Maturity amount in life insurance is the amount of money that the policyholder of a life insurance policy receives on its maturity date. This amount is determined when the policy is taken out and will remain the same over the entire duration of the policy.
The maturity amount is usually equal to the sum assured (the amount insured) on the policy plus all bonuses which may have been accumulated over the course of the policy. It is also important to note that any surrenders, partial withdrawals or outstanding loans taken against the policy will be deducted from the maturity amount.
The main purpose of maturity amount is to ensure that if a policyholder survives to the maturity date of their life insurance policy, they will receive their full sum assured plus any associated bonuses. It is often used to transfer important wealth to dependants or to cover the costs of a funeral or other planned expenditure.
In short, the maturity amount in life insurance is the amount of money that is paid out to the policyholder when the life insurance policy reaches its full term. The amount is calculated by taking the sum assured and any bonuses accumulated over the course of the policy and subtracting any surrenders, loans or withdrawals made against the policy.
