Final answer:
A policy that matures and pays the face amount if the insured lives to a specified date is known as term life insurance.
Step-by-step explanation:
A policy that matures and pays the face amount if the insured lives to a specified date is known as a term life insurance policy.
In a term life insurance policy, the insured makes regular premium payments for a specified term, typically ranging from 10 to 30 years. If the insured person dies within the specified term, the policy pays out the face amount, which is the agreed-upon coverage amount.
However, if the insured lives to the specified date, the policy matures and the face amount is paid to the policyholder.
For example, let's say John has a 20-year term life insurance policy with a face amount of $500,000. If John dies within the 20-year term, his beneficiaries will receive the $500,000 payout.
However, if John lives to the end of the 20-year term, the policy will mature and John will receive the $500,000 as the policyholder.