What happens to the cash value when a whole life insurance policy matures?

When a whole life insurance policy matures, the cash value is paid to the policy owner. This is because a whole life insurance policy is designed to accumulate cash value over time, which the policyholder can access. Upon maturity, typically at a predetermined age or after a certain period, the insurance company recognizes that the policy has fulfilled its purpose in terms of coverage, and any accumulated cash value is disbursed to the policyholder.

This process allows the policyholder to benefit financially from the savings component built into the whole life policy. If the policyholder has maintained the policy in force through regular premium payments, they will receive the cash value, which can provide significant financial support or investment opportunities at the time of maturity. This is a crucial aspect of whole life insurance, distinguishing it from term insurance, which does not build cash value and typically provides a death benefit only.