above. This is the first call to make, because the answer changes the value of every other option.
3. A 1035 exchange. You will see this recommended, and near 100 it is close to fiction. Exchanging into a new life insurance policy means medical underwriting and a carrier willing to issue at that age, and neither exists. Exchanging into an annuity requires no underwriting, but annuities carry maximum issue ages of their own, commonly somewhere in the range of 85 to 90 depending on the carrier and the product. This is a real option at 72 and a dead end at 97.
4. Surrender early. You can take the cash value now rather than at the maturity date. On a universal life contract close to maturity this rarely changes the number much, and it does not change the tax character. Our guide to cashing out a policy covers the mechanics.
5. Sell the policy. A life settlement is the sale of the policy to an institutional buyer for more than the surrender value. In 2025 the average life settlement paid $212,066, against an average cash surrender value of $24,360, nearly 9 times as much, according to the Life Insurance Settlement Association’s 2025 annual market data. Individual results vary, and there is no guarantee that any policy will receive an offer. You can start with what your policy is worth.
Here is what makes this situation different from every other reason to consider selling. A buyer is paying for a death benefit. If the contract terminates at 100 and hands over the account value, the buyer’s payoff ends on exactly the same date yours does. The maturity date caps their upside the way it caps yours. So the question of whether the policy can continue past 100 is not just a question about keeping it. It decides whether selling it is worth anything either.
Where a continuation at the full face amount is available, a policy on a 96-year-old is close to the strongest case this market prices, because buyers price on life expectancy. Where it is not available, offers are usually small or do not come at all, and an honest broker will tell you so rather than run the file.
Two practical limits worth knowing before you spend time on it. Below about $100,000 of face amount a sale is unlikely. And the process typically runs 60 to 90 days from start to payment, so a policy a few months from its maturity date is probably out of runway.
On taxes, the two exits are not treated the same. A maturity payment is ordinary income above your basis, top to bottom. A sale is split across three tiers, with part of it a tax-free return of premiums and part of it taxed at capital gains rates. Our page on life settlement tax treatment walks through the tiers.
If You Are Handling This for a Parent
Authority is a separate question from the decision, and it is worth settling first.
Gathering documents, calling the carrier, and asking what happens at maturity are things a family member can generally do with a signed authorization. Selling the policy is different. A financial power of attorney has to grant authority over insurance contracts specifically, and a healthcare power of attorney grants none at all. Many states also require a physician’s statement that the owner was of sound mind at the time of a sale. Our guide on whether a power of attorney can sell a life insurance policy covers what to check.
If a trust owns the policy, the trustee signs, and the trust document governs what the trustee is allowed to do. That is covered in our guide to selling a trust-owned policy.
The decision itself can wait until the authority question is answered. The maturity date cannot, so start the carrier calls now and sort the paperwork alongside them.
Questions About Policy Maturity
What happens when a life insurance policy reaches its maturity date?
The policy ends and the insurance company pays the owner while the insured is still living. Coverage stops on that date, so no death benefit is paid later. How much is paid depends on the type of contract. A traditional whole life policy is built so its cash value reaches the face amount at maturity, so the payment is close to the full face. A universal life policy generally pays whatever is in the account on that date, which can be far less.
Who gets the money when a policy matures at 100, me or my beneficiary?
You do, as the owner. This is one of the most common misunderstandings about maturity, and you will find pages online saying the face amount goes to the beneficiary at 100 even if the insured is alive. That is not how these contracts work. A maturity payment is a living distribution to the policy owner, and the beneficiary designation stops mattering once the policy has ended.
Does a whole life policy pay the full face amount at 100?
Close to it, in most cases. Traditional whole life is designed so the cash value climbs to equal the face amount at the maturity date, which is why the payment at 100 is roughly the face. The money is not lost. What is lost is the income tax treatment, because a maturity payment is taxable above what you paid in, while a death benefit generally is not.
What does a universal life policy pay at maturity?
The account value, not the face amount, unless your specific contract says otherwise. One universal life contract in circulation puts it plainly: if the insured is living and the policy is in force on the maturity date, the cash value is payable and the policy terminates. On a thinly funded universal life or a guaranteed universal life policy, that account value can be a small fraction of the death benefit.
Is money from a matured life insurance policy taxable?
The gain is, and it is taxed as ordinary income rather than at capital gains rates. The gain is the amount you receive minus what you paid into the policy in premiums, net of any dividends you took. Many universal life owners find there is no gain at all, because their premiums paid exceed the account value. Tax treatment depends on your own basis and situation, so talk with a tax professional. Citizens Life Group does not provide tax advice.
Will I get a tax form for a matured policy?
Usually a Form 1099-R. The IRS instructions for Forms 1099-R and 5498 direct payers to report payments of matured or redeemed endowment and life insurance contracts on that form. A carrier does not have to file one if it is reasonable to believe none of the payment is includible in your income, which is why some owners receive nothing at all.
Can I extend my policy past its maturity date?
Sometimes, and it is generally not automatic. Some contracts contain a continuation provision, some carriers will add one by endorsement, and some contracts have nothing of the kind. Where it exists it usually has to be requested in writing, and at least one filed contract requires the election in writing at least 30 days before the scheduled maturity date. The terms matter as much as the answer, because some extensions continue the full face amount and others continue only the value already in the policy.
Can I do a 1035 exchange at 97 to get a later maturity date?
Realistically, no, though you will see it listed as an option. Exchanging into a new life insurance policy requires medical underwriting and a carrier willing to issue at that age, which is not something you will find. Exchanging into an annuity requires no underwriting, but annuities carry maximum issue ages of their own, commonly somewhere in the range of 85 to 90 depending on the carrier and the product. A 1035 exchange is a genuine option in your seventies and a dead end near 100.
Can a policy that is close to its maturity date still be sold?
It depends on whether the death benefit survives past the maturity date, which is the same question that decides everything else. A buyer is paying for a death benefit, so if the contract terminates at 100 and pays out the account value, the buyer’s payoff ends on that date too. Where a continuation at the full face amount is available, the policy can be attractive. Where it is not, offers are usually small or do not come at all. There is no guarantee that any policy will receive an offer.
My mother is 96 and I hold her power of attorney. Can I make this decision?
Not automatically. A financial power of attorney has to grant authority over insurance contracts specifically, and a healthcare power of attorney grants none at all. Many states also require a physician’s statement that the owner was of sound mind when a policy is sold. Requesting documents and asking the carrier questions is different from signing away an asset, and the second one needs the authority checked first.
If a term on your statement is unfamiliar, the glossary covers the rest.
Find out what the policy is worth while the death benefit is still there.
A policy review costs nothing and does not commit you to selling. Your details go to a licensed broker who reviews the policy and follows up, typically within one business day.
Sources
- IRS Notice 2009-47, request for comments on contracts continuing after age 100
- IRS Revenue Procedure 2010-28, the original age 100 safe harbor testing methodologies
- IRS Revenue Procedure 2018-20, which modified and superseded Rev. Proc. 2010-28 and extended the safe harbor beyond the 2001 CSO tables
- NAIC Life Insurance Illustrations Model Regulation (#582), the annual illustration right
- IRS Instructions for Forms 1099-R and 5498, reporting of matured endowment and life insurance contracts
- 26 U.S. Code § 101, the income exclusion for amounts paid by reason of death
- Medicare Part B costs, income-related premium adjustments
- Life Insurance Settlement Association 2025 annual market data
About This Article
Citizens Life Group is a licensed life settlement brokerage that represents you, the seller, and shops your policy competitively to maximize your offer. This article is general education for policy owners, families, and trustees, not legal, tax, or financial advice. What happens on your maturity date is governed by your own contract, and the tax result depends on your cost basis, your state, and your filing situation, so decisions here should be made with a tax professional. Citizens Life Group does not provide legal or tax advice. Figures are drawn from LISA’s 2025 Annual Market Data, are year-stamped, and individual results vary. There is no guarantee that any policy will receive an offer.