What Does Maturity Guarantee Mean?
Also called as an ‘annuity benefit’, the term refers to a predefined amount of money a contract secures after a certain period of time has slipped away. Many contract types have such a maturity guarantee, but the most common ones are the life insurance contract and the segregated fund policy.
Maturity Guarantee Explained
The above-mentioned security refers to the fact that after a specific period is over (for instance after ten years) the contract holder of an insurance policy is entitled to get a minimum sum of money from the contract’s value.
One must not confuse the concept of ‘maturity date’, and that of ‘maturity guarantee’. The first refers to the date when the maturity benefit or guarantee becomes available to the beneficiary of the policy. The period after which a contract reaches maturity is usually at least 10 years, but usually more than this minimum.
One should know that a particular percentage of the amount of money invested initially into a contract will be paid out only at death or at the contract maturity.