Does Universal Life Insurance Expire?

When searching for solutions for life insurance that might work for you, or for a specific type of permanent life insurance, you want to find a policy that fits your needs. If you want the benefit of having consistent and permanent coverage, you may want to consider a no-lapse universal life insurance plan that keeps you covered, no matter what life throws at you. 

There are two main types of permanent life insurance: whole life and universal life insurance. Both of these policy types are designed to last your entire life and typically don’t expire, so long as you continue to pay the required premiums. However, many insurance policies have maturity dates, which typically range from age 85 to 121. To understand the maturity or expiration dates of your policy, always consult with an insurance agent.

Additionally, each of these plans may accumulate cash value over time (which you could potentially borrow from).

It’s important to know the key differences between universal life and whole life insurance. One plan may benefit your goals and needs better than the other, and it can sometimes be difficult to spot these distinctions. Each policy could have different conditions, provisions, and limitations, so read your policy carefully for complete details.

A universal life insurance policy will generally offer more flexible premiums. This flexibility can allow you to adjust how much you pay each payment period (usually monthly, but it can be quarterly or annually), although you will always be required to pay a minimum amount to prevent your policy from lapsing. 

With a universal life insurance policy, you can achieve these more flexible premium rates in part by accessing the policy’s cash value. Each policy has the potential to build cash value, which can be used for a premium payment or can be left to accumulate over time.

If you are still living when a universal life insurance policy matures, you may be able to receive a lump-sum payment equal to the cash value of your policy. However, this generally only occurs for plans that have maturity dates, and only if the insured person has outlived the maturity date. If the insured person passes away before the maturity date, their beneficiaries will receive the policy’s death benefit.

Whole life insurance, on the other hand, usually has a fixed premium. This means you will always pay the same premium amount to maintain your coverage. Your policy may still be able to accumulate cash value over time, and you may be able to borrow against that amount.

With this in mind, flexibility is the key difference between a whole life insurance policy and a universal life insurance policy. With universal life insurance, you may be able to enjoy more flexible premium payments, whereas with whole life insurance, you can expect to pay a consistent amount.

Any permanent life insurance policy can expire–or lapse–if premiums are not paid. Some universal life insurance policies have an expiration date or maturity date, and if the policy matures during the insured’s lifetime, they will be paid a lump sum roughly equal to the cash value of the plan. If the insured person passes away before the plan matures, the death benefit will be paid to the beneficiaries. 

Universal life insurance is similar to whole life insurance, but offers some unique benefits and also some disadvantages. To determine which plan is best for your needs, you should speak to a trusted financial advisor or a licensed insurance agent.