What Happens When an Endowment Policy Matures?

When the plan reaches the end of the policy term, no matter how many years, the endowment plan is said to mature. If the policyholder survives till the end of the policy term, a maturity benefit is paid out to them. If they die before the maturity of the plan, a death benefit is paid out at the time of death.

Do you have to pay tax when an endowment policy matures?

A You will be pleased to hear that no, you won't face a tax bill on the proceeds when your policy matures. Although the fund that your regular premiums are invested in pays tax, the proceeds are tax-free at maturity, even if you are a higher rate taxpayer. ...

What happens to old endowment policies?

Your original lender should also return the original policy documents to you. ... Once the proceeds of your policies have been paid to you, the life insurer will cancel any direct debit set up to collect the monthly premiums from your bank account.