Does Universal Life Insurance Expire?

Key Takeaway

To meet the needs of their customers, most insurance companies offer different types of universal life insurance. Some kinds of universal life insurance may expire when the policyholder reaches a certain age, while others don’t. It’s important to make sure you understand all the nuances of the universal life insurance policy you are considering, which you can do by speaking with a trusted financial advisor.

Hourglass almost out of sand

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.

What Is Universal Life Insurance?

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.

Universal Life Insurance Versus Whole Life Insurance

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.

In Closing

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.

ELO1603n (3-24) 

The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company.

Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

Policies are issued by Everly Life Insurance Company (“Everly Life”), Topeka, KS. Everly Life is not licensed in the state of New York and does not solicit or transact business in New York.

A.M. Best's 15 ratings are a measure of claims-paying ability and range from A++ (Superior) to F (in Liquidation). Ratings are current as of January 25, 2024 and subject to change at any time. While ratings can be objective indicators of an insurance company's financial strength and can provide a relative measure to help select among insurance companies, they are not guarantees of the future financial strength and/or claims-paying ability of a company and do not apply to any underlying variable portfolios. The insurance agency from which a policy is purchased, and any affiliates of those entities, make no representations regarding the quality of the analysis conducted by the rating agencies. The rating agencies are not affiliated with the above-mentioned entities, nor are these entities involved in any rating agency's analysis of the insurance companies.

CalendarLive support: Mon–Fri, 8am–5pm CT

© 2023 Everly, LLC