YOU ASK:

What is the definition of Maturity Date?

WE ANSWER:

The Maturity Date specifies the date when insurance or annuity payments are set to begin, in case the insured person or annuitant is still alive.

There is usually a savings period where the cash value of the policy or the fund is built up. Then, when the set time arrives, the insurance owner or the annuitant will start to receive payments from the fund - either as a lump sum or as monthly income payments. The maturity date is also known as the income date in annuities.

For those who have endowment insurance, the maturity date signals the date when the insurance company will pay the endowment guaranteed in the policy.

For the purposes of investments, maturity dates refer to the time when the issuer of a bond is obligated to pay the bondholder at least an amount equal to what he borrowed.

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