How Does Paid Up Life Insurance Work?

  1. 12689 POINTS
    Ted Ratliff
    Owner, SFS Associates,
    When a life insurance policy is paid up it simply means that no more premiums are due to maintain the death benefit.  It is like paying off your car.  Mutual companies who pay dividends allow you to take your dividends in the form of paid up insurance.  This allows you to increase your death benefit.  With whole life policies you can also take a reduced paid up policy which allows you to stop making premium payments in exchange for a lesser face amount that would be considered paid up.
    Answered on June 2, 2013
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