Recently I translated a medical insurance contract, and this seems to be how it works.

There is a capital (or principal) cumulative value of the policy that increases each time you make a payment. When you do not have money to pay, the amount is debited from that cumulative value.

I believe that liquidación por vencimiento would mean settlement because the due date has passed and the payment has not been made. And what they say is that the amount to be deducted from the cumulative value of the policy cannot be less than the first policy payment.

I do not have the term in mind, but hope that this helps.

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Note added at 2002-08-02 19:51:21 (GMT)
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Sorry, where I put medical insurance contract, please read life insurance policy.

I think you were right!

+

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Note added at 2002-08-02 20:13:32 (GMT)
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Settlement of maturity claim:

Two months before the maturity date of the policy, the concerned LIC branch from which you have taken a policy will send you intimation as to the amount you are likely to get at the time of claim settlement.
To claim the policy amount, make sure you have the policy document with you (if not in the custody of LIC as security for loan).
Make sure you submit a discharge form number 3825 duly stamped and signed , attested by a witness.
You also need to submit your age proof certificate (if age has not been admitted earlier).
if you have taken a deferred assurance plan or a pure endowment policy, make sure you submit existence certificate.

http://in.insurance.yahoo.com/010713/93/11azz.html

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Note added at 2002-08-02 20:17:42 (GMT)
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Settlement on Maturity Less Than Face Value



Text of section effective June 1, 2003
(a) Except as provided by Subsection (b), a life insurance policy may not contain a provision for a settlement at maturity that is less than the amount insured on the face of the policy plus the amount of any dividend additions to the policy minus the sum of the amount of any debt to the company that issues the policy and the amount of any premium that may be deducted from the settlement under the terms of the policy.
(b) A life insurance policy may provide for a settlement that will be less than the amount required under Subsection (a) if the death of the insured is:
(1) by the insured\'s own hand regardless of whether the insured is sane or insane;
(2) caused by following a hazardous occupation that is stated in the policy; or
(3) the result of aviation activities under conditions specified in the policy and approved by the department under Article 3.42.


http://www.capitol.state.tx.us/statutes/in/in0110100.html#in...

Another idea
Good luck