How to Change the Maturity Date of Life Insurance

Changing the maturity date on your life insurance is surprisingly easy.
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The maturity date of a life insurance policy is the date at which you no longer need to make premium payments, even though the policy will remain in force for the rest of your life. This date is not set in stone. If you want to change the date, you have a variety of options available, depending on your plans and available resources.

Cash Value and Maturity Date

As you pay premiums on the account, the policy accumulates a "cash value" that's similar to the equity on your home loan. In an "endowment" life policy, once the cash value equals the policy's "face value" -- the amount that's paid out upon the death of the insured -- the policy has reached its maturity date. This is similar to paying off the last of the principal on your home loan.

Interest and Maturity Date

"Risk cost" is a number set by insurance actuaries that determine how much money a policy must make to be profitable. If not using an endowment method to determine maturity date, a policy will mature when the interest on the cash value exceeds the "risk cost" assessed for the insurance.

Pushing Back the Maturity Date

Pushing back the maturity date on a policy just requires reducing the cash value. You can do this by taking a loan out against the policy. This is a standard option on all whole life products, and reduces the cash value by the amount of the loan plus some fees. The maturity date then extends as far into the future as it takes to pay off the extra money. You can also just skip some payments. Your insurer will make the payment for you by automatically taking a loan out of the cash value.

Bringing Forward the Maturity Date

Bringing forward the maturity date requires either increasing the current cash value or renegotiating the terms of your policy. Some insurance companies will let you simply add extra money to the account, much like paying extra principal on your mortgage. Renegotiating the policy essentially means cancelling your existing coverage and buying a new policy with an earlier maturity date. Not all companies allow both or either of these options, and those that do allow it sometime charge high fees for the change.

Surrender Value

Every whole life insurance policy has a "surrender value." the amount the policy would be worth if you stopped paying premiums at that time. The surrender value equals the cash value, minus a variety of fees. People typically withdraw the surrender value when they stop paying premiums. However, you can also use the surrender value to purchase a policy with a paid-up death benefit. Since "maturity date" is essentially when a policy is paid up, this process accomplishes the same result but gives it a different name.

Term Life Insurance

Term life insurance policies have no maturity date, cash value or surrender value. Though they are the most common kind of life insurance held by Americans, they're not relevant to this discussion.

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