A common reader question is “Does whole life insurance ever expire?”

Whole life insurance is a permanent form of coverage. Permanent implies that the policy and death benefit should never reach an end, yet they often do – primarily because of choices the owner makes.

If you are the owner, the coverage remains in force as long for as long cash value remains. If you stop making payments or surrender the policy, all bets are off.

If you are the beneficiary, the death benefits remain payable indefinitely provided the owner did not allow the policy to lapse, or cash it in before he or she passed away. Dig around for the paperwork and file a claim.

Do Whole Life Insurance Policies Ever Expire?

Whole life insurance policies sometimes expire even though the issuing companies designed them to be a permanent form of coverage. Sometimes people live far longer than expected. Others times people’s needs change as they grow older and they may relinquish the contract voluntarily.

Request a quote to determine the lifetime cost of perpetuity. The expiration date can coincide with the maturity, lapse, or surrender date.

Maturity Date

Whole life insurance can expire when the covered person lives beyond the policy’s maturity date – although this is extremely rare. The maturity date is established at the time of application and is typically set at age 100 or 121. Most people do not live past the maturity date.

The cash value of the policy equals the face amount (or death benefit) at the maturity date. The issuing company pays the cash value to the owner in a lump sum while the person is still alive.

Lapses & Surrenders

Whole life insurance can expire when the owners stop making premiums payments or when the person surrenders the policy to spend the accumulated cash value. Sometimes temporary needs supersede the desire to keep the contract in force.

Whole life insurance can lapse. When you stop making premium payments, the company will do one of two things. Read your contract language carefully to determine which course of action applies to you.

  1. Convert to extended term and tap into the cash value to cover the mortality risk. It lapses when the cash value reaches zero. The length of time before the official lapse date depends on the person’s age and the amount of cash value.
  2. Keep it in force permanently, but limit the death benefit amount to the accumulated cash value.

The policy will also terminate if you surrender it to access the cash value. Many people reach retirement age only to discover that they did not save enough money to fund their lifestyle. Alternatively, they need money to pay for long-term care expenses. Whatever the reason, the coverage ends when you cash out or surrender it.

Do Whole Life Insurance Death Benefits Expire?

Whole life insurance death proceeds do not expire. However, that does not mean that the issuing company automatically pays every single death claim. The reality is surprisingly different. The companies do not track policyholders very well, and beneficiaries lose paperwork. As we read above the coverage often ends long before the covered person eventually passes away.

Claims Paperwork

Whole life insurance death benefits do not expire for the beneficiaries who complete and submit evidence of a valid claim.  A valid claim includes written evidence that the insured died because of a covered reason while the policy was still in force.

Do not worry about death benefits expiration dates. Many times loved ones are unaware the deceased person owned a policy. It may take families years to sort through a person’s belongings. Many people have poor organizing skills and do not keep important paperwork in a single place for others to find. You may not discover the appropriate paperwork and file a claim for years – even decades. If legitimate, the company must honor the claim.

Unpaid claims are one way that companies make money. They bear a legal burden to track down deceased insureds in order to pay the rightful claim to heirs. They do not always do a great job in this area – as you might expect.

Coverage Termination

Whole life insurance death benefit proceeds expire when the coverage terminates. Just because one of your relatives kept a policy in force for decades, does not mean that it remained in force when he or she passed away.

As you read above, many people allow the coverage to lapse, or cash them in to fund retirement expenses. Owners often convert from permanent into temporary by making either of these choices.

You do not have a valid claim if the coverage terminated before the person passed away. He or she may have begun the policy decades ago with the intentions of leaving a legacy. However, you must follow through and continue making payments in order for this to happen.

Further Reading