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What is Maturity?
The term maturity is usually associated with bonds. It represents the time period before the bondholder receives the par value of the bond s/he possesses. Maturity can be equal to several months, or even years. The par value of the bond is received when the bond reaches maturity.
Maturity can also be related to life insurance related products such as endowment policies. Maturity in these insurance policies usually takes place at the end of the contract term of the policy. Example, if a policy says that it has a term life span of 20 years. What it means is that the contract will seize at the end of 20 years and at the end, policyholders will receive their Maturity Value, whatever is at the end of 20 years.
The term maturity is usually associated with bonds. It represents the time period before the bondholder receives the par value of the bond s/he possesses. Maturity can be equal to several months, or even years. The par value of the bond is received when the bond reaches maturity.
Maturity can also be related to life insurance related products such as endowment policies. Maturity in these insurance policies usually takes place at the end of the contract term of the policy. Example, if a policy says that it has a term life span of 20 years. What it means is that the contract will seize at the end of 20 years and at the end, policyholders will receive their Maturity Value, whatever is at the end of 20 years.