What Does Life Insurance Maturity Mean? 
Life insurance maturity occurs when the policy 's reserve equals its death benefit and the reserve -LRB- also called cash value -RRB- is paid to the policy owner . Level premium life insurance policies have a charge that accounts for an investment portion of the policy to build a reserve that covers a portion of the policy 's death benefit . The purpose is for the cash value to eventually replace all of the death benefit , and this is the point at which the policy matures . When a policy matures the cash value -LRB- which is another and more common term used for the reserve -RRB- equals the death benefit , and the cash value is paid to the policy owner there are taxable consequences to the extent that cash received exceeds the total of premiums paid . Due to this taxable consequence , some more recently designed policies have an indefinite maturity date so as to avoid maturity prior to the insured 's death . 