Today we will introduce an important term related to insurance: "maturity insurance premium". Maybe you are unfamiliar with the terminology of insurance, but don’t worry, we will explain this term to you in a simple and easy-to-understand way to help you better understand its meaning and function.

What is maturity insurance?
Insurance is a tool to protect our future lives. When we buy insurance, the insurance company will promise us to provide compensation under certain circumstances to help us mitigate the losses caused by accidents. "Maturity insurance premium" refers to the amount paid after the insurance contract expires. This amount is calculated based on the content of the insurance contract and the insurance premiums accumulated during the period. Simply put, when the insurance contract reaches the agreed expiration time, the insurance company will pay an amount according to the terms of the contract, which is the maturity insurance premium.

What about the maturity insurance premium?
The terms would read:

Article 10 Payment of maturity insurance premiums

If the insured is still alive on the policy anniversary when this contract is valid and the insurance age reaches eighty-six years old, the company shall base the "insured amount" recorded on the insurance policy of this contract (excluding other addendums) on an annual basis. The payment method is interest-free and calculates the total insurance premium payable from the effective date of the contract to the "expiry date of the original payment period", and pays the maturity insurance premium.

Vernacular: Maturity benefit: When the insured reaches the age of 86, the "total premium paid" is refunded.

The terms would read:

Article 17 Payment of maturity insurance premiums

If the insured survives the expiration of the insurance period of this contract and this contract is still valid, the validity of this contract will terminate after the company pays the "maturity insurance premium" according to the maximum of the following three:
1. The "insured amount" at the time of maturity.
2. The policy value reserve at the time of maturity.
3. "Total accumulated insurance premiums paid" at the time of maturity.

Vernacular: Maturity insurance: If the insured still survives 30 years after the policy is taken out, the larger of the "total premium paid", "insured amount" and "policy value reserve" will be refunded.

What are the conditions for receiving mature insurance benefits and who are the beneficiaries?
To receive maturity insurance benefits, you must first ensure that the insurance contract has reached the agreed expiration time. And when the contract expires, who can receive the maturity insurance money? He is the "beneficiary" of this policy. "Beneficiary" refers to the person designated in the insurance contract to receive the insurance proceeds. Usually, the beneficiary can be the policy holder himself or other designated family members or relatives.

Is the maturity insurance premium taxable?
Who is the "guarantor"? This is an important term related to taxation in insurance!
Before answering this question, we would like to introduce to you another important role in an insurance policy: the "insured". When you decide to buy insurance to protect yourself or your family, you become the insured in this insurance contract. The "insured" is not only the person who purchases the insurance, but also the person responsible for paying the insurance premiums.

The "Insured", "Beneficiary" and the annual amount of mature insurance benefits determine whether tax will be levied!
When we collect the maturity insurance benefits, we may wonder whether we need to pay taxes. The good news here is that generally, there is no need to pay taxes on the maturity insurance premium. This is because the maturity benefit payment is usually regarded as a return amount paid by the insurance company after the contract expires, rather than a lump sum of income. However, this refers to when the applicant and the beneficiary are the same person, that is to say, when you are the applicant who purchases and pays the premium, and is also the beneficiary of the maturity insurance money of this policy, you will receive the full amount of the insurance. No tax is payable on term insurance premiums.

If the policyholder and the beneficiary are different people, the beneficiary may be taxed when receiving the mature insurance benefit! After all, the insured person has to pay the cost, and the insurance benefits should theoretically belong to the insured person, but in the end it is enjoyed by the beneficiary free of charge. According to the relevant introduction to gift tax, this is a gift behavior stipulated by law, so the beneficiary will be subject to gift tax. However, there is one more important point! If the amount donated to the beneficiary is less than 2.44 million a year, the gift tax is exempt!

Therefore, will the maturity insurance benefits be taxed? We can pay attention to these two things:

Are the sponsor and beneficiary the same person? If it is different, gift tax will be payable when receiving the maturity insurance benefit.
If the beneficiary receives less than 2.44 million in mature insurance benefits in a year, he or she can qualify for gift tax exemption!