What happens if you outlive high cash value life insurance policy?

23 Dec 2025 · 1 min

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1:22

Jayson Lowe explains what happens when you outlive a cash value life insurance policy. In Canada policies mature at 100, in the US at 121. When that happens, the insurer pays out the death benefit to you while alive, creating a taxable gain. Plan to borrow against the policy before then.

Questions this video answers

Age 100.

Age 121.

The insurer pays the policy's death benefit proceeds to the insured, creating a taxable gain.

Chapters

Another common question is what happens if you outlive your high cash value life insurance policy? So in Canada, a policy is fully performed at age 100, and in the United States, it's fully performed at age 121. So if you're celebrating your 101st birthday or your 121st birthday, the insurance company is going to pay to you the death benefit proceeds of the insurance contract. Now, given that you're still alive, those proceeds are taxable. There is a taxable gain as a result. And so would it be important to make sure that as you achieve that age, Kudos to you if you get to that age, that's incredible that you should be and should have been enjoying your life by borrowing against that accumulation and making sure that you've created everlasting wonderful memories with your family, with your seceding generations. But understand that once that contract is fully performed, you're going to get a check and it's going to be in the form of the total death benefit of that insurance contract. And it's going to be a very high multiple of what you ever paid in premium. You can never pay in what the insurance company is going to pay out. It is contractually impossible for you to ever pay in when the insurance company is going to pay out. And so happy birthday.