Purchasing a whole life insurance policy is important to consider when developing a plan to provide for your loved ones financial security in the event of your death. Whole life insurance, unlike term life insurance, is a type of permanent life insurance and is also sometimes referred to as cash value life insurance. Here, we’ll discuss a popular question; does whole life insurance expire?
Whole life insurance policies include an extra savings account feature known as the “cash value” which is funded by a portion of your premiums. Additionally, the life insurance company pays interest on your contributions.
As mentioned in the beginning, whole life insurance is a permanent form of coverage. However, it is the choices of the insured that determine its true permanence. The coverage provided by a whole life insurance policy remains in force as long as the cash value remains. If you as the policyholder stop making payments or decide to surrender the policy, the permanent coverage ceases.
Features of Whole Life Insurance
The death benefit is a tax-free lump sum payment made by the life insurance company once the policyholder 
dies. For example, if you purchase a whole life insurance policy with $250,000 in coverage, then $250,000 is the death benefit as long as there is no outstanding loan balance.
Once an individual purchases a whole life insurance policy they will designate one or more beneficiaries. Spouses, children, a friend, a business partner, a trust, a non-profit organization or other legal organizations can be named as beneficiaries.
Your premium is the cost of the policy, typically paid monthly or annually. Whole life insurance policies generally have fixed premiums, and as long as you are making your payments, you have coverage! In other words, you have lifetime coverage available with whole life insurance policies.
Does Whole Life Insurance Expire or Lapse?
Despite the fact that insurance companies have designed this to be a form of permanent coverage, the policies can still potentially expire. Sometimes it is the case that the insured lived longer than expected. More often, however, individuals’ needs change when growing older causing them to relinquish the policy voluntarily. Here are a few key points to keep in mind.
Maturity
Although extremely rare, a policyholder can live beyond the policy’s maturity date. The maturity date is established upon application and is typically set at age 100 or 121.
The cash value of the whole life insurance policy equals the face amount or death benefit at the maturity date. Once the maturity date is met, the insurance company pays the cash value of the policy to the policyholder in a lump sum.
Lapses and Surrenders
Occasionally, meeting basic and unexpected needs usurp the desire to keep the policy in force. Whole life insurance policies can lapse if the policyholders stop making premium payments or if the policyholder surrenders the policy in order to receive the accumulated cash value.
If the insured stops making premium payments, the insurance company will take one of the following courses of action:
- Convert the policy to a term policy and use the cash value to cover the mortality risk. It lapses once the cash value is drained. The length of time before the official lapse date is dependent on the insured’s age and the cash value amount.
- Keep the policy in force permanently, but cap the death benefit amount to the accumulated cash value amount.
Do Whole Life Policy Benefits Expire?
Whole life insurance death benefits do not expire. However, that does not mean that the insuring company automatically pays every death claim filed. Actually, the reality is quite different. Insurance companies do not track the deaths of their policyholders well and beneficiaries often lose paperwork. As mentioned previously, many times the coverage ended prior to the insured passing away.
Claim of Benefit
Whole life insurance death benefits do not expire for the beneficiaries in possession of an active policy (premiums paid, policy in force) that complete and submit evidence for a valid claim. Appropriate written 
evidence regarding the nature of the policyholder’s death submitted during the time that the policy is in force constitutes a valid claim.
Often loved ones are unaware that a life insurance policy exists. Lack of organization skills may cause years of searching for the appropriate paperwork in order to file the claim, sometimes even decades later. As long as the policy is found to be legitimate, the insurance company must accept the claim.
Unpaid claims are one way that insurance companies make money. However, they often bear the legal burden of tracking down deceased policyholders in order to pay the lawful claim to the beneficiary or beneficiaries. This is certainly no easy task and low on the priority scale. It is essential that life insurance policies and other financial documentation are placed in a secured location accessible to named beneficiary.
Coverage Termination
Whole life insurance death benefits expire once the coverage is terminated. Just because a loved one had a whole life insurance policy in force for decades, does not mean that policy remained in force once that loved one passed away.
As stated previously, many individuals allow their coverage to lapse, or they will surrender them in order to fund their retirement expenses. These actions cause the whole life insurance policy to be more temporary than permanent.
Is Whole Life Insurance Worth the Cost?
This type of permanent policy is the most expensive form of life insurance since the death benefit is guaranteed. However, the younger an individual is when purchasing a whole life policy, the lower the premiums tend to be. In
most situations, the premiums are fixed and span throughout the life of the policy or the insured. There are policies available as well with limited payment plans or a single premium payment.
Even though whole life rates are not as cheap as those for term life, whole life protection offers more benefits to the policyholder. Those weighing the pros and cons of whole life insurance find that the benefits of whole life policies outweigh the high premiums and intransigency of these policies.