A policy matures when the insured of a policy passes away.  Calculating the projected Life Expectancy (LE) of the insured is the most important factor that determines the returns to the investor. If the insured lives longer than the calculated LE, the returns will be lower to the investor. If the the insured lives shorter than the projected LE, the higher the returns will be.

 

As demonstrated by the chart below, the Total Average Annual Return for policy 4 maturing at 4.5 years is 14.7%. If the policy matures 2 years after what may be medically expected, the Total Annual Return is still a very competitive 8.6%, while the same investor would realize an extraordinary Total Annual Return of 26.6% if the policy matures 2 years earlier.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Early Maturity Payouts and Premium Calls

 

If Policy 4 in the above example matures beginning of Year 2, all unused premiums will remain held in Escrow. In the above example, policy 4 maturing beginning in year two will yield $33,305. That represents a Total Annualized Return of 66%. In the unlikely event that there may be a Premium Call, it will reduce the Total Annual Return of your investment but is mitigated by the premiums held in reserve from early maturity payouts.