What happens after LIC maturity?

When an LIC policy matures, the policy term ends and Life Insurance Corporation of India pays out the final maturity benefit to the policyholder.

What You Receive

• Basic Sum Assured: The main guaranteed amount.
• Bonuses: Annual simple reversionary bonuses and final additional bonuses (if your plan is a participating policy).
• Guaranteed Additions: Extra fixed amounts added each year, depending on the specific plan.

The Maturity Process

• Intimation: LIC usually sends a maturity claim notice and a discharge form (Form 3825) about 1 to 2 months before the maturity date.
• Submission: You must submit the completed discharge form, your original policy bond, your bank details (NEFT mandate), and KYC documents (ID and address proof) to your servicing branch or online through the LIC Customer Portal.
• Payout: LIC processes the documents and credits the money directly to your registered bank account via NEFT.

Tax Details

• Tax-Free: For most policies, the maturity payout is entirely tax-free under Section 10(10D) of the Income Tax Act, provided the annual premium does not exceed the specified percentage of the sum assured.

You can initiate your claim by logging into the Life Insurance Corporation of India portal, though full final processing typically requires submitting physical or scanned documents to your servicing branch.

Online and Digital Claim Steps

• Log In: Access your account via the LIC Portal or the official mobile application.
• Check Status: Navigate to Policy Status or Policy Summary to confirm your maturity details and sum assured.
• Email Submission: Many branches accept scanned copies of your discharge form, KYC, and policy documents sent directly to claims.bo[branch_code]@licindia.com (replace [branch_code] with your actual branch code).

Required Documents

• Discharge Form: Fill out and sign LIC Form No. 3825.
• Original Policy Bond: Crucial for final settlement verification.
• Bank Details: A cancelled cheque or bank passbook copy for NEFT transfer.
• KYC Proof: Self-attested PAN card, Aadhaar card, or identity proof.

There is no single fixed age to cancel life insurance; instead, you should cancel it when your financial obligations end and your dependents no longer rely on your income, which often happens in your 60s or 70s.

You can review guidance from Fidelity Life to help assess your specific situation.

When You No Longer Need Life Insurance

• Grown children: Your kids are financially independent and finished with school.
• Debt-free: You have paid off your mortgage and other major loans.
• Retirement savings: Your pensions, Social Security, and savings are enough to support your spouse.
• High costs: Renewal rates for term insurance become too expensive.

When to Keep Life Insurance Later in Life

• Remaining debt: You still have an active mortgage or other large debts.
• Income replacement: A spouse depends on your pension if it stops when you die.
• Final expenses: You want to make sure funeral costs are fully covered.
• Estate planning: You have permanent cash-value policies or need to cover estate taxes.

Opinions on the Reddit Retirement Forum are mixed: some users suggest keeping cheap term policies until they expire just in case, while others argue you should drop unneeded coverage immediately to stop wasting money on premiums.

What happens after 10 years of paying life insurance depends entirely on whether you have a 10-year term policy or a 10-pay permanent policy.

10-Year Term Life Insurance

If you bought a 10-year term policy, the contract reaches its end date after 10 years.

• Coverage ends: Your protection stops, and no death benefit is paid out if you outlive the term.
• No money back: Term insurance does not build cash value, so you do not get your paid premiums back (unless you bought a rare return-of-premium rider).
• Your options: You can let the policy expire, apply to renew it at a much higher rate based on your current age, or convert it to permanent coverage if your policy allows.

10-Pay Whole Life Insurance

If you bought a specialized 10-pay whole life policy, you planned to finish all required payments in 10 years. Read more details on how this works via Western & Southern.

• Policy is paid-up: You no longer owe any monthly or annual premium payments.
• Lifelong coverage: Your permanent death benefit stays active for the rest of your life.
• Cash value continues: The accumulated cash value inside the policy keeps growing on a tax-deferred basis, and you can still borrow against it if needed.

Life insurance will not pay out a death benefit if you outlive a term life policy after it expires, or if a permanent policy reaches its maturity age (typically 100 to 121 years old), though permanent policies may pay out their cash value at maturity instead.

When Policies Stop Paying Out

• Term Life Insurance: These policies expire after a set number of years (such as 10, 20, or 30 years) or when you reach a specific maximum age limit outlined in the contract. If you outlive the term and do not renew or convert it, the coverage ends and no death benefit is paid.
• Permanent Life Insurance (Whole or Universal): These policies last your entire life, provided you keep paying the premiums. However, they feature a "maturity date"—traditionally set at age 100, though newer policies extend to 120 or beyond. If you are still alive when the policy reaches this advanced maturity age, the death benefit terminates and the insurer typically pays out the accumulated cash surrender value instead.

Other Reasons a Payout Might Be Denied

• Lapsed Coverage: If premium payments stop and the policy runs out of cash value to sustain itself, the policy terminates at any age.
• Misstatement of Age: If you lied about your age on the application, the insurer may adjust the death benefit payout downward rather than denying it entirely, depending on when it is discovered.